With the rise of e-commerce and the need for speed and efficiency, real-time payments have become an essential part of the modern financial landscape. Let's take a look at what is Real-Time Payment and the benefits it brings:
What is Real-Time Payment?
Real-Time Payments (RTP) is an inter-bank electronic transfer of funds from one bank account to another bank account instantaneously (i.e., usually within 15 minutes) 24/7, 365 days a year.
Benefits of Real-Time Payments
Fast: The obvious benefit of RTP is its speed. With near real-time crediting into the bank account, it reduces uncertainties and delayed settlements, unlike traditional rails like SWIFT and Cheque.
Cash Flow Efficiency:
The rapid payment and settlement also benefit SMEs as they can receive funds from customers instantly. The 24/7, 365-day availability of funds reduces the cost of working capital as businesses can now use the funds to pay off their payables. This generates cash flow efficiency and optimizes the budgeting/forecasting processes whilst reducing the need for unnecessary external financing.
Other than the exchange of physical funds, the payments system exchanges transaction messages that typically include details of the transfer, such as sender, recipient, currency, amount, the value date, the transfer unique references, etc. By addressing interoperability between payment systems, it creates standardized and synchronous messaging thus resulting in simplified reconciliation and transparency to both senders and recipients.
Examples of Real-Time Payment Rails
Some common examples of RTP payment systems include Singapore’s Fast and Secure Transfer (FAST), Thailand’s PromptPay, Malaysia’s DuitNow, India’s Unified Payments Interface (UPI), Europe’s SEPA Instant Credit Transfer & United Kingdom’s Faster Payments.
Integrating RTP into CYS Payment Network
With increased expectations for a faster and more seamless payment experience, CYS Global Remit Fintech Development Team understands the needs for RTP and is working on incorporating RTP into its cross-border payment capabilities to add greater value to all its customers. Stay tuned for more updates.