SMEs will rely heavily on real-time payments in the next five years, research reveals

By Puja Sharma

The 2023 AFP Real-time Payments Survey, conducted by the Association for Financial Professionals (AFP) and sponsored by The Clearing House, found that corporates plan to drastically increase their use of real-time payments in the next five years to benefit from lower transaction costs, improved transparency into the payment process, increased efficiency, and better cash flow.

The Research Department of AFP surveyed corporate treasury practitioners about their current and planned use of real time payments.

The Clearing House, the sponsor of the survey, operates the RTP network, which immediately clears and settles payments 24×7 and provides the ability to exchange related payment information through the network and across secure bank channels. Currently, more than 150,000 businesses each month are sending real-time payments over the RTP network, which has over 390 bank and credit union participants and reaches 65% of demand deposit accounts in the United States.

“Payment volume from corporates on the RTP network continues to increase month over month,” says Jim Colassano, Senior Vice President of Product Development, The Clearing House. “Corporates are leveraging the RTP network to improve cash flow, reduce costs, and have better control of payment timing.” Colassano also runs the RTP Corporate Advisory Group, which is comprised of corporate treasury and payments professionals.

TCH has taken feedback from the RTP Corporate Advisory Group and incorporated it into the RTP network, such as the need for a higher transaction limit. “We increased the transaction limit to $1 million, as corporates needed a higher threshold for many payments,” Colassano adds. “It is exciting to see businesses find innovative ways to take advantage real-time payment capabilities to better serve their customers.”

Meanwhile, SMEs in MENA have identified accepting omnichannel digital payments (92%), digitizing business operations (91%), and training and upskilling staff (90%) as the main drivers of growth.

Easy access to funding remains a key factor for growth across MENA – 92% of SMEs in Egypt find access to capital and resources crucial to sustaining the upward trajectory in 2023. The International Finance Corporation (IFC) estimates the value of the total financing gap for SMEs in MENA at $210 to $240 billion.

Key highlights:

• Around 99% of corporates with annual revenues of $1 billion to $9.9 billion expect to send real-time payments in the next five years;
• Over 77% of corporates expect they will receive B2B real-time payments in the next five years; 76% expect to send real-time payments within the same time frame;
• About 80% cite payment transparency as a very important feature of real-time payments;
• Approx 50% of respondents indicate that the lower cost of transactions is a benefit of using real-time payments.