Thursday, September 20th, 2018
Everyone wants their money and/or their purchases faster, which is why financial decision makers in the world are looking for ways to make real-time payments a reality for mainstream businesses, including those in the retail sector.
What are Real Time Payments?
Real time payments are electronic retail payment solutions that are available all day, every day of the year. These payments result in real time or close-to-immediate interbank clearing of transactions and crediting of a payee’s account while the payer receives a confirmation.
What’s Driving the Trend?
As the world becomes less dependent on cash payments, merchant service providers are realizing that they have to adapt to meet is customers’ demands. Customers want to paying for and receive their purchases as quick as possible, which is where real-time payments join the fold.
Their demand for more convenience and flexibility means customers no longer need to depend so heavily on traditional banking. Those in the payment industry believe real-time payments will broaden access to banking services, support economic growth, further reduce the use of paper money and checks, and offer a good alternative to Visa/MasterCard networks. Some also believe it will support competition and encourage merchant service providers to create more innovative, value-added payment services.
EU on the Move with Faster Payment Services
In Europe, more entities are adopting faster payment services. For instance, six new members, including to German banks, joined the EBA Clearing House’s real-time payment service, RT1. The latest additions increased the payment pool to 1,000 payment service providers.
UK Took the Cue and the Lead on Faster Payments
U.K.’s Faster Payments Services is on the cutting edge, by taking what originally created as an interbank rail and working to apply it to all transactions, including those in the retail space. UK retailers want a faster cheaper alternative to card-based payments and Faster Payments may be the answer.
Challenges the Must be Addressed
To bring real-time payments to retailers, the system must address reversals. Since transactions happen within seconds, a payment cannot be stopped or reversed if a Faster Payments transaction was made to the wrong account. Users can limit mistakes by doublechecking the account number and sort code before submitting the payment. If a payment was made to the wrong beneficiary or the wrong amount was sent, there is no guarantee that the user’s money will be refunded. If Faster Payments is able to makes its services available to retailers, it will require new protocols to handle situations when customers are dissatisfied with their purchases. Also, it will need to address security issues and how it can better address fraud.
The Final Say
The quest for faster payments is here. The move to real-time, efficient payments is making mainstream transactions a reality. Payment service providers need to be ahead of the curve on real-time payments. They need to get on-board and start exploring opportunities before it’s too late. The demand for faster payments is not going to go away anytime soon. The best merchant services UK will be following this trend and pursuing ways to provide real-time payments for its customers.
Topics discussed in this article:
- best merchant services uk
- Real Time Payments