Real-time payments, Crypto and BNPL

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* Originally posted on CUInsight.com

The billing and payments landscape continues to undergo rapid change. During the year 2021, our blog has focused on keeping customers up to date with the latest industry developments and offering our take on future trends. As we close another unconventional year, we’ll revisit a few developments we touched on earlier in the year, including Real-Time Payments (RTP) and Buy Now, Pay Later (BNPL), as well as an overview. of cryptocurrency. and how its increased adoption can impact the billing ecosystem.

Real-time payments and the availability of payment requests continue to expand

We’ve all been watching the evolution of payments modernization, including the increased adoption of Real-Time Payments (RTP) by financial institutions and businesses, as well as Derived Payment Request (RfP).

While the availability of RTP has steadily increased since its deployment by The Clearing House (TCH) in 2017, the global pandemic has intensified calls for modernization of payments with RTP and faster payments. The booming concert economy has also presented a favorable environment for RTP’s growth.

According to a recent report, “The real-time payment capabilities of the RTP network are available to financial institutions that hold 73% of US demand deposit accounts (DDAs), and the network currently reaches 60% of US DDAs.

Meanwhile, the Federal Reserve continues to move forward with its own real-time payments service, FedNowSM, due to launch in 2023.

As a natural complement to RTP, TCH’s Payment Request (RfP) is also gaining popularity as companies realize the benefits of pushing payment requests to be delivered in real time, including higher levels of straight-through processing. , the guarantee of “good funds”, easier reconciliation, faster payment times and lower operating costs.

Buy Now, Pay Later (BNPL) continues to bring Steam together

Buy Now, Pay Later (BNPL) is a fairly new and increasingly popular payment option among consumers with pent-up purchase requests. BNPL offers buyers the possibility of paying for their purchases in several interest-free installments. It is basically a new and improved instant credit option.

Instant store credit options of the past also often offered interest-free purchases for a set period of time, but missed or late payments or non-payment of a purchase in the interest-free period triggered interest rates. sometimes astronomical (and sometimes interest on arrears). BNPL offers all the rewards of an interest-free purchase without the cloud of high interest and penalties hanging over the heads of consumers.

The benefits for consumers are obvious, but what about the benefits for companies offering BNPL? Primarily, a BNPL option can be the deciding factor in a consumer’s final buying decision and can ease the sticker shock associated with more expensive items. But regardless of the size of the purchase, BNPL can provide businesses with a competitive advantage to gain more market share in these uncertain and unexplored economic times. And financial institutions can leverage BNPL as a competitive differentiator by partnering with BNPL providers to deliver premium BNPL payment options to consumers directly linked to their DDA accounts.

Crypto hits sharp adoption curve

We briefly discussed cryptocurrency in the middle of the year, but it’s worth taking another look as its adoption is steadily increasing. With the global pandemic exacerbating an already rapid acceleration towards all-digital, the growing interest of average Americans in crypto is the next natural extension.

A recent study found that “48% of investors nationwide purchased such alternative currencies in the first half of 2021. Younger consumers, in particular, are increasingly intrigued by digital currencies. The report found that 37% of investors aged 18 to 44 who have yet to buy digital currencies are either “very” or “somewhat” interested in doing so. “

What could this mean for merchants and billers? This means that as interest and investment in crypto increases, traders and other billers will need to consider accepting crypto forms of payment – and payment processors will need to consider building an infrastructure to support it. these payments – in order to gain or maintain a competitive advantage.

Crypto is in its infancy as an emerging payment type and its volatility calls into question its mass appeal, but traders, financial institutions and other businesses should closely monitor trends around crypto. to be ready for the future.

Now that you’ve reviewed the trends for 2021, watch the Top Payment Trends to Watch in 2022 webinar.

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without having to undergo major infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or [email protected].

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