Instant / Real Time Payments

Background:
In the UK, we are all becoming used to sending money from our Bank Account to friends and families Bank Accounts' using our banking mobile apps, and increasingly to merchants and small businesses. We usually expect the recipient to receive the money immediately. This is also common practice in Scandanavia as well as becoming more common in the SEPA (€) area with the continued roll out of SEPA Instant Payments.

Why is this important to businesses and corporates?
• Instant/ real time payments can be a useful way to pay a supplier or urgent bill as an ad hoc payment rather than part of a payment run, which tend to be done in batches. Utilising instant payments for customer refunds can create a good client experience as they potentially see the refund being credited immediately.
• Receiving funds by instant payments is a more obvious focus. Business may already be receiving payments to their account today from an instant scheme. However, these may not be easy to reconcile if the reference / invoice number and /or transaction amount does not directly match the receivable. Solutions are available to close this gap and leverage the speed and relative cost efficiency of instant payments. This payment type is often cheaper than accepting cards.

Questions a business need to consider include:
• Are they aware of these credits being received immediately?
• Has their client (the payee) an expectation that the business will confirm & reconcile the transaction (and thus compete the order immediately)?
• Have they developed the processes to immediately reconcile the payment received?
• Have they informed paying customers on the reference text to use to enable reconciliation?
• Have they developed the ability to receive instant payments through their website? in £? in €?
• How does this impact their merchant account and card processing?