It is tempting to see instant payments as all upside. On the way in, they help businesses manage their capital more efficiently and they reduce the need for expensive short-term financing. But they also mean cash is going out of the door that much faster, which can hurt the unwary.
The direction of travel is clear: the real-time payment market is worth about $26 billion to $28 billion, and analysts project a compound annual growth rate of between 16% and 35% over the rest of this decade.
But the focus for corporates is on using instant payment solutions for receiving cash from their consumer customers, says Andrew Foulds, director of product management for high-value market infrastructures at Fiserv, a fintech and payments company.
Real-time payment services – particularly those offered via modern application programming interface (API) stacks – are less expensive and cumbersome than older solutions, neatly solving the traditional dilemma of whether to use payment processes that are faster or cheaper.
“Corporates will increasingly use these systems because they are less expensive to operate [than conventional payment systems], with less need for manual intervention,” says Foulds.
Most corporates would say they want to get paid faster and settle less quickly
But according to James Winter, senior vice-president for Europe at Thunes, a Singapore-based payments infrastructure provider, leveraging this technology for faster settlement while meeting the needs of treasury liquidity management is a different matter.
“Most
