1. Provide customers immediate access to funds
Example: Emergency disbursements
Someone experiencing a car accident or home fire may need an urgent car rental or a hotel to stay in for the night. When the insurance agent says they're issuing an advance to cover the initial expenses, no one wants to wait for a check to arrive in the mail or even an ACH to clear in their checking account. The agent can disburse those funds in seconds with RTP, giving immediate availability to the payee in their personal banking account, even on nights, weekends and holidays.
This faster access and 24/7/365 availability can become a differentiator for a business. Or in the future, at the very least, customers will begin to notice when their money is delayed, especially when they’re experiencing a crisis that requires an immediate response or they’re expecting life-changing amounts.
Similar scenarios: cash advances, loan proceeds, large dollar payouts
2. Move money efficiently
Example: Transactions with suppliers and trading partners
In today’s world of supply chain challenges, using RTP to pay suppliers can give businesses an advantage in terms of shipment and delivery. The 24/7/365 access and real-time settlement mean funds are available immediately, even on nights, weekends and holidays. This can improve overall business relationships, especially with trading partners
RTP allows the ability to manage cash flow, while taking advantage of supplier discounts. Transmitting the ISO20022 standard data also allows for better integration with accounting systems and easier reconciliation. Although the speed, efficiency and availability of RTP improve many payments, the benefits are magnified when applied to a higher number of transactions.
Similar scenarios: move funds to other businesses or your employees like payroll and bonus payments
3. Support time-sensitive transactions
Example: Paying bills on the day they’re due
Some payments are time-sensitive and can’t wait hours or days with delays in posting. Whether it’s a consumer trying to avoid late fees or a treasurer trying to manage cash flow, time really can mean money for some people. RTP is available for immediate payment and confirmation at any time of day or night, which gives payers the ability to wait until the last second to pay a bill or invoice.
This added certainty allows more people and businesses to confidently pay bills at the last second, and even gives businesses the ability to make payments to their payees that are available in their bank accounts immediately, 24/7/365.
RTP isn’t restricted by deadlines or normal business hours, ensuring money delivery as soon as the transaction is made with immediate receipt confirmation and no guesswork.
Similar scenarios: medical bills, consumer payments to businesses
RTP is one piece of the payments puzzle
With technology changing so quickly and so many faster payment options jumping to the forefront, it’s important to match the right payment to the right situation. There is a time for fast and a time for more traditional payment methods.
RTP helps businesses the most when paying in real-time matters, any day, any time of the year with immediate settlement, data-rich messaging and 24/7/365 access. RTP is just one piece of the payment ecosystem businesses need to maintain pace with the rapidly changing landscape.
According to Adam Carter, vice president in the Faster Payments Group at U.S. Bank, “digital-based payments options are all going to look pretty fast when compared with, say, processing checks or paper-based invoicing, but there are so many opportunities for businesses to operate better – truly transform – when they’re leveraging RTP to its maximum potential,” he says, “and there’s a lot more at stake now.”
“Treasury and finance professionals who understand the prospective benefits to their organization of faster payments are better prepared to stay a step ahead as digital payments evolve,” he says. “We expect RTP to become increasingly embedded in the software that treasury and finance functions use every day, which will allow us all to reimagine and transform the movement of money.”
To learn how real-time payments are changing the way companies do business, visit our RTP® resource page, explore our survey of 1,000 American businesses, or schedule a call with a treasury management expert.