The Future of Payments

44 BANKING PERSPECTIVES QUARTER 4 2018 RTP at 1: Sysco T THE INTRODUCTION OF REAL-TIME payments will assist organizations in closing some current gaps. Present electronic payments with strict cutoff times for processing and uncertainty over the exact timing of payment receipt does not meet today’s business needs. This gap in electronic payment offerings has resulted in a continued reliance on physical cash and checks, which are hard to control and have safety issues. Real-time payments let banks and customers process electronic payments at any time, without holiday and weekend blackout periods. Because payments clear within seconds, businesses do not have to guess when the receiving organization will have access to the funds. Here are some situations in which real-time payments could add value. EMERGENCY PAYMENTS CUSTOMER HOLDS Customers may at times exceed their credit limit or terms, resulting in the inability to place additional orders. This issue is especially common with new clients and those expanding their operations quickly, not just customers experiencing financial difficulties. Failure to resolve hold issues in a timely way can have a material impact on clients and future sales. Customers expect their valued business partners will work with themwhile they establish and grow their businesses. As such, clients that can make real-time payments will expect their vendors to have similar capabilities. Customers may be unwilling to tolerate delays in the release of their orders because of a credit-limit hold due to a vendor’s inability to receive real-time payments. Even worse, clients might perceive the company as not up-to-date enough to handle their needs. Having the right payment options can have a dramatic impact on the overall customer experience. PAYROLL Employees are a company’s most valued resource. The public often bases its opinion of organizations on the actions of their workforce. As such, businesses want to make sure workers receive their wages in an accurate and timely fashion. Despite best efforts, compensation mistakes occur. When discrepancies happen, companies attempt to resolve them as quickly as possible. However, traditional payment methods may result in delays of hours or days. One source of delays is that most payroll groups only gather Automated Clearing House (ACH) routing numbers. Although some accounts have the same routing number for both ACH transfers and wire transfers, not all do. As a result, initiating a wire when the same-day ACH deadline has passed usually requires the employee to request the wire routing number from the company’s bank. Real-time payments use the same routing numbers as ACH transfers, making the gathering of a separate routing number unnecessary. Even when payroll processing is accurate, workers may need to receive payments outside of standard payroll processing times in certain circumstances. For instance, California law requires companies to immediately pay an employee all funds owed in the event of involuntary separation. This requirement is not burdensome in planned REAL-TIME PAYMENTS ADDRESS REAL-WORLD PROBLEMS. RTP CLOSES PAYMENT GAPS BY CARRIE REYNA, SYSCO