payment-systems-banner

Perspectives

Real-time payments systems are changing the reality of payments

Generating new consumer behaviors and spending patterns

​The mass adoption of real-time payment systems around the globe has contributed to an environment in which many consumers, merchants, and financial institutions expect to be able to pay friends and customers, settle bills, and transfer money at the drop of a hat. This new standard is driving change for traditional payment types—checks, credit, debit, prepaid, and the like—as consumers have generally come to expect faster settlement periods, notifications and consolidated reporting. Learn how real-time payment systems could completely affect the way consumers, merchants, and financial institutions transact and conduct business.

Why cash may be a thing of the past

Ever since money was invented in the 7th century BC, the exchange of paper, metal, and other forms of hard currency has generally been the most convenient way to pay in real-time for every day purchases. Even with the introduction of checks and credit cards, cash is still used to conveniently exchange funds in an immediate fashion. However, the ease of use of cash has also faced several challenges. For instance, cash is an expansive instrument, requiring printing storage, circulation logistics and costs, making it difficult to store and transport. Moreover, many transactions no longer occur in person, which require other methods of payment. Cash can also incur costs, such as check-cashing and ATM fees. According to the European Central Bank, the total cost of cash in the European Union is 1 percent or more of GDP. Similarly, the cost to support cash in the US is $200 billion annually. The growing ubiquity of smart devices and booming online retail commerce in markets outside of the US is driving the rapid adoption of real-time payments. Increasingly, demanding consumers may be turning to their smartphones when they need to pay merchants, billers, peers and others. While the private sector has typically driven adoption to promote commerce, governments tend to lag behind; yet increased usage of real time payments could help them increase tax collection and enhance fraud prevention.

​The tipping point for real-time payments

​Getting started

Real-time payments are likely to completely affect the way we transact and conduct business. When that time comes, consumers could enjoy the convenience of paying their bills at the last minute without penalties. Businesses could benefit from increased availability of funds. Financial institutions could be able to provide better services. Economies around the globe could be more fluid than ever before. While challenges remain to reaching this utopian future state, we predict that real-time payments will likely generate new consumer behaviors and spending patterns, thus increasing revenue for the payment players who are well-positioned to capitalize on this evolution. So what are you waiting for?

Download the PDF

​Contacts

If you have questions regarding this report, please contact any of the following Deloitte Consulting LLP professionals:

Did you find this useful?