Real-time payments is a payment processing network that instantaneously sends money between two parties. Real-time payments are considered innovative and forward-thinking because transfers between bank accounts previously took about one to three business days.
Companies are adapting to favoring real-time payments because it allows business owners to hold onto cash for a bit longer and avoid cash flow gaps caused by slow payment transfers with high fees. If you’re new to the world of real-time payments, here are three things you should know.
1. There are 5 different categories of real-time payments
If you want to try using real-time payments, you’ll need to understand that there are several different types. To be successful with real-time payments, you’ll want to predict where they best serve you.
According to this Deloitte, the five categories of real-time payments are business-to-business, business-to-customer, consumer-to-business, domestic peer-to-peer, and cross-border peer-to-peer. The size of transactions will depend on which category you fall into. For example, B2B transaction sizes tend to be low while P2P tends to be medium to high.
2. You must always be aware of fraud
Some business owners think that when they adapt to real-time payments they’ll be immune to common fraud attacks. This premise is false because new types of fraud are on the rise like authorized push payment fraud.
This fraud method allows hackers to trick their victims into transferring funds into their accounts by pretending to be a business they’re not. The impacts of this type of fraud attack leave business owners blindsided and feeling hyper-aware. Luckily, new fraud detection software is being created that uses machine learning and behavioral analytics that make fraud attempts easier to catch. Keep an eye out for fraud and if you ever feel like something is off, do not give your credit card information away.
3. It does not cost more to use real-time payments
Real-time payments cost the same as standard electronic payments, averaging about $1.95 per 10 transactions. Real-time payments are for you if you want to streamline payments and liquidate funds faster but are on a strict budget.
If you need more help understanding real-time payments and the world of payment processing, contact me at Richmond Financial Services. I help my clients enjoy perpetual savings by driving down payment processing costs and I can’t wait to help you.
