Money is getting faster, because it must. Many millions are sweating out the COVID-19 summer jobless and facing uncertainties about maintaining their way of life much longer.
Instant payments are one solution that financial institutions (FIs) must offer customers to counter this, but “instant” doesn’t necessarily mean the same thing everywhere.
PYMNTS’ August 2020 Disbursements Tracker® done in collaboration with Ingo Money, unravels mysteries of faster funds in the COVID-19 era with an insightful tour of the space.
“Many U.S. FIs are aiming to enable faster payments as clients continue to demand such services. Virginia-based community bank Chesapeake Bank, for one, recently stated that it would streamline its services by joining the Real-Time Payments (RTP) network developed by The Clearing House (TCH),” according to the latest Disbursements Tracker®.
“Fifty-three percent of U.S. deposit accounts are connected to the RTP network, which grants those account holders access to the platform’s instant settlement capabilities. This means government disbursements, such as stimulus funding and tax return money, can quickly reach these consumers and provide added financial security,” per the Tracker.
It’s one example among many of banks and FIs embracing RTP when people need it most.
No Longer A Choice
Adopting real-time payments is no longer a choice for banks and FIs. It’s come down to when, how and with what partner(s) will they make the move to instant. Choice of system, flexibility to personalize for example, will decide the type of experience that consumers get.
“What is important for the FIs to grasp in creating such an experience is that … point solutions do not equal a flexible customer experience that offers instant, 24/7, on-demand options. Instead it requires a modern payments platform designed for this fuller integration,” Drew Edwards, CEO of Ingo Money, told PYMNTS.
“There is no doubt that FIs will have to figure this out if they want to keep their businesses and customers in the future. Otherwise their payors will begin to look elsewhere to the FinTechs that are ready to take it on and [are] steadily making traction,” Edwards said.
Platforms Automate For RTP
Just as Edwards is a critic of the paper check, he’s also an advocate for automating accounts payable (AP) functions in efficient platform environments that enable speed and security.
Automated AP, rather than point solutions, helps make domestic RTP streamlined and simple.
“Automated technologies can also add speed to disbursements, and the COVID-19 pandemic could be accelerating companies’ use of such tools. One study found that 38 percent of firms have begun using automated solutions in their accounts payable (AP) processes, compared to 24 percent that said the same in 2019,” PYMNTS’ August 2020 Disbursements Tracker® states.
“More companies are also using electronic methods to boost the speeds at which they receive invoices and payment details, reducing the time it takes to finalize disbursements. The study found that 56 percent of businesses are now paying their invoices electronically, for example.”
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