October 22, 2019
TABLE OF CONTENTS
When it comes to business drivers, Financial Institutions (FIs) consider competitive pressure to be their least likely reason to launch Real-Time Payments (RTP), per Levvel’s 2020 RTP Report. While customer attraction, demand, and retention ranked higher, competitive pressure garnered less consideration. We believe this perspective correlates with the relative youth of RTP as a payment rail and the lack of market education around its benefits.
FIs and their representative customer bases are familiar and fairly comfortable with a potentially lengthy process to support the initiation, settlement, and reconciliation of a payment. As a result, FIs haven’t rushed to educate their customers about RTP and the use cases that it can fulfill, including:
This can include medical, payroll, and transportation-related payments. Unlike wire and ACH, the RTP network is available for real-time payments 24/7/365 days a year. Payments can be made during off-business hours, thus preventing the potential for late or excess fees.
This can include account or payment status. Consumers can reduce customer service related fees, while less call volume means lower overhead costs for FIs and/or corporate organizations.
The RTP network is accessible in that it supports two-way communication in a standard format and within a secure network making the communication of payment and remittance information between sender and receiver more streamlined.
The RTP network supports credit pushes only, which helps to reduce fraud associated with debit risk.
As for where adoption stands two years post RTP launch, market education has yet to keep up with the speed at which technological advancements are being made. Once general consumer education around RTP and its practicality grow, there is potential for competitive pressures among FIs to launch RTP to grow as well.
Our 2020 Real-time Payments Report is now live. See the latest industry insights, emerging trends, and critical data shaping the future of real-time payments here.
Financial Services Consultant
Chris is a Financial Services Consultant who works with financial institutions and enterprises of varying sizes to help them identify and implement their payment strategies. He comes to Levvel with 9+ years of experience in banking having held various roles in Treasury Management Sales and Product Management, as well as Direct-to-Consumer Digital Transformation.
On January 28, 2021 at 2 PM ET, join industry experts from Levvel and Bank of the West for a webinar on how financial institutions can be successful in the new world of digital payments and ‘Banking as a Service’ (BaaS).
While adoption of The Clearing House’s Real-Time Payments (RTP) is picking up among financial institutions, its spread among businesses is still early.
In our recent survey of businesses of all sizes, 49% of respondents said they were uninformed about RTP. This gap can be filled by financial institutions, business process automation software, and even businesses themselves.
Levvel Research's 2021 Real-Time Payments Report (RTP) provides a guide to the many use cases of RTP for businesses and outlines the ROI of adoption for financial management processes, product delivery, and customer satisfaction.