Are Real-Time Payments Becoming the New Normal?

The high demand for businesses to have quick access to funds has led to the growth of real-time payments (RTPs). An e-commerce platform requires fast processing of its online payments to help with cash flow. Real-time payments settle transactions immediately. Technological advances are contributing to instant payments, and it’s fair to ask if these options might become the new normal. Keep reading to find out what RTPs mean for businesses.

Real-Time Payments, What are They and How Do They Work?

Real-time payments refer to transactions that initiate, clear, and settle instantly between banks and merchant accounts. They use a real-time payment rail to provide payment processing solutions around the clock. It means that as a merchant, you don’t have to wait hours or days to receive funds after customers pay. RTPs don’t have a ‘float,’ which defines the period between when money leaves a payer’s account and when it’s available to the payee.

Even though technology has changed a lot for traditional transaction methods, such as bank transfers and checks, processing still takes time. Small businesses struggling with cash flow and liquidity may not always afford to wait. RTPs enable the immediate processing of online payments, even on weekends and holidays. RTPs differ from faster payments, although merchants easily confuse the two. Faster transactions mean processing takes shorter than usual, such as same-day payments. However, they are not immediate.

Advantages and Disadvantages of Real-Time Payments

The most obvious advantage of instant transactions is speed. RTP rails that function optimally settle payments instantly. So, merchant accounts, and, consequently, business accounts can receive cash in seconds. With such quick access to funds, you don’t have to worry about cash flow. You can budget and manage your money efficiently.

Because payments are cleared and settled immediately, there is no need to track transactions for confirmation.

RTPs save time, effort, and costs, resulting in more efficient operations. When you don’t have to allocate extra resources to online payments, you can improve the value offered to customers, enabling you to build long-term relationships.

One disadvantage of RTPs is that instantaneous processing leaves no margin for error. Once a transaction goes through, there is no time to correct it in case of a mistake. So, processing requires added caution.

How are Real-Time Payments Implemented in Different Countries?

RTPs are not new. Some countries have been setting up infrastructure to support instant transactions for years. However, the demand for faster processing of online payments rose significantly in the last few years, especially during the pandemic, which saw e-Commerce businesses thrive. As of 2022, more than 70% of the world is working on a real-time payment infrastructure. Banks and bank account settlements are the main participants in most nations. Some, however, non-banking financial institutions and mobile wallet companies are also playing a part. Presently, more than 70 countries across six continents have RTP networks. Japan set up its first RTP network in the 1970s.

Some Examples:

India is the biggest player in the real-time payment ecosystem, with an estimated 48.6 billion transactions. Its Unified Payments Interface, launched in 2016, is growing rapidly and is currently the largest system in volume. UPI incorporates several payment solutions on one platform, simplifying online payments for both consumers and merchants. China comes in second, followed by Thailand, Brazil, and South Korea. The United States has the Clearing House RTP network and FedNow, from the Federal Reserve, which integrates clearing house functionally into payment processing. The system lets banks and financial institutions exchange debit and credit card information. In the UK, the Faster Payments Service, launched in 2008, has more than three dozen participating institutions processing all transactions in real-time. The network also handles recurring payments, future-dated transactions, and bulk payments. The expansion of real-time payments is not in question, as adoption will keep increasing.

What are The Latest Trends in Real-Time Payments?

As RTPs become integral to payment processing, merchants must learn what to expect. A simple user experience and seamless APIs are two elements that will drive the adoption of instant payments. The industry is responding with digitization. Financial institutions are investing in digital infrastructures to meet the rising standards in user experience. In various regions, predominantly Asia and South America, non-card and mobile-initiated transactions are growing exponentially.

Banks that deal with different types of transactions are realizing the limitations of their processing systems. Hence, there has been an increasing demand to consolidate processing on a single platform. The point is to reduce the costs and challenges of managing multiple payment processing solutions.

Despite widespread digitization, cards remain relevant in the RTP ecosystem. Card networks continue to evolve their services to meet new consumer demands, and that ensures debit and credit cards continue to serve a need among users.


Real-time payments offer unique advantages to merchants, billing organizations, and retail banks. Across the world, countries are investing in RTP rails, and the transaction volume has been growing consistently. Therefore, you can be confident that instant payments are here to stay and may, very well, replace legacy online payments.