How to unlock the future of banking with real-time payments


In a recent post by tietoevry, the company outlined why banks must ‘act now’ to benefit from real-time payments.

The appeal and growth of real-time payments are apparent globally, but a deeper delve into the statistics indicates varying progress across regions.

According to Grand View Research, the real-time payments market attained a valuation exceeding $17bn in the previous year, with a predicted growth rate surpassing 35% per annum until 2028. In Europe, however, the growth is sluggish, with Mordor Intelligence reporting a figure of merely 24.3% – just about a third compared to the development seen in Asian economies. A somewhat grim report from the EU reveals that as of Q1 2022, only 61% of payment institutions have subscribed to the SCT-INST scheme, and a mere 11.48% of account-to-account transactions utilised real-time payments up until March 2022.

There is no questioning the burgeoning demand for real-time payments from consumers and SMEs alike. For banks to cater to this need, a sound and robust system must be in place. In practical terms, banks need to delineate the clearing mechanism used for different payment types (batch or real-time payments), then pivot a considerable portion of their batch payment volumes to real-time clearing – a move that becomes even more relevant with the EU’s mandate of using SCT-INST from Q3 2023.

Initially, banks may not need to provide these offerings as immediate payments, considering many usage scenarios are content with overnight or end-of-business-day settlements. Nonetheless, banks must anticipate and prepare for what’s on the horizon, ensuring efficient payment workloads by considering factors like available liquidity, processing capacity and energy costs.

By proactively readying their systems for real-time payments, banks can establish a solid footing to seize upcoming opportunities. These include the adaptation of variable recurring payments for bills and subscriptions, request-to-pay services, and more. The UK, a pioneer in Faster Payments and set to implement Variable Recurring Payments this year, witnessed a 23% surge in instant payment volumes last year, with SMEs increasingly adopting instant payments over traditional batch payments.

Real-time payment-based services offer not just quicker, more convenient payment options for customers, but also allow businesses to foster improved relationships with their clientele. In addition, businesses can leverage real-time payment services to enhance cash flow management, working capital flows, and reconciliation. As these services evolve, banks can expect additional product opportunities, such as utility bill splitting among flatmates or deferred regular payments to assist consumers with cash flow management.

Tietoevry leads the way by offering a Software as a Service (SaaS) solution incorporating real-time payments facilitation and recurring instant bill payments, catering to the entirety of Europe.

Read the full post here.

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