Business Use Cases: The Promise of Real-Time Payments

One group of stakeholders that have embraced real-time payments above all others is businesses. The most important benefits of instant payments to businesses—especially small to mid-sized ones—include the elimination of crucial cash flow concerns, enhanced reconciliation, and the elimination of chargebacks, as well as enhanced security. In a recent survey of 1,000 business leaders in multiple verticals, 56% said they were planning to adopt real-time payments in 2024. 

Businesses are the segment currently driving the most demand for real-time payments and many are lightyears ahead of other users. Sixty-one percent of businesses believe that real-time payments provide a competitive advantage.

But, in order to leverage real-time payments, businesses need access to real-time payment networks. Financial institutions looking for supporting fodder for business cases related to the implementation of products built on a foundation of real-time payments could easily start with business banking clients.

Benefits for businesses; opportunities for banks and credit unions

Speed

As mentioned earlier, the most obvious advantage for businesses is to get paid faster—but in addition to receiving the funds themselves instantly, real-time payments are being integrated into business workflows to reduce friction and improve efficiency. For example, the network enables businesses to send Requests for Payments (RfPs) electronically, instantly, and securely. It also allows for real-time dialogue between the business and vendors or customers in which corrections can be made real-time—all while making payment capabilities seamless with the flexibility to pay now or later according to the terms set forth.

For COD deliveries, much coordination between the delivery driver and receiver can be simplified by sending an immediate RfP which the recipient can take care of right away, eliminating any potential delivery delays resulting from payments held up “in the ether.”

Efficiency

In addition to speed, enhanced reconciliation capabilities afforded through real-time payments provide the ability to automatically reconcile payments, improving back-office efficiency, reducing processing delays, and making it easier to identify and fix errors.

Also, the simple ability to send an immediate request-for-payment (RfP), can be the catalyst for significant time and cost-savings related to printing and mailing statements at scale, as well as reconciling delayed or analog forms of payment.

Security

The ability for a business’s clients to pay on the spot—or at least receive a RfP—on the spot, reduces the chance that a bad actor can redirect and intercept a payment. In one type of scam, fraudsters targeting property buyers during the closing process will intercept large escrow deposits by sending fraudulent communications directing buyers to deposit funds in a scam account. When the buyers, out of tens of thousands of dollars, show up to closing, they realize only then their funds never made it to the actual escrow account. Now imagine if closing companies were given the ability to send a Request for Payment (RfP) instantaneously while on the phone with a buyer, eliminating any doubt about who’s requesting payment and preventing any time delays that give fraudsters an opportunity to try to intercept funds.

Competitive Advantage

Businesses can also leverage real-time payments to create new streams of revenue. Any time there is an opportunity to meet consumer demand to be paid faster, there is an opportunity for businesses to productize it—and banks and credit unions have an opportunity to monetize the access to real-time payment rails that makes it possible. For example, some insurance companies are using real-time payments to disburse funds to claimants immediately upon approval.

Orbipay Instant Payments Brings the Future to Financial Institutions

The future is now. Alacriti’s Orbipay Instant Payments brings a modern payments infrastructure to financial institutions. The platform provides access to TCH’s RTP® network, FedNowSM Service, and Visa Direct payment rails empowering you to deliver modern money movement experiences to your accountholders.

The real-time payments gateway is cloud-native and built for scale. Its open APIs and microservices-based architecture mean the sky is the limit for building innovative solutions that can be integrated with your existing systems (Alacriti has pre-built integrations with many core banking solutions and digital banking systems). The platform also offers a host of built-in features for safety, security, speed, convenience, and ease of use to ensure seamless integration of real-time payments into your existing infrastructure and workflows.

The exponential growth of real-time payments is at its tipping point. The market is expected to grow at a rate of 33% annually over the next 10 years, with volumes forecast to reach $300 billion by 2032. It’s essential that financial institutions place their stake in the ground now to position themselves as innovators and market leaders.

Essentially, anytime there is a need, or desire, to pay or be paid faster, real-time payments help businesses with speed, convenience, and security—and help create a competitive advantage for attracting and retaining clients.

Read more about use cases in the article: The Sky’s the Limit: How Financial Institutions, Businesses, and Consumers Can Leverage Real-time Payments to Add Value, Convenience, and New Streams of Revenue.

Alacriti’s centralized payment platform, Orbipay Payments Hub, provides innovation opportunities and the ability to make smart routing decisions at the financial institution to meet their individual needs. Financial institutions can take full ownership of their payments and control their evolution with ACH, Wire, TCH’s RTP® network, Visa Direct, and the FedNow^SM Service, all on one cloud-based platform. To speak with an Alacriti payments expert, please contact us at (908) 791-2916 or info@alacriti.com.