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9 Jan 2023 Article

The Ultimate Guide to Real-time Payments

This is the ultimate guide to real-time payments. Payment technology has evolved conisderbly over the past decades. Over the last century, cash, card and checks have been the go-to methods for businesses and customers alike. Meanwhile, B2B transactions, especially international and cross-border payments, have often relied on slow and expensive wire transfers.

More recently, the introduction of electronic bank transfers has allowed us to make payments directly from one bank account to another. However, even today, the speed of electronic transfers remains dependent on a country’s banking infrastructure. This is causing unpredictable waiting times and significant uncertainty for both businesses and consumers. 

Following the launch of faster payments in 2008 in the UK, ‘instant’ or ‘real-time’ payment technology has increased in popularity. The global real-time payments market size is expected to expand at a compound annual growth rate (CAGR) of 34.9% from 2022 to 2030.

It’s easy to see why real-time payments are becoming more popular in the ever-evolving digital economy. In this article, we’ll take a deeper look at real-time payments and their benefits for you and your customers.

What are Real-time or Instant Payments?

Real-time payments are monetary transactions made between bank accounts that are initiated, cleared and settled within seconds. This type of payment can be made at any time of the day or week, including weekends and public holidays. Real-time payments deliver a significantly faster, more consistent means of payment than most legacy payment rails. Legacy payment rails can take several days to reach a recipient. 

Instant payments are typically achieved by using a variety of technologies, and open banking can play a crucial role. Open banking-based instant payments allow consumers to pay by logging in to their bank with their digital ID. No need to download apps or use payment cards.

The speed and security of real-time payments improve transparency and speed. This is helping banks, businesses, and consumers manage their money more accurately and efficiently. 

While enterprise (high value) real-time payments predominantly accommodate transactions between banks, ‘retail’ (low value) instant payments are perfect for small to medium-sized businesses and everyday consumers.

What is SEPA Instant?

Using the European payments infrastructure, the Single Euro Payments Area (SEPA) introduced an instant payments system: SEPA Instant Credit Transfer (SCT). SCT Inst is a payment-integration initiative led by the EU to simplify bank transfers (denominated in euros). 

The SEPA instant payment process includes sending a notification of the transfer to both the payer and the payee. The transaction is completed within 10 seconds. They are single, irrevocable payments capped at €100,000 and are only available in SEPA countries. This makes it possible for people doing business within supported countries to make cashless payments across borders with the same cost and convenience as domestic payments.

However, participation in SCT Inst is not mandatory for financial institutions. So, while some European banks have been offering instant payments for some time, others have yet to communicate a date for when they will support the new system.

Brite Instant Payments Explained

Unlike SEPA, Brite Payments delivers consistency in instant payment processing across the Eurozone, regardless of its status with SCT Inst. Through its proprietary banking network, Brite utilises the optimised route for payment, using whichever rails are available. Using this method, Brite is not tied to the availability of SEPA.

For online businesses who want to pay and be paid quickly, Brite is a payment method that offers fast transactions and reduced friction. Based on open banking technology. Users only need top-of-mind information, with no downloads or registrations required. Cutting-edge security measures keep customers’ money safe while being more cost-effective than any other payment method.

The Benefits of Instant Payment Technology for Your Customers

With funds more readily available and payments cleared within seconds, customers can be more agile in budgeting and cash management. Meanwhile, businesses can eliminate the time and resources typically associated with making payments, which boosts efficiency and aids growth. 

The 24/7 global nature of real-time payment transfers also allows for more flexibility and meets the rising expectations of merchants and consumers who value instantly available goods. 

Research shows just how much instant payment technology is valued across the world. A 2020 survey of consumers in six markets on three continents revealed that real-time payments are considered as important or more important than access to the internet, next-day delivery, and even everyday utilities. In addition, a staggering three-quarters of people said they would like all digital payments to be in real-time.

Do Instant Payments Cost More for Businesses and Consumers to Use?

In general, instant payments cost about the same as non-instant electronic payments, which is around USD $1.96 for 10 transactions per capita. A key benefit of the Brite Instant Payments is that users don’t need to pay fees. This is making it a more cost-effective option than other payment methods on the market.

And by simplifying the payment process and cutting out the middlemen, businesses have access to more flexible, predictable pricing for better budgeting and financial visibility.

The Next Generation of Payment Solutions

By solving the payment challenges associated with paper cash and bank transfers, it’s clear that real-time payments are here to stay. Offering seamless and faster transactions, immediate access to funds, and a higher level of security, it’s time to cash in on instant payment technology.

With Brite Instant Payouts, you can easily and securely use open banking technology to pay and receive money from your customers in one simple click. Gain peace of mind by removing risk, improving cash flow and reducing commission fees. 
If your business needs to transfer money quickly and safely… let’s talk.

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