Decades ago, the only type of instant payment available was the exchange of cash. If money needed to be sent across the country, the only available options were wire transfers or checks. This process could take days or even weeks. In today’s high speed, instant gratification world, instant payments are a necessity, and they must be digital, reliable and secure. To respond to this need, instant payments tools and technology have exploded in recent years.
The proliferation of instant payments are driven by both businesses and consumers. According to a survey of small businesses, 92% of companies with physical locations said they accepted contactless payments1. Further, 74% of consumers said they used a P2P (peer-to-peer) instant payment service in 2021, up from 67% two years ago 2. As a result, an instant payments strategy should be considered for businesses of all sizes.
The business benefits of instant payments include:
- Liquidity management – instant payments can reduce uncertainty from payment delays and boost working capital
- Customer and supplier satisfaction –immediate and frictionless payments enhances the purchase process, responding to the desire for speed and convenience on the part of customers and suppliers
- Faster payments to employees and gig workers – businesses that enable employees and gig workers to receive money on an as-earned basis could differentiate themselves in a tight labor market.
There are many types of instant payment solutions readily available, but not all of them have the same functionality. See our white paper on Instant Payments for a list of solutions available and how to select the one that’s a perfect fit for your business.
1. Mercator Advisory Group. U.S. Small Business Payments Insights (2019 and 2021).
2. Mercator Advisory Group. U.S. North American Payments Insights (2020 and 2021).