This FinTech believes real-time payments are here to stay 

By Puja Sharma

Real-time Payment (RtP) models are here to stay for the foreseeable future alongside traditional payment schemes. But as businesses increasingly recognize their potential, further cases for real-time payments are coming to the fore. That’s according to Buckzy Payments Inc., the Toronto-based FinTech offering payment solutions.

Payment confirmation pays are notified by the RTP system when funds reach the payee’s bank account. Payees awaiting funds may benefit from this as it closes the information gap for them and may help reduce the number of call center inquiries regarding payment status. The RTP system will allow vendors to securely send Requests for Payment. Payers can choose immediate payment through a Pay It Now response.

Utilizing essential information to simplify the business process by connecting buyers and suppliers in real-time Payers can communicate with their banks, and their banks can communicate with their payees. The ability to communicate bidirectionally within a secure environment is one of the distinguishing characteristics of RTP.

Umesh Maini, Chief Product Officer at Buckzy, said, “Customer-oriented businesses such as retailers and hospitality providers value the increased speed with which they receive funds through real-time payments. In addition, during the Covid-19 pandemic, cross-border online purchasing increased, which put more pressure on liquidity for merchants due to the settlement times involved. But with the pandemic far from over, businesses from a wide variety of industries are also now looking at RtP with increased interest as a remedy to this issue, since with RtP it is the payer that is responsible for and controls the flow of funds rather than the payee and their bank or payment provider.

According to the JP Morgan insight, In Real-Time Payments (RTP), funds are instantly available, settlements are finalized, instant confirmations are made, and integrated information flows are consolidated into a quick transaction. Bringing together speed, data, and communication solves longstanding challenges. In the banking system, payments are executed very efficiently, but the same can’t be said for the end-to-end processes that surround them. Complete and integrated information has always been a challenge.

There is only one direction of communication between the payer and the payee. The information must be passed back and forth between counterparties outside the payment system. Communication problems are exacerbated by lags in payments and settlements. When funds are not transparent, the flow of business can be hindered, especially in times of crisis.

“RtP not only speeds up client payments – it can also improve cash flows, budgeting, financial projections, and cash management,” Maini added.“And if that’s not enough to get every Chief Financial Officer sitting up and paying attention, RtP also offers an opportunity to support and accelerate other digital innovations and trends, such as expedited bill payments, faster payroll disbursements to workers, and the ability for current account holders to manage their cash better. In other words, it acts as a major catalyst for businesses to digitally transform their business models by being able to accept payments that are settled in real-time.”

“Across the world, tech-savvy consumers and companies alike now want their bill payments, online shopping and cross-border transactions completed instantly, cheaply, and at scale. That’s the power of RtP,” added Maini.

Benefits of Real-Time Payment:

• RtP helps with customer acquisition a real-time payment provides an additional set of services that will help to attract new customers
• It removes the need to use costly, outdated fund transfer methods like SWIFT
• Real Time Payment provides extra clarity for users to manage cash through up-to-the-minute transaction histories and real-time account balances
• Increased revenue through improved economies of scale and customer retention
• Manual processes can be reduced, which in turn saves costs
• RtP enables better customer insights compared with cash, which can then be used by the payment provider to improve their other financial services
• Its data can also improve anti-money laundering (AML) and fraud monitoring