Streaming media, on-demand encounters with service providers and all manner of instant interactions online have shaped expectations about how we pay and get paid — and when.
Elena Whisler of The Clearing House, explained in an interview that real-time payments volume will soar in the new year and beyond — at least doubling through the next 12 months.
Based on our research we found that real-time disbursements accounted for 17% of all disbursements made in 2021, up from 5.7% last year. Along with the growth in electronic payment methods, growth is coming from the availability of more real-time methods for businesses. More financial institutions are enabling the offerings as well.
Companies are also increasingly opting to pay their employees in real time, partially reflecting a shift toward the gig economy and project-based work.
“The concept of work today, get paid today programs in tight labor markets, especially retail and food services, could make a difference” in employee retention.
Individuals are willing to pay for instant access to funds in an account. Roughly one-third of respondents would be willing to pay fees in order to get paid more quickly — and the value and use cases for real-time payments extend far beyond the confines of simply being able to get (or send) money in an emergency. Speed also comes along with choice and control, and that’s why they are willing to pay for real-time transactions.
Consumers have grown to expect and demand real-time capabilities in all aspects of their lives — including transaction banking.
Consumers have become conditioned by their experiences with the streaming providers of the world, where one need not go to the theater to gain instant access to movies, day or night. They expect the same in financial services. Once you experience real-time deposits, it’s probably hard to go back.
Real-time payments are in their early stages, where dozens of domestic real-time schemes are taking shape around the world, and where interoperability still must be established.
To gain critical mass, you need the customer demand, the customer push for [real-time payments], but at the same time, you need businesses and financial institutions to offer it.
Word of mouth is proving an effective tailwind and we’re starting to see a diverse set of companies changing the business space as well as the [peer-to-peer (P2P)] space, such as Venmo, PayPal, Cash App and Zelle too. Many of those firms, apps and services will continue to speed up their payments.
Singapore’s nearly 60% growth in real-time payments during the pandemic, fueled in part by the continued entrenchment in digital wallets that are capturing more consumer transactions (while cash use is decreasing too).
For that kind of growth to be seen in other markets’ faster payments initiatives, interoperability is key. Interoperability is ‘bubbling up’ in a more regional fashion, particularly in Asian markets and in northern Europe. As business and travel resumes across borders, it follows that regional corridors will start to connect.
Looking ahead, RTP network volumes will “at least” double over the next year, driven by growth in the account-to-account (A2A) space and corporate disbursements.
We see 2022 as being a very promising year for growth in real-time payments!