Instant payments (also referred to as real-time or immediate payment schemes) come in many different forms. Typically, however, they share a few common characteristics: they offer (near) real-time crediting of a payee’s account (usually meaning under a minute), they operate 24/7/365, and when successful, are final and irrevocable.
For consumers, small businesses and retailers, a shift to ‘instant’ could not come sooner. The faster a payment can be made, the faster working capital and credit becomes available – in turn allowing further revenue to be generated. In contrast, for large corporates, seeking predictability and managing liquidity around daily cut-off times, the draw of instant payments is perhaps less obvious. Many treasurers remain apprehensive about instant payments – some even question the point, “What use is it to me as a treasurer if I can now receive €500 at 02.00am as opposed to 09:00am?”
However, with the world of commerce moving towards an increasingly instant environment, corporates must prepare themselves. Writing in Flow Magazine, Deutsche Bank’s Jose Buey, Regional Head of CMC Client Product Solutions, EMEA, and Paul Cuddihy, Director of Working Capital Advisory, explore the challenges and opportunities of instant payments for corporates. How will instant payments impact back-office operations, sale opportunities and supply chain relationships? What about fraud – do faster payments mean faster fraud?
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