Instant pay for corporates also helps consumers
Instant payments give corporate treasurers greater control over their payments, allowing them to make on-the-spot payment decisions and hold on to liquidity for longer.
Instant payments enable informed and timely views on cash positions, enabling management of treasury risk. ISO 20022 data- carrying capabilities also allow corporates to attach invoice data to a payment, allowing for more efficient reconciliation.
The combination of instant and enhanced data-carrying capabilities is extremely attractive to large corporates, and in turn, greater corporate usage of an instant payment system will increase volumes and lower costs.
Benefits are not only limited to corporate treasurers, but also B2C treasury departments. Instant payments offer new ways to make payments to customers. As mentioned, R2P can also lower cost, reduce risk of fraud, and increase information around each transaction, all of which are key requirements for modern treasury departments.
Moreover, as domestic instant payments schemes grow, there is an opportunity to line these systems together to deliver cross-border real-time movement of both funds and data for corporate and commercial transactions.
As payments become increasingly embedded in our daily lives and interactions, it is inevitable that instant payments will become more ingrained in the social media experience. This is already the case across many Asian countries, but momentum is slowly building in Europe and the U.S. as well. For example, First Direct’s Fdpay service allows customers to make P2P payments within social media apps. In addition, Instagram, WhatsApp and Facebook are all actively exploring instant payments and checkout options.
Watch this space. It is clear that building a foundation for innovation now will enable banks to create points of differentiation and tap into new revenue streams through R2P, QR codes, leveraging enhanced data, corporate instant payments and new channels.
But to fully realise the return on investment, banks will need to overcome the legacy payment environments many are encumbered with, and will need to develop a powerful transformation strategy to ensure their payments landscape is equipped to fully harness the benefits.