The Rise of Real-Time Payments: The Three I’s for a Seamless Experience

Introduction

Real-time payments (RTP) are revolutionizing the way we transact. From UPI in India to PIX in Brazil, these innovative payment methods are disrupting traditional systems by offering:

These transactions are facilitated through web and mobile interfaces, seamlessly integrated with various banks and wallets. They offer speed, ease of use, and instant acknowledgments, enhancing the overall payment experience for both payers and payees. Real-time processing reduces merchant efforts, ensuring they receive payments instantly.

A PYMNTS report highlights the skyrocketing adoption of real-time payments globally, with transaction volumes expected to surge by 100% to 400% in various countries. Similarly, Statista predicts a 400% growth in the value of real-time payment transactions within the North American region by 2027.

Also Read: Navigating the Future: How GenAI is Redefining Financial Services

The Three I’s of Real-Time Payments

Recognizing the immense benefits of RTP, central banks worldwide are actively defining standards and infrastructure to facilitate these transactions. Here are three key characteristics that define real-time payments:

Instant

Ease of payments is exemplified and often met with an awe in the geographies that have accelerated adoption of digital payment methods and especially RTP. Depending on the type of transfer the cost of an RTP could range from a few cents to a few dollars.

Technology is enabling solutions to make the RTP more secure, cheaper, and more transparent. The customers, both payer and payee, demand an exemplified experience at every point of the transaction.

Also Read: From Traditional to Digital: Enhancing Payment Systems

Irreversible

The RTP transactions are irreversible. The Payee and the Payer must be transparent with the transaction /payment details before they hit the “Pay Now”. The RTP transactions are irreversible. Dispute arbitration on an RTP transaction is nearly impossible.

The merchants and payment providers are emphasizing a simplified transaction interface with every possible relevant information to make sure that the Payee understands the transaction before they hit “Pay now”.

Inspect

With an unprecedented growth in RTP, the incentive and the opportunities are higher for fraudsters to manipulate the actors in the system for their benefits. The FraudClassifierTMmodel explains the possible scenarios. The Payee and Payer should Inspect every detail before initiating the payment.

Also Read: Benefits of Digital Wallets in Financial Management for Businesses

Since the real time payments are instant and irreversible, it is very important for the actors (such as the banks, financial institutions, merchants) to implement security controls, account validation, multi-factor authentication, and continuous monitoring mechanisms. On the other hand, customers initiating push payments should verify details before they hit “Pay now”. 

The recent settlement news on Visa and Mastercard, still pending court approval, is seen by merchants as a way to reduce transaction fees and improve margins, however the real win-win could be investments in making transactions more secure to retain business.

The Future of Cross-Border Payments

With cross-border remittances exceeding $150 trillion (projected to reach $200 trillion by 2027), real-time payments hold immense potential. However, cross-border RTP solutions require robust security measures, enhanced compliance processes (KYC, AML), and streamlined regulations.

Also Read: 5 Use Cases of Predictive Analytics in BFSI

Apexon: Your Real-Time Payments Partner

Apexon empowers financial institutions to develop innovative payment solutions through our engineering and experience capabilities. We offer expertise in:

• Digital wallets: Integration with popular wallets like Wirecard and DailyUse.
• Seamless payments: Streamlined payment processing for a superior user experience.
• Open banking: Leverage open banking APIs for greater functionality.
• Third-party integrations: Connect seamlessly with various third-party services.

By enabling a comprehensive ecosystem of services, Apexon helps you capitalize on the power of real-time payments.

Join us to leverage the full potential of real-time payments and transform your financial services landscape.

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Also read: Elevating Payment Experience – Interoperability