Governments and open tech can defray the cost of real-time payments
In markets such as Singapore and India, proxy addresses allow payments to be routed using a mobile phone number or national insurance number instead of obtaining payees’ bank account details. Similarly, static and dynamic QR codes are now ubiquitous in locations such as China, Hong Kong, India and Singapore, enabling a buyer to scan a code to purchase and pay instantly.
The seller can then use the data linked to the QR code to process and reconcile the transaction automatically.
A common objection to adopting or accepting new payment methods is the implementation cost, and risk of fragmenting existing systems, processes and reporting. However, payment aggregator bank portals, such as Standard Chartered’s Straight2BankPay, allow companies to integrate multiple collection methods, including low value/high value, instant payments and mobile wallets, through a single channel.
The use of open APIs has also become prevalent, enabling banks and their clients to embed payment and collection services directly into their business systems, such as procurement, credit, finance and front-end customer solutions to streamline the flow of transactions and data and enhance the customer experience.
Real-time and instant payments are not a phenomenon restricted to certain economies or digital-native industries. Although the pace of adoption varies globally, embracing real-time payments is becoming not so much a choice but a necessity, both in the C2B/B2C space and in B2B.
This in turn will have significant implications for accelerating supply chains, connecting industry ecosystems more dynamically and ultimately building competitive advantage through improved working capital and risk dynamics and better customer satisfaction.
By Tarek Elyafi, managing director for Americas cash management and head of sales at Standard Chartered, and Shantanu Vijaykumar Bhosale, head of cash product at Standard Chartered Americas.