In a climate where digital transformation has heightened expectations around sending and receiving money, the adoption of real-time payments is of real value to businesses looking to thrive and grow.
Technology innovation is a significant driver for change across all industries. Businesses have to keep up with new technologies, systems, and standards to satisfy their customers. While consumers have always leaned towards speed and convenience, the increasing global adoption of real-time payments across the world has supercharged expectations. People want to be able to buy goods, pay bills, and transfer money with immediate settlement. The pandemic accelerated the move away from cash and towards digital payment technologies, and real-time payments offer everyone involved in the payment process what they want.
The Benefits of Real-Time Payments Adoption
Here are five reasons your business needs to get on board with real-time payments:
1. Greater Visibility of Payments
Real-time payments offer greater visibility of transactions being both sent and received, which can give you an edge in the marketplace. The instant settlement and view of day-to-day financial transactions makes cash management faster and more efficient, as well as alerting you to any potential issues as soon as possible.
2. Better Cash Flow Management
If you’re used to waiting days for the settlement of transactions as your merchant account provider processes them, real-time payments will have an instant and powerful impact on your cash flow. The uncomfortable fact is that poor cash flow management is the most common reason for small businesses failing. And with the stresses of the pandemic adding even more pressure on liquidity, cash flow has become an even hotter topic.
48% of small businesses say that just one missed payment could be the end for them. Real-time payments that settle instantly could make a world of difference. It’s not only the immediacy of customer payments—transactions that are irreversible and viewable in real time also encourage a more predictable, stable cash flow.The same goes for making payments to suppliers.
3. Increased Revenue
The adoption of real-time payments is without doubt a revenue driver, firstly because better cash flow management gives more clarity over your overall financial position. With a more accurate view, you’re able to make more informed business decisions, which can boost your revenue.
Offering your customers another fast, convenient payment option alone is likely to encourage spending. When you add to that time/cost benefits of real-time payments to your business, you’ll be able to work more on innovation to produce newer, higher value offerings.
4. Stronger Contractor Relationships
Paying your employees, contractors, or gig workers using real-time payments means there’s no lengthy wait for their money, which can be the case with other payment methods. The truth is, people want to get paid for the work they’ve done as soon as possible, especially now when we’re all so used to the speed and efficiency of the digital world.
5. Stronger Customer Relationships
Being able to consistently meet your customers’ needs helps you improve on existing customer relationships, and confidently attract and engage new customers. So what is it that makes real-time payments so attractive to customers? Today’s consumer is used to being able to do almost everything online and in real time—they don’t want to have to do more than a couple of clicks to get things done.
Refunds are another significant touchpoint where real-time payments save the day. Having to wait three to five (or more) business days for their money to hit their bank account or credit card is, at best, a frustration, and, at worst, something that can cause financial hardship. With many customers having to budget carefully, having to wait for refunds can lead to stress and overdraft fees or high-cost, short-term credit.
And bear in mind the aforementioned benefits we’ve covered here. The more smoothly your business is running, the more you can concentrate on delighting your customers.
Adopting Real-Time Payments Technology
If you’re still on the fence about whether real-time payments adoption is right for your business, be aware that your competition may have already decided! The transaction volume of real-payments in the US alone is expected to reach $4.2 billion by 2024 (from $734 million in 2019) at a compound annual growth rate (CAGR) of 42.1%. And this may only be the tip of the iceberg.
As with any new technology, it’s natural to have concerns about adoption. But with consumer expectations higher than ever, the question is whether businesses can afford to “wait and see”. The future of payments is in options that are faster, more efficient, and more secure. PayFrame’s real-time payments system fits smoothly into your existing processes, and you’ll benefit from our expert team supporting your transition every step of the way.