Instant payment systems promised to revolutionize transactions by providing immediate money transfers. However, years after their initial introduction, many businesses in the U.S. continue to find their benefits limited. This gradual pace of adoption serves as a reminder that transforming enterprise financial systems involves more than speed; it requires integration with existing processes and systems.
Real-time payment systems, such as the RTP® network launched by The Clearing House, faced similar challenges during their introduction. Initial excitement in making instantaneous transfers was quickly tempered by the realization of intricate implementation hurdles. These early initiatives highlighted that rapid fund movement alone did not promise success, highlighting the need for broader infrastructure and process alignment.
Are Metrics Misleading?
Focusing on throughput and latency can overshadow other important measures of real-time payment maturity. According to Janis Wilkey, Vice President of Transaction Banking at Priority, success should involve a range of performance indicators.
“We measure success differently,”
Wilkey explained, advocating for deeper insights into aspects like payment diversification, cost optimization, client retention, and customer satisfaction.
A critical examination of payment systems should evaluate the value created by faster transactions, not just their speed. For businesses, the capacity to adapt to consumer demands may determine their relevance in the shifting financial landscape, similar to how some companies misjudged the shift towards streaming.
What Hinders the Integration of Embedded Payments?
Despite the clarity of the business potential for instant payments, execution often presents complexities tied to internal financial and technical systems. Wilkey pointed out several difficulties in merging new payment methods with existing infrastructure, describing how even basic accounting software integration poses challenges.
“There’s a challenge just even adding a payment method into an accounting software,”
she noted.
Navigating the complexities of accounts payable and receivable systems further complicates real-time payment integration. Instantaneous payment methods necessitate a strategic approach, prompting firms to reevaluate how they structure their transactional processes.
Consumer expectations increasingly drive payment innovations, influencing corporate transactions. Transactions that could benefit from instant payment include gig economy wages and insurance claims, where timeliness is crucial. According to Wilkey,
“Consumers influence the way we do business,”
reflecting a shift towards consumer-led design that businesses are beginning to embrace.
Sila, recently acquired by Priority, exemplifies this consumer-focused approach by simplifying instant payments while maintaining compliance. As consumers drive the demand for seamless payment experiences, companies recognize the need to support such transactions to retain relevance. However, the full realization of real-time payment efforts largely rests on successfully addressing integration and strategic challenges.
