How Are the Real-Time Payment Trends Expected to Make it Big in 2019
As the real-time payments (RTPs) are favored, there’s an underlying structure that enables the payment procedure to be carried out anywhere at any time. The movement of money, which was initially the preserve of banks, is now open to more lightly regulated companies in the market. Below mentioned are a few players that have been impacted by these payment processes:
1. Retail Banks: As the payment procedure is becoming more and more convenient, the ability for consumers to switch banks has become seamless. The only thing that retail banks now need is to make their customer requirements met and at a competitive price. International payments were once complicated and expensive as they charged 10 to 20 times the cost of a domestic payment and were expensive to maintain. Banks themselves can make use of the newly consolidated payment rails to provide a cheaper, transparent and easy-to-use service for its clients. Nonbank competitions (Fintechs) are entering the market space and are using the new payment rail infrastructure.
2. Commercial Banks: It’s the commercial banks wherein maximum changes are witnessed. The corporate banks can use rails to improve their services to the corporate consumers while removing the in-house costs. In this manner, the global payments are becoming more transparent, fast and trackable.
3. Merchants: Debit and credit cards entirely make e-commerce payments convenient. This process involves many players it goes from a merchant to its payment gateway, to the merchant acquirer via the card, to the issuing (purchaser’s) bank. All parties in the cycle take fees, and it’s the merchant who pays for them, though they dislike it. However, the growing availability of account-to-account, real-time interbank payment services means the amalgamation of inventive Fintechs and merchants pressure which will lead to an alternative payment method that will circumvent the intermediary players in the process.
This is clear that with the fewer intermediaries in the process, there will be significant cost savings for merchants. The potential for real-time settlement of transactions will improve the cash flow and help with the working capital.