Back to Blog
Real-time payments are changing how businesses handle money by allowing transfers to happen almost instantly. Facilitated by services like the RTP network and FedNow, real-time payments are popular because they offer speed and convenience that traditional payment methods like regular ACH, paper checks and even some credit cards can’t match. Real-time transactions are processed quickly, providing a smooth experience for both you and your customers. This speed can have a significant impact on your business’s cash flow and efficiency.
By saying yes to real-time payments, you can improve customer service and streamline your own business operations. Reports share that “overall, 86% of businesses and 74% of consumers said they used faster or instant payments in 2023, and most (74% of businesses and 79% of consumers) reported looking to their financial institutions to provide these services.”
Better Cash Flow And Daily Operations
Real-time payments offer faster access to funds, giving startups the liquidity they need to run their businesses efficiently. As an entrepreneur myself, I’ve seen firsthand how delayed payments can disrupt cash flow, creating significant hurdles in meeting financial obligations. From struggling to pay suppliers on time to facing challenges in meeting payroll, the impact of delayed payments can be daunting. However, with real-time payments, these concerns are greatly reduced.
For startups, this means they can keep things running smoothly with fewer hiccups. When you can access your earnings right away, it’s much easier to pay everyone you owe, whether it’s your suppliers or your employees. This boost in cash flow isn’t just convenient—it also makes your business more stable financially. According to the Federal Reserve studies cited above, 48% of businesses are using faster or instant payments because it helps them reduce costs.
Improved Customer Experience
Again, when you switch to real-time payments, you’re giving your customers a smoother experience from start to finish. No more waiting around for days wondering if their payments went through—transactions happen almost instantly. This speedy process leaves customers feeling happy about how easy and convenient it is to do business with you. And when customers are happy, they’re more likely to come back for more and tell their friends about you, which can lead to even more growth. Lots of businesses are making the switch to faster payments because it gives them the freedom to pay and get paid the way their customers prefer (39%), and because they love the convenience of being able to do transactions anytime, day or night (35%).
More Financial Control
Imagine you’re running a software-as-a-service (SaaS) company that sells subscription-based software. With real-time payment tracking, you can instantly see when customers pay their subscription fees or when you have to pay your vendor bills. For example, if lots of new customers sign up all at once, you can make sure you have enough staff to help them get started without stretching your resources too thin.
And if you notice that it’s costing you more to keep your software running smoothly because more people are using it, you can quickly figure out ways to either make it cost less or bring in more money. I think having this level of financial visibility in real time is invaluable. Keeping an eye on your finances in real time helps you make sure you’re not spending too much and that you’re making enough to keep your business going strong.
Lower Fraud Risk
Many real-time payment systems come equipped with advanced security features that help protect your business from fraud and chargebacks. These systems often include real-time transaction monitoring and authentication processes that can identify and flag suspicious activities quickly. By minimizing the risk of fraud, your business can avoid financial losses and maintain a trustworthy reputation with customers.
The future of real-time payments looks promising, especially for startups. As technology keeps improving, real-time payments will become even more common in everyday business activities. Modern payment platforms that offer real-time payments can be a big plus for you.
By including real-time payments in your business strategy, you can gain a competitive advantage through better cash flow, higher customer satisfaction and more financial control. Staying on top of the latest trends and technologies is key to using these advancements effectively. Make real-time payments a core part of your strategy and watch your startup thrive.
Originally published on Forbes.
