AFP Payments Guides

AFP Payments Guide to Making a Business Case for Real-time Payments

Underwritten by MUFG

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The 2022 AFP Payments Guide to Making a Business Case for Real-Time Payments, underwritten by MUFG, explores the immediate “must-know” information for practitioners to make the business case for real-time payments and set businesses up as adopters.

The development of instant or real-time, payments has already made a significant change to consumer payment habits. This has not yet translated into a major shift in corporate payments behavior, although there are some examples of companies that have adopted real-time payments to great effect, albeit alongside traditional payment methods.

To take full advantage of real-time payments, practitioners are likely going to require some internal systems upgrades. For example, changed disbursement procedures will give rise to different operational risks to manage, and internal systems will need to be able to capture and process payment data in real-time. So, while companies may not switch to real-time payments tomorrow, practitioners need to start planning to switch now, not least of all because they may need to schedule IT support for the systems’ changes. 

The Real-Time Payments Guide explores: 

  1. Understanding real-time payments – these methods are different from other services falling under the “faster payments”. 
  2. Making a business case for real-time payments identifying potential beneficial use cases that might drive the adoption of real-time payments.
  3. Real-time payments compared to existing practices identifying circumstances in which real-time payments offer improvements over existing processes.

Download the Real-Time Payments Guide


Understanding Real-time Payments 

Real-time payments represent a major step change in the evolution of payments and should be viewed as a distinct service based on three key features: 

  1. Instant, or near real-time, transfer of value: A real-time payment, once initiated, should be received by the beneficiary within a few seconds.
  2. Irrevocability: Once payment has been sent, it cannot be stopped, amended or recalled. This gives the beneficiary security of funds. The payer must accept the additional operational risk as a result. 
  3. 24/7/365 operation: Unlike other systems, including faster ACH payments, real-time payment systems are available at night, on weekends and during public holidays.

Download the full Payments Guide to learn more about real-time payments 


Making a Business Case for Real-time Payments 

The focus of this guide is to identify potential beneficial use cases that might drive the adoption of real-time payments. 

On the disbursement side, companies will be in one of two scenarios: 

  • Shifting from an existing electronic payment method (i.e., wire, ACH or card) to increase their use of real-time payments.
  • Establish a new electronic payment process, either as a startup or as a replacement for checks.

On the receipts side, there may be instances in which companies can incentivize their customers to pay in real-time.

View the full Payments Guide to learn more about real-time payments in business


Real-time Payments vs. Existing Processes

Real-time payments offer a clear alternative to cash and checks for consumers, especially on a peer-to-peer basis. For companies to see the benefits of real-time payments this will mean identifying circumstances in which real-time payments offer improvements over existing processes. This Payments Guide compares the following processes to real-time payments: 

  • Wires
  • Payment Cards
  • ACHs
  • Checks
  • Cryptocurrency

  • Download the Real-Time Payments Guide