Real-time pay can ease the stresses of the gig economy
For the financial technology industry, a reliable and secure method for submitting real-time payments (RTP) is a game changer. For context, RTP is a method for the immediate transfer and settlement of funds between two parties. The key word is “immediate” which is a stark contrast to other forms of payment such as ACH or checks that take more time and are costlier.
As with most technologies, the evolution of RTP has been swift. This evolution is driven by customer demand, which pushes forward most advancements in mobile, especially the need for increased speed and simplicity. Companies recognizing this trend can get in early on RTP by presenting customized payment solutions to improve transactions with customers, suppliers or even non-traditional employees.
A system of real-time payments offers significant benefits for both the consumer and business-side of a transaction. The immediacy and speed of RTP is unmatched and eliminates traditional wait times that might frustrate the recipient. Slower methods of payment can also generate “where’s my payment” inquiries that tie up customer service departments.
Fast and simple payments are useful for emergency situations, whether it’s a parent sending their college kid money for a car repair, an insurer disbursing disaster relief funds or a person seeking shelter. Expediency and transparency are paramount in such situations.
Additional benefits of an RTP platform include fraud reduction, due to easier end-user validations and streamlined sign-up and payment processes. Refunds and disbursements also happen immediately, further improving the customer experience.
Real-time payments allow businesses to better satisfy non-employee workers, suppliers and partners. For example, the rise of gig workers throughout multiple segments of business is changing how work is done and the very definition of an employee. By delivering payments immediately through an existing payments platforms, firms can meet the expectations of gig workers who are increasingly important to the company’s functions.
RTP gives accounting departments a tool to better manage cash flow. Since transactions are “settled up” immediately, the accounting team always knows where they stand in terms of cash on hand. Faster payments enable more predictable budgeting for both consumers and companies, as it gives them more liquidity. Firms managing multiple types of payments will need to blend RTP with ACH and others but are best served by shifting toward RTP in order to meet the on-demand needs of the modern economy.
For the financial community, RTP offers a transformative new way to service customers and perform financial transactions. It aligns well with mobile-centric consumers who expect convenience and speed with their brand interactions. There’s a consumer expectation for actions such as ordering food, paying a bill or finding directions to all happen in real time. Companies need to adapt by responding with smarter financial architectures using RTP for immediate resolution and result in smoother customer experiences.
A variety of firms such as wealth management providers, online loan companies and other providers are leveraging real-time payment providers. They’re making this move in order to push away from older systems’ high fees, required lofty dollar minimums and slow processing times.
Real-time payments are attractive for brands because some companies make them available as a white-label solution. A trusted partner runs the back end of the process, while the customer-facing elements all reflect a company’s trusted look and feel. This flexibility means brands in non-financial sectors can still meet demand for RTP through a turnkey plug-in solution. They also rely on a third party to manage the tricky, and often cumbersome, regulatory procedures and rules that come with financial transactions. RTP is about removing friction from the payment process, by smoothing out the time and effort required to complete transactions, all while comforting consumers.
RTP is at the center of a confluence of factors changing how businesses operate and consumers interact with brands. Mobile and an expectation for transparency and speed have made RTP a near necessity for companies to improve efficiencies and provide a customized experience including tailored payment solutions.