There’s a lot of change in the world of business, retail, and finance. Customers are expecting faster and more accessible experiences, and they ways the pay are not excused from these expectations. This post will discuss the problems and potential pitfalls of real-time payment solutions, while providing a new way forward at the same time.
The New Landscape of Customer Expectations
Let’s start with the basics. Cash is expensive for business. You have to print it, regulate its circulation, and develop methods of storage. As technology has evolved, customers have embraced methods that allow them to pay without having to deal with paper currency. It’s easier to keep track of, and opportunities for waste and loss are reduced greatly. As Deloitte writes, customers have readily embraced easier ways to embrace new currencies. The real question is this: are financial institutions, businesses, and the necessary infrastructure ready as well?
Same Day Payment
A major obstacle facing the implementation of real-time payments is that many existing methods for expediting the payment process are workarounds for established clearing and settlement systems. Banco de Mexico uses what’s called the Interbanking Electronic Payment System to clear low value transactions within 20 seconds. Other banks and financial institutions have invested in tiered systems that allow for batches of transactions to be cleared multiple times a day. Unfortunately, there is not yet a standard playbook or mode of operations for these systems, making real-time payments a difficult to achieve reality.
New Modes of Behavior Demand New Payment Methods
But, that looks like that’s going to change very rapidly. According to this report, at least 30 countries are exploring implementation of real-time payment solutions. The US Federal reserve is currently working to develop a faster payment transaction system, as are many other federal agencies across the world.
However, it appears that private industry doesn’t want to wait. Peer-to-peer payment services like Square Cash, PayPal, and Venmo are making great strides in making real-time payment a reality. These services circumvent the clearing and settlement systems by serving as an intermediary of sorts for money. The money is held and made available for use by users before it enters bank accounts.
I don’t have a crystal ball, but all of this innovation will likely result in real-time transactions made available to all at extremely low cost. How exactly that will appear remains to be seen. But, Intel will be a part of these solutions, as real time transactions require massive circulation of data, securely and quickly. Our solutions are designed toward meeting the analytics and storage needs for the transactions of tomorrow. The day we see instant transactions, Intel will be close by. Discover more about how our products enable next-generation data solutions, and I’ll see you on the other side.