If Real-Time Payments Is All About Now, What’s Holding It Back?

Now, now, now — that’s the chorus coming from consumers, merchants and other companies when it comes payments, and that demand is fueling progress in real-time payments. It is not only one of the major trends for 2019 but promises to take on increased importance in 2020 and beyond.

Significant challenges remain before the benefits of real-time payments (RTP) really start to show themselves. That was part of the story told in a new PYMNTS interview with Jon Zimmermann, senior product manager, electronic products at Fiserv.

“Customers are always looking for their money now,” he said, and those customers include merchants as well as consumers eager to get their funds right away.

Indeed, everyone seems to want faster payments — from gig workers to B2B suppliers to parents splitting expenses — but with not all major financial institutions on board, real-time payments stand a lower chance for mass adoption.

New RTP Rails

According to an earlier Faster Payments Tracker from PYMNTS, it was projected that more than 56 real-time payment rails will be live by 2020. The demand for faster payments is strong in the U.S., but not all financial players agree on how to achieve it, especially within that timeframe.

Other numbers back up that progress, as noted by Zimmermann in his interview with PYMNTS. For instance, most — 82 percent — of businesses say real-time payments resolve current payment challenges.

A “confluence of trends” helps explain why faster payments are proliferating, Zimmermann said. They include the rush by “a lot of industry segments” to enable customers and individual consumers to make real-time payments and the ongoing rise of real-time peer-to-peer (P2P) payments.

“Those things are creating a storm of interest and demand” around real-time payments, he said. As well, the increasing popularity of P2P payments is building “expectations” for real-time payment experiences among various consumer groups.

Positive working relationships are vital for the further progress of real-time payments in 2019 and beyond. In fact, adoption depends greatly on partnerships to make RTP more accessible. Earlier in June, for instance, payment company PayFi and The Clearing House (TCH) partnered to bring real-time payment technologies to community banks. And payment system testing solutions provider Iliad is trying to encourage uptake with its new virtual testing platform to help FIs and gateway service providers design for RTP.

RTP Security

Security, too, has to take a more prominent role to keep real-time payments progress on the right track, lest users lose confidence in the process. “We still have work to do on the security side,” Zimmermann told PYMNTS. The stakes are pretty significant, given the “compression” of the real-time payments process, and the chance for criminals to exploit any misstep along the way.

For instance, in the real-time payment process, “The ability to react is becoming zero,” given the speed of these payments. Real-time payments require new or revised fraud detection and prevention capabilities, dispute resolution processes and more education of law enforcement and other authorities.

Of course, progress on real-time payments continues — it seems almost certain that the trend will keep gaining steam.

Globally, the projected compound annual growth rate (CAGR) of the real-time payments markets will reach 30.6 percent between 2018 and 2015 — a figure that not only underscores the appeal of this technology and process, but the need for payments providers to be prepared for a new way of operating.