The next challenges behind real-time payments adoption

Real-time payments (RTP) are moving closer to becoming a standard in retail, but banks are currently grappling with significant back-end hurdles. For retailers and service providers, this means the dream of instant settlement—getting paid the second a customer swipes—is still facing some growing pains. Most financial institutions are struggling with 24/7/365 operations, as their legacy systems weren't built to move money on weekends or holidays. Banks also face a 'liquidity' challenge, needing to keep more cash on hand at all times to cover instant transfers. Despite these technical delays, the shift toward RTP is inevitable. Lenders and fintechs are increasingly using these rails to fund consumer loans instantly. This matters for your business because it shortens the gap between a customer being approved for financing and you receiving the funds. However, the industry is currently stuck in a 'chicken or egg' phase: banks are hesitant to invest in the tech until more merchants demand it, while merchants are waiting for better bank support. As these operational hurdles clear, expect to see lower transaction costs compared to traditional credit cards and a significant reduction in the 'pending' status of your daily deposits.

Source: American Banker — Top News

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