Real-time payments: where they're headed next

Real-time payments (RTP) are moving beyond simple person-to-person transfers and becoming a vital tool for retail operations. For merchants and operators, this shift means the gap between a customer making a purchase and the funds hitting your business bank account is shrinking toward zero. The industry is currently focused on expanding the use cases for these instant rails, specifically targeting the checkout experience to offer a viable alternative to traditional credit card processing. For your business, the immediate benefit of RTP is improved cash flow management. You no longer have to wait days for settlement or deal with the 'pending' status of funds. However, the next phase of development involves integrating these payments with value-added services like loyalty programs and instant refunds. Imagine being able to issue an instant refund to a customer’s bank account to save a sale or resolve a dispute on the spot. While credit cards still dominate for the rewards they offer consumers, the push for real-time rails is designed to lower merchant fees and reduce the risk of chargebacks. As these systems become more global and interconnected, retailers should prepare for a landscape where 'pay by bank' is as seamless as a card swipe, providing a cheaper and faster way to get paid.

Source: American Banker — Top News

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