Wednesday, June 19th, 2019
While real-time payments may seem like a dream for some businesses, other companies and retailers have already made the option available for their customers.
But what’s going on in the global open payments ecosystem and real-time payments environment? Find out what Dr. Leo Lipis and Craig Ramsey, Payment Leaders at ACI Worldwide think about real-time payments based on the data from the recent white paper from Real-Time.
Read out the opinions of both of these payment experts as they respond to the following arising questions in real-time and open payment services.
Where are real-time and open banking payment services gaining popularity?
Lipis: Asia is an excellent example of how banking institutions can rake in revenues from adding new payment avenues for their retailers. Europe has also shown interest in the use of PSD2-like options to achieve this.
China and Japan are a potential market because retailers and merchants in these nations use APMs, non-bank-issued cards, mobile wallets, and more.
The market is looking to see to what extent real-time payments and open banking are a danger to the franchise of credit cards in POS transactions, more so when we look at European and North American markets. Merchants love the idea, but banks are not sure about “staking” in it.
Ramsey: Banks will make a move to protect their revenues based on their current business structures.
If real-time payment providers target traditional retail payments and credit cards instead of new-age transaction banking, banks may retaliate against real-time and open payment services.
What Models Can Help Move Transactions away From Plastic to other Payment Forms?
Ramsey: No doubt, Real-time, and open payment avenues can ensure a better customer experience than what we have now. They can help create a noteworthy shift in the balance of cross-channel transaction volumes.
As we speak, e-commerce retailers need ways to create a smoother CX in payments than what credit cards offer, and denying these new avenues an opportunity will mean acting against the demands of their audience.
Lipis: The ultimate buyer is not worried about the payment process; all they care about is the ease of use and how it positively impacts their lifestyle. These new avenues may mimic the performance of card payments with whatever the shopper already has, like a mobile device, and offer an advantage like increased loyalty points.
How Can Merchants Tap into real-time Payments To Offer Better Services to their Buyers?
Ramsey: Because interchange fees are still a burden for Merchants, real-time payments are an easy way to reduce costs for retailers and allow them to cut product and service prices for buyers and customers accordingly.
But merchants will likely do this via loyalty and reward points instead of offering discounts.
Lipis: Open banking services can go a long way in helping merchants in search of a standardized API. Retailers care more about the customer experience of their sites or apps. So advocates must work on the simplicity of implementation if businesses are to benefit from it.
Both analyst have reasonable speculations about real-time and open payments services. Let’s wait and see how the proposed approach will be accepted among different retailers.