Accenture Banking Blog

Our latest Payments Pulse study is full of many fascinating insights. One of the most interesting details from this global survey of banking executives deals with real-time payments, or RTP. Seventy-eight percent of respondents believe either that payments must be instant right now or that they will become instant in the next year.

The industry consensus around real-time payments makes them one of most important trends shaping the payments sector right now. They offer ubiquity, high speed of payment, extensive data, real-time messaging and 24/7/365 availability. That means they can improve cash flows, boost operational efficiencies, grow customer engagement, and enhance data transparency and accuracy.

More than 50 countries are already active with RTP programs. Some of the more interesting uses include chat-based services, retail apps, instant loans and open APIs.

As the momentum behind real-time payments grows, major payments infrastructures such as EBA Clearing RT1, SCT Inst in Europe, the UK’s FPS, the US’s RTP and other real-time payments schemes across the globe are adopting the international ISO 20022 standard. This allows payments transactions to be sent with additional data, which boosts transparency and makes cross-border transactions easier. It also makes it easier to automate the reconciliation process and achieve straight-through processing.

Much of the current activity in the RTP space can be traced back to 2016. That’s when Mastercard acquired Vocalink, a leading global provider of real-time payments systems with considerable expertise in building and operating RTP systems. The acquisition has acted as a spur to innovation and competition in RTP systems.

Another good example of RTP innovation is the P27 initiative in Nordics. P27’s goal is to establish a single pan-Nordic payments infrastructure for the 27 million inhabitants of Denmark, Sweden, Norway and Finland. It aims to create the world’s first real-time cross-currency payments infrastructure, which would instantly convert foreign exchange transactions and carry out the accompanying screening in real time.

RTP is also an attractive proposition for merchants, who can offer it as an alternative to credit cards and their related interchange fees. Delta Airlines estimates that it could save up to US$600 million a year if customers switched from credit card payments to RTP. Meanwhile, mobile payment apps like Zelle, Venmo, Square Cash and Apple Pay are now enabling consumers in the US to pay bills or transfer money instantaneously.

As instant payment volumes grow, RTP providers and financial institutions must start to think differently and collaborate with trusted payments security partners to address the challenge of payments fraud.

Banks that are first to adopt real-time payments in their core cash-management product stack will also be better placed to differentiate their products and services.

Next time, we’ll look at the emergence of value-added payments services.