Treasury Teams Demand Proof Before Going Real Time

Consumers are embracing instant payments, which offer them speed, security and peace of mind that their money is exactly where it needs to be, when it needs to be.

Corporates, however, are slower to make the jump.

PYMNTS Intelligence found that just 5% of larger small- to medium-sized businesses (SMBs), for example, have digitized their payments processes.

Although many businesses and financial institutions have been eager to embrace new payments technologies, the hesitation around real-time payments adoption is less about technological know-how and more about a perceived lack of additional value, challenges of integration into existing banking systems, and security concerns.

Many large enterprises struggle to see the value of fully integrating real-time payments. Corporate clients still see real-time payments as a helpful bonus for customers but are unsure whether they can fully replace ACH and wire transfers, which already handle most critical flows reliably and at scale, payments platform Finzly said in a blog post.

That perception makes it difficult for treasury teams to justify the cost of a new payments infrastructure, new controls, and staff training for what often looks like an incremental benefit rather than a large efficiency boost. The PYMNTS Intelligence report “Immediate Impact: How SMBs Can Benefit From Instant Payments” found that 32% of SMBs reported high fees as the main reason for avoiding instant payments options.

Banks also worry that these real-time payments could cannibalize revenue from their legacy payments streams, enticing existing customers to switch over rather than attract new business, the Finzly blog post said. As a result, real-time payments compete with other priorities, such as liquidity optimization, working capital projects, or regulatory change programs that have clearer, near-term returns.

Integration with back-office platforms is another obstacle. Instant rails include new message formats, richer data fields, and different posting behaviors that don’t always map neatly to legacy systems built for batch files and end-of-day reconciliation, according to a Juniper Research blog post. Banks and technology vendors can support ISO 20022 and real-time message flows, but each corporate faces its own integration path through a patchwork of ERP instances, custom middleware and local systems.

In many firms, IT roadmaps are locked for years, and real-time payments must queue behind core upgrades, cloud migrations and cybersecurity projects. Furthermore, the infrastructure upgrades necessary to support real-time payments can be prohibitively expensive, and even firms that can afford them worry they may not recoup their investment for years, Bold Integrated Payments reported.

Fraud and security concerns loom large as well. Unlike card payments or some ACH flows, real-time payments are typically irrevocable. Once money leaves, it’s gone. That changes the risk calculus for corporates that have spent decades tuning their fraud detection algorithms for slower, recallable rails. Enterprises, especially in sectors repeatedly hit by business email compromise and vendor fraud, are wary of introducing a channel that could make payments redirection scams harder to unwind.

The PYMNTS Intelligence report “Fighting Fraud in Real-Time Payments” revealed that many banks and corporate customers have reservations about their ability to detect anomalous behavior at real-time speed, especially in authorized push payments fraud and other social engineering schemes that trick customers into voluntarily sending payments to scammers.

Banks and payments providers are working to improve awareness of the benefits of real-time payments to increase their adoption and close the use gap between corporates and consumers. Bank of America, for example, emphasized education on use cases where real-time payments are the best transaction solution, such as emergency supplier payments, just-in-time payroll and instant insurance payouts, to make the business case more concrete for finance leaders.

The Clearing House highlighted how some corporates now view instant payments as a “growth tool,” enabling new revenue models and better customer experiences, not just as a cheaper or faster version of existing rails. As these success stories accumulate, they may help treasury departments reframe real-time adoption as an offensive move rather than a defensive cost.

These initiatives have an uphill battle against the nature of consumer-versus-corporate adoption of new technologies. Consumers tend to experiment quickly, while businesses move in deliberate, risk-managed steps. While this has resulted, for now, in a multiyear lag in real-time payments acceptance, there may be some acceleration in the adoption rate as more firms see their competitors using these rails.