Cross-Border Options Are Among Factors Driving Real-Time Payments Growth, a Study Finds

A growing volume of cross-border transactions is fueling the development of real-time payment services, according to a new report from Bank of New York Mellon Corp. and research firm Datos Insights.

The report also says businesses stand to lose if they’re slow to invest in real-time payments.

Some 80% of respondents in a survey conducted for the report expect an increase in cross-border payments volume over the next two years, according to a release from New York City-based BNY Mellon. The research canvassed 1,037 employees of mid-size and large corporations in 11 North American, European, and Asia-Pacific countries.

Ninety-two percent of respondents agreed that payments technology will be a significant to somewhat significant area of investment for their organization over the next 24 to 36 months. In other findings, 77% of respondents agreed that real-time payments can help provide a better customer experience, with 54% agreeing that it is better for urgent past-due payments, and 32% stating that real-time payments make cash flow easier and/or safer.

“The study reinforces that the adoption of real-time payment capabilities will continue to increase over the next few years as consumers expect more convenience and accuracy,” Carl Slabicki, co-head of Global Payments, Treasury Services at BNY Mellon, said in a statement. “As more use cases emerge, businesses will need to be more proactive in upgrading their payment rails and working with providers that offer the latest solutions that meet the evolving payment needs of their clients.”

The study from BNY Mellon and Datos Insights (formerly Aite-Novarica) comes less than two months after the Federal Reserve launched its long-anticipated FedNow real-time payments service in the U.S. BNY Mellon said “all major real-time payment rails across North America, Europe, and Asia-Pacific have experienced growth in the last year,” and that the “momentum will not slow down” in the next 24 to 36 months.

The report attributes this growth to a lengthening list of use cases and benefits of real-time payment capabilities, including better cash positioning and reporting, improved working capital, operational efficiencies, greater customer loyalty, strong business partnerships, and more satisfied employees.

“While it is clear that the adoption and use cases are expanding, there remains room for further advocacy and education to drive the shift towards real-time payments,” Erika Baumann, director, Aite-Novarica Commercial Banking and Payments Practice. “This work will be critical over the next few years, as those that fail to act risk losing out on significant market share.”

The study says 55% of businesses in Asia have reported that they have already moved or would change financial-services providers to have access to real-time payments.