Cash & Liquidity ManagementPaymentsElectronic/MobileReal-time payment adoption set to take off

Real-time payment adoption set to take off

Latest payments barometer highlights how businesses and treasury teams need to be thinking creatively about payment technology in order to master user experience and data insight.

The latest edition of an annual Business Payments Barometer has revealed that one in three businesses plan to adopt real-time payments in the year ahead – a trend that will very much impact treasurers.

According to Bottomline’s fourth annual Business Payments Barometer, the payments sector is we’re seeing digitisation place pressure on technology companies and banks to adjust their solutions to suit a faster, dynamic, more competitive, and open environment. Eleven years after its initial launch, the adoption of Faster Payments appears to be on the up with this year’s report indicating that the majority of financial decision makers predict their business will be processing payments in real-time by 2020.

In a move which mirrors the increased consumer demand for faster payments, 37% of financial decision makers say their businesses plan to adopt real-time payments within the next 12 months. In addition to the existing 53% who have already adopted the technology, this indicates 90% of those surveyed are set to implement real-time payments by the end of 2020.

“Real-time payments bring heightened visibility and efficiency to the payments landscape and will be especially impactful for businesses looking to improve their cash flow and have their debts settled more quickly,” said Nigel Savory, Managing Director, Europe, Bottomline Technologies. “Given that the technology has been in place since 2008, companies have begun to expect the same payment experience they are accustomed to as consumers.”

Mobile first?

The survey of financial decision makers asked what will impact business payments in 2019, and for the first time, mobile payment technologies topped the list. Innovation in payment technology has been on the radar since the start of the Payments Barometer in 2016 but the higher ranking this year confirms an important trend.

“The industry is heading in an increasingly ‘mobile first’ direction,” says Ed Adshead-Grant, General Manager of Payments, Bottomline Technologies. “The rise in importance demonstrates a recognition among financial decision makers that the time has come to fully embrace mobile payment technologies.

“This is an opinion shared by regulators. Major initiatives in UK payments, such as Open Banking/ Payment Service Directive II (PSD2) and the UK’s New Payments Architecture (NPA) have been designed to make it easier for businesses and consumers to use tablets and smartphones to manage multi-bank payments and cash more efficiently. Organisations will need to have a strategy for mobile or lose competitiveness.”

Up their game

Speaking about the adoption of mobile payments within business at an event to launch the report, Louise Beaumont, Adviser and Co-Chair of Open Banking & Payments Working Group said it’s time for larger corporates to really up their game around mobile payments.

“It’s really weird to me that we must separate our consumer and work lives,” she commented. “The consumer side is fully up-to-date in 2019, but suddenly, the corporate side of you has got to be back in the 1970s!

“If you look at start-ups, of course they’re using a challenger bank and utilising mobile payments. There’s no thought that you would have to be at a desk to make a business-related decision. That’s a complete anathema to them. As we become more familiar with this in our consumer life, we’re seeing it in our business life.

“As a result, I’m expecting larger businesses and corporates to be able to make decisions at an appropriate moment. Not by, where do I happen to be? The furniture around me should be an irrelevance to the decisions you’re making.”

Omnichannel approach

Another speaker at the event, Huw Davies, CEO and Founder of Frontfoot & Commercial API Director at Open Banking, suggested that corporates should be looking to include mobile in an omnichannel approach to payments and treasury management.

“I don’t know if I’ll necessarily jump on the mobile first train. I think it’s more of an omnichannel approach that’s needed,” he said. “We often hear from people running or managing businesses, that some of the time the mobile is the right time to use a device – at other times you want machine to machine action taking place, based on rules they’ve created.”

Davies adds that business departments, including treasury, can improve their processes by learning from the consumer world.

“I absolutely agree that there’s an awful lot that can be taken from the consumer world. And I think there’s two really important aspects to that, which define winners in the space. One is mastery of user experience. And that isn’t just mobile. Again, it might be mobile, it might be laptop, it might be around presenting the right rule sets that businesses can agree so it just happens invisibly in the background. That’s mastery of user experience, and then there’s mastery of data. In this world, there’s more data, which means more insight. It’s the utilisation of that data and the presentation of it in the right way, on the right device, at the right time to help take the right action.

“The best financial experience I have right now in my life is actually in running my businesses. Not my personal account. That’s because the bank has done a great job on the user experience. So yes, there’s a lot that can be learned from consumers. And yes, mobile is important, but it’s not the whole story.”

Clarity needed on payments regulations

While the utilisation of mobile and an omnichannel approach to financial management is clearly gathering momentum, the Bottomline Business Payments Barometer did highlight how regulations are holding back developments.

Indeed, many respondents said they don’t fully understand the increasing number of payments regulations that have been introduced in the past two years. For example, the majority of respondents feel unprepared for upcoming regulation and are unaware of the benefits of initiatives such as Open Banking (54%), New Payments Architecture (51%) and ISO20022 (52%).

Such a scenario means many businesses risk missing out on the opportunities that new regulations can provide. Specifically regarding Open Banking, only 17% of financial decision makers cite their preparedness to embrace the new model.

“Open Banking has the potential to free up time previously spent on back office activity. For example, small businesses can easily gain access to their different banking transactions, balances and history through trusted organisations – whether that’s a financial institution of choice or an approved Payment Service Provider (PSP),” said Savory. “Those yet to embrace the new model could potentially risk falling behind the frontrunners when it comes creating efficiencies within their own organisation or offering new value-add services to their customers.

Business Payments Barometer can be downloaded here.

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