Banking Fintech News

Real-Time Payments Gaining Traction Among Businesses

Survey from Citizens Commercial Banking finds nine out of 10 businesses interested in new payment standard

Real-time payments (RTP), the emerging standard in U.S. billing and payment processing, continues to gain traction among businesses with nine out of 10 business leaders reporting interest in the network, according to Citizens Commercial Banking’s second annual Real-Time Payments Outlook.

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The nationwide survey of 252 corporate decision-makers found that only 9 percent currently have no plans to implement RTP, which is the biggest upgrade to the U.S. payments system since the Automated Clearing House (ACH) in 1974.

“I’m encouraged to see the level of interest in real-time payments because it offers such tremendous advantages to businesses in terms of speed and certainty of payments,” said Matt Richardson, Head of Product Solutions at Citizens.

Customers using the RTP network can make payments electronically and the funds instantaneously move from one account to another. Information about the transaction also travels with the funds, so recipients know where the money is coming from and why.

The ability to access real-time payments is a critical issue for business leaders. A bank’s ability to provide RTP was cited by survey respondents as the second-most important determining factor in choosing a banking partner, ranking right behind a bank’s ability to provide solutions throughout their business lifecycle. In fact, RTP solutions were ranked as a more important service for banks to provide than knowledge or expertise in the business’ industry or the lowest-cost financing.

When respondents were asked to name the ways in which they anticipated using RTP, the two most commonly cited applications were to manage cash flow more accurately (cited by 52% of respondents) and to conduct general accounts payable activities (46%). Other common uses included payroll (43%), to facilitate payments requiring immediate receipt (42%), and to improve collection activity and posting to clients’ accounts (40%). Another common use, cited by 38% of respondents, was to replace check payments.

Other key findings include:

  • 81% of respondents expect RTP to dramatically transform the way business is done.
  • 77% of respondents agree that digital currency will play a valuable role in the future.
  • 66% of respondents expect that they will stop making or accepting payments with cash or paper checks.

“The pandemic has disrupted many businesses and exposed the downsides to relying on paper payments,” said Richardson. “We will continue to support omni-channel solutions and serve our clients however they need us, but the crisis has demonstrated how resilient and reliable digital payment methods can be and has prompted many businesses to redouble their efforts to digitize their payments.”

The survey sampled a range of businesses in different sectors with annual revenue of $1 million to $25 million (32%); $25 million to $100 million (18%); and more than $100 million (50%). It was conducted in June 2020. For more information about real-time payments.

Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens Commercial Banking approach puts clients first by offering great ideas combined with thorough market knowledge and excellent execution, to help our clients enhance their business and reach their potential.

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