The world of payments technology seems to have two speeds at which it operates: glacially slow and sudden bursts of rapid innovation and change. With the global pandemic redefining accepted norms for how we collectively work, interact and connect, it’s clear that we’re in a moment of quick innovation and adoption, especially when it comes to real-time payments.
FIS’ recent Flavors of Fast report found usage of real-time payments has already accelerated amid the COVID-19 pandemic. The numbers can’t be ignored: Six countries have seen more than a twofold increase in the number of real-time payments processed over the past year and four have seen more than a twofold increase in the monetary value of real-time payments transactions.
We’re just at the beginning of what will be a period of significant, lasting changes to the world of real-time payments.
For starters, there will be more collaboration between countries when it comes to real-time payments.
The influence of COVID-19 has accelerated the need for more collaboration between countries for services like cross-border and supply-chain finance. The old ways of doing business are no longer sufficient and archaic systems are slowing down the speed at which international entities can move money. Having systems that can easily “talk” to each other are being born of necessity and as the pandemic forces us all apart, digital technologies are required to keep us together, even across borders.
This will also lead to more harmonization of rules and regulation globally and will greatly reduce friction in global trade. Where digital commerce friction remains, governments will start to align on global policy and standards to make a more seamless global economy.
Additionally, the world of payments and banking will become more converged for retail, commercial and wholesale.
As end-user behavior and adoption of real-time payments undergoes a massive shift across the board from average consumers to back-office managers, the systems are going to converge. There are a growing number of use cases for real-time payments spanning B2B treasury payments, person-to-person real-time cross-border payments, emergency insurance remittances and many more, all of which are fueling real-time initiation, clearing of funds and the overall economy.
In order to accommodate real-time processes, we can no longer have siloed systems. The lack of standardization in the past created a cluttered and confusing client experience. Now, technology and service providers are going to bring clarity and consistency to their product offerings by focusing on client experience as well as the technology behind it.
