Payments are measured by many attributes — speed, cost, ubiquity, security. Of these, speed is probably the one that has the most room for improvement. In a world where an e-commerce purchase can be made and the product delivered within the hour, it seems more than a little archaic that the time between payment and settlement for many transactions is still measured in days.
The case for real-time payments isn’t just about instant gratification, however. Truncating settlement times has enormous benefits to FIs, businesses and even governments. A 2008 analysis by Australia's Center for Economics and Business Research (CEBR) found that real-time payments in regions without a central payments infrastructure and where funds are available the following day could improve GDP by as much as 1%.
However, real-time payments technology also has the potential to cannibalize existing revenue streams such as wire transfer, and some FIs are loath to disrupt the status quo.