Top 5 reasons to explore Real-time Payment partnerships

Imagine rush hour traffic: crawling along local roads versus zipping down an empty express lane. That's the difference between traditional payment methods and real-time payments. In the race for efficiency, which lane will your business choose?

Let's explore the top five reasons why your business should consider RTP partnerships:

1. Rising consumer and business demand

Consumer spending habits have drastically changed throughout the years. Advancements in payment options, including RTPs, allow consumers to pay how they want when they want. 

However, traditional payment networks, like the Automated Clearing House (ACH) and credit cards, generally take 1-3 business days to process funds. This doesn’t favor the desire for speed, which is why real-time payments are increasing in popularity and the numbers speak for themselves: 86% of businesses and 74% of consumers in America are already using instant payments.

In 2016, Nacha (which governs the ACH network) launched same-day ACH. Almost immediately, they saw that this became the preferred payment method. They also reported in 2023 that same-day ACH volumes grew 22.3% (853.4 million payments). 

2. Critical cash flow management and instant settlement

An estimated 82% of businesses fail because of cash flow problems. Therefore it’s beneficial for businesses to incorporate real-time payments so they have immediate access to funds–helping them maintain a healthy cash flow and avoid becoming part of the statistics.

In addition to instant payouts, real-time payments use a "good funds model" that verifies sufficient funds before initiating transactions. This eliminates bounced checks and delayed payments, while offering 24/7 availability–even on holidays.

Real-time payment rails also enable features like Request for Payment (RfP), which enables businesses to send e-invoices directly to customers' banking apps for instant, one-click approval. This streamlines billing and reduces the risk of late payments.

3. Accelerating Market Growth

There are two instant payment rails used in the U.S.: The Clearing House's RTP Network and the Federal Reserve's FedNow. These networks are rapidly growing. The Clearing House reported a record 76 million transactions in the first quarter of 2024. Even FedNow, launched in 2023, already has 800 banks and credit unions on board.

This traction validates the fact that instant payments are on the rise, including in e-commerce. A Federal Reserve survey discovered that 61% of consumers plan to use instant payments more in the future, and 74% of those under 54 expect faster payment options.

This trend isn't limited to customer payments either. Experts predict that 30% to 50% of all business-to-business (B2B) payments will be instant by 2025.

4. Cost-effective implementation through partnership

Building an API can be expensive and complex, especially for smaller businesses. It's also important to know that offering embedded finance solutions like real-time payments requires specialized licenses that can take years to obtain.

Real-time payment providers already have the necessary APIs and licenses required to operate. Also, they understand the technology behind these systems and know how to customize them to meet specific needs. This expertise allows them to offer a wide range of embedded finance products, from payments and insurance to branded debit cards.

These providers also offer payment gateways that streamline the checkout process. Transactions are secure and compliant with features like identity verification, account verification, and direct connections to Pay by Bank APIs.

And here's the best part: these solutions often come with much lower processing fees than traditional methods. That's because account-to-account (A2A) payments bypass the intermediary fees associated with credit cards, making this the ideal approach. 

5. Enhanced Customer Experience

Pay by Bank has made financial services more personalized. Real-time payment providers and banks can freely share real-time financial data (with customer consent). This means businesses can understand their clients better. They can learn what customers want, and can offer services to elevate their experience all based on detailed transactional data.

For example, Trustly Pay handles the entire payment processーfrom consumer onboarding to payment collection. Customers don't have to manually input their accounts and routing numbers. From the customer perspective, it’s as easy as signing into their online banking, choosing which account they want to use for payment, and they’re finished. It really is that easy.

But is it safe? Trustly’s risk engine uses machine learning to analyze patterns across its merchant base and flag unusual or suspicious activities. As a result, we can confidently approve and guarantee transactions in many cases. Fewer errors and false declines mean less frustration and involuntary churn.

Schedule a meeting with us to learn more about Trustly and how to incorporate real-time payments into your business.