The subject of real-time payments (RTP), and the potential for this new way of payment infrastructure to drive a fundamental change in the way both consumers and businesses transact, has been one of the biggest areas of activity and discussion in the financial services industry for some time. However, while RTP has been viewed as an issue of financial industry plumbing by those on the outside for some time, it is now seen as a route to deliver a series of operational benefits and enhancements to the customer experience.
Certainly, there has been something of a step change in attitudes over the past year. The results of Ovum’s latest Global Payment Insight survey show that the attitudes of merchants (defined in the study B2C retailers and services businesses) to the potential benefits of real-time payments have become markedly more positive in 2017 and 2018.
The combination of the successful rollout of new RTP infrastructures, alongside deepening discussions around broader domestic payment modernization projects (in almost all cases geared to broader business and consumer adoption), have been key in moving opinions.
At a global level, many merchants now view RTP as offering important benefits to the customer experience, particularly around time-sensitive areas such as the speed of refunds and disbursements. Across all markets, 78% of merchants (up from 59% in 2017) now believe RTP will deliver improvements in this area. Given the distribution models and wider dynamics of these sectors, it is not surprising to see that the retail (82%) and the telecoms (80%) sectors are the most positive.
Potentially more significant, given the emphasis placed by many merchants on delivering greater operating efficiencies in 2018, 78% believe that RTP can help them reduce costs. This has also changed sharply since 2017, when only 57% believed this. Given the opportunities in areas such as supply chain and improving the way in which temporary staff are paid, it is unsurprising to see that the largest companies see the biggest opportunities here.
While merchants expect to enjoy benefits from real-time payments in the near term, the longer-term impact is expected to be transformative for the retail payments landscape. At a global level, 77% hold the view that real-time payments will replace the use of payment cards over time. While it must be remembered that this is something of an open-ended view, this is nevertheless significant. The potential for merchants to reduce card-acceptance costs, and particularly chargebacks in e-commerce, certainly makes this a potentially attractive proposition.
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