Real-Time Payments (RTP) are the quickest, simplest, and most cost-effective ways for merchants to get paid. The cost savings of real-time processing are significant enough that many merchants are paying back their investment in RTP within 90 days or less.
This article will look at what RTP is and why merchants should consider it. We’ll also investigate the cost savings of RTP, and we’ll see how businesses can begin offering this service to help increase sales and expand into new markets.
What are Real-Time Payments?
RTP can send funds from one bank account to another via the internet. In other words, your customer sends you payment instantly from their bank account to yours so that you have immediate access to funds. As soon as they click the send button, you see the money in your account right away.
RTP cuts out processing fees and lengthy hold times while dramatically reducing a merchant’s exposure to fraud and risk. Funds are transferred in near-real-time, so there is no waiting for days or weeks on end to receive your money. To enhance your knowledge, you need to familiarize yourself with how technological trends are changing eCommerce.
Why Merchants Should Consider RTP
There are many reasons why merchants should consider using RTP. Here are some of the most important ones:
The cost savings of real-time processing are significant enough that many merchants are paying back their investment in a few days. It is partly because the processing fees of RTP are much lower than those of credit cards and ACH.
Immediate payment means that your customers cannot stop fees, dispute charges, or request chargebacks for unauthorized transactions. Merchants are also protected from accepting returned merchandise or canceling orders, resulting in high costs and lost sales.
Your merchant account expenses are typically lower with RTP than with credit cards, so you have more money left over for your business needs. The RTP fee is a percentage of the total sale amount rather than a percentage of the sale plus other charges. It can be particularly beneficial for businesses that offer free shipping, which means that you are not forced to pay credit card fees on the shipping cost as well as your mark-up.
RTP is unrestricted by card association rules, so merchants can process international payments without going through a third party. It opens up new markets and opportunities for businesses to expand their customer base. If you’re a merchant and want to edit your CV to help you apply for some RTP platforms, Career Boosters will provide you with the editing services.
How Merchants Can Offer RTP
If you’re interested in offering RTP to your customers, there are a few things you need to do first:
1. Sign up for an RTP-enabled merchant account.
2. Integrate RTP into your checkout process.
3. Train your staff on how to use RTP.
4. Promote RTP to your customers.
Once you’ve set up RTP, it’s easy to use and can be integrated into most shopping carts. You need to provide your customer with the following information:
1. The amount of the transaction.
2. Your business name and address.
3. The payment date.
4. RTP fee, which is a percentage of the transaction total that varies by the merchant account provider.
5. Customer’s bank routing number and account number for immediate payment into your bank account (if different from their bank account)
Your customers will appreciate the convenience and security of real-time payments, so be sure to promote it to them. You can include information about RTP on your website, in your email signature, and on your receipts. In case you need a resume to sign up for an RTP-enabled merchant account, don’t hesitate to contact Resume Planet for help.
Critical Considerations for merchants implementing RTP
While RTP can be very beneficial for merchants, there are a few drawbacks to consider before implementing it on your website.
1. Availability of Funds. Availability of funds is one of the most important things you need to keep in mind when accepting RTP payments. The money might not become available until the next business day or later, so make sure that you have enough cash on hand to cover your expenses in the meantime.
2. Customer Service. Since RTP payments are immediate, it’s essential to have a good customer service policy in place if there are any transactions. It would be best if you were prepared to handle chargebacks, disputes, and other issues that may come up. You will need to ensure that your customer service department is well-trained and can resolve any problems as quickly as possible.
3. Fraudulent Transactions. There is a greater risk of fraudulent transactions with RTP because the money is automatically sent from the customer’s bank account to yours. It would help if you did everything you could to monitor your transactions and detect any suspicious activity.
4. Chargebacks. Since RTP payments are not processed through the card associations, there is no mechanism for filing a chargeback on an unauthorized transaction. It’s important to implement another method of dispute resolution if you plan to offer RTP as one of your payment methods.
Cost-savings of RTP
RTP can be an excellent tool for businesses to lower their merchant account processing fees, and it offers cost savings with regular credit cards. It is particularly beneficial for companies that offer free shipping and want to avoid paying processing fees on the shipping cost and mark-up.
If you’re looking for a way to lower your processing fees, RTP is something to consider. Talk to your merchant account provider about setting it up and see how much you could save.
Real-time Payments Vs. faster Payments
The most crucial difference between RTP and faster payments is that there is no risk of chargeback with RTP. RTP transactions are carried out directly from the customer’s bank account to your business account, so you don’t need to worry about unauthorized or fraudulent transactions.
With faster payments, you will need to provide a method of dispute resolution in case of any problems with the transaction. It could be a process managed by the card associations or your merchant account provider.
Faster payments are also not as widely available as RTP, so you may have difficulty implementing them on your website.
Key Players in the RTP Space
Several companies are offering RTP services to merchants, including:
Schwab Bank Invest & Pay. Schwab Bank Invest and Pay is a real-time payment service that you can set up quickly. Your customers only need the account number and routing number for their checking or savings accounts, and they can make payments directly from their bank account.
ACH Clearing House. The ACH Clearing House is a payment processing company that offers a real-time payment service for businesses. They provide several benefits, including an online payment gateway, RTP, and faster payments.
Google Wallet. Google Wallet is a mobile payment solution that allows customers to make payments using their smartphones. It’s available as an app for Android and iPhone devices and you can use it to make payments at retail locations, online, and within apps. Businesses can use premium website monetization services to process Google Wallet payments.
Apple Pay. Apple Pay is a mobile payment solution available on the iPhone 6 and newer models. It allows customers to make payments using their fingerprints or a passcode. Payments can be made in-store, in online transactions, and within mobile shopping carts.
Technology Providers in the RTP Space
Some of the companies in the RTP space are technology providers who offer payment solutions in addition to their processing services. These include:
First Data. First Data offers payment processing services, including real-time payments for e-commerce solutions, mobile transactions, and traditional POS systems. They also offer special pricing for high-volume merchants.
Braintree. Braintree is a payment processing company that PayPal acquired in 2013. They offer different payment processing solutions, including real-time payments for e-commerce and mobile transactions.
PayPal. PayPal is one of the most well-known online payment processing spaces. They offer several payment processing solutions, including real-time payments for e-commerce and mobile transactions.
B2B use cases for Real-Time Payments
Real-time payments are an excellent option for B2B transactions, especially in cases where there is a high volume of transactions or a time sensitivity to the payments.
Suppliers. If you frequently make payments to suppliers and vendors, real-time payments could be an ideal solution because it allows your business to pay multiple invoices at once quickly.
Employees. If you need to send regular payments to employees, real-time payments can make the process easier and faster. Employees can receive their payments as soon as they are processed, which eliminates the need to wait for a check or wire transfer.
Customers. Some customers may prefer to pay using real-time payments because it allows them to receive immediate confirmation that their payment has been processed. It can be helpful for customers who are making a purchase online or for businesses that need to invoice their customers quickly.
Future of RTP
It’s expected that the use of real-time payments will continue to grow in the coming years. It is especially true as more businesses move to a digital-first model and as more consumers become comfortable making mobile payments.
If you’re looking for a way to offer your customers an immediate payment solution, RTP may be the best option. It’s easy to set up for customers because it requires just a bank account number to get started.
RTP is a fast and efficient payment option that allows businesses of all sizes to make payments quickly. It can benefit new customers who want an immediate solution or existing customers who need fast access to their payments.
Eun Rockwell is a blogger and academic writer at a top UK CV writer firm. She likes trying new subjects and is always focused on proving her worth in new and challenging writing areas. Her hobbies are reading books and traveling.