Real-time payments are here to stay. However, connecting to a real-time payment network can be difficult. Financial institutions need flexible architecture that allows ease of integration through a low-code, drag-and-drop interface.

To learn more about the state of real-time payments and how financial institutions can prepare, PaymentsJournal sat down with Matt Nilles, Senior Director of Global Products and Solutions at Euronet Worldwide, and Sarah Grotta, Director of Debit and Alternative Products Advisory Service at Mercator Advisory Group.

Real-time payment networks have grown in Europe and Asia, and the U.S., along with many other parts of the world, is starting to catch up. “We’ve seen it grow – really, quadruple – from about 15 networks five years ago to approaching 70 today,” said Nilles. Africa and Latin America are also implementing real-time rails, and the U.S. is looking forward to the launch of FedNow in 2023.

Financial institutions have also been investing in faster payments, both among big banks and smaller FIs who see payments as a real differentiator. “A Faster Payments Council report that came out fairly recently said the vast majority – over 80% – of financial institutions in the U.S. have some form of a faster payments solution,” Grotta noted.

Change is difficult, and the move to RTP is no exception. Nilles pointed out four potential pain points regarding the onset of real-time payments:

Even if FIs don’t feel ready for RTP implementation right now, or are perhaps saying that their customers aren’t asking for this kind of change, the fact is that real-time payments are just around the corner. “Once it is widely available, that means that [customers are] going to be looking to their financial institution for that capability as well,” Grotta predicted. Therefore, it behooves financial institutions to start preparing now.

Familiarity with ISO 20022 will be the top priority. “We’re seeing it become more prevalent around the world,” Nilles explained, “and most of these networks, well in advance of going live, are releasing the specs around the messaging.” Building requirements for development teams to prepare their tech stack for RTP solutions will be paramount, as well as using APIs or direct access to allow solution providers room to help.

FIs and fintechs can also differentiate themselves with digital overlay services. “What you need to do is find that right mix that’s going to really meld with your customer base and start to separate you from the competition,” clarified Nilles. “At the end of the day, it’s all about customer experience.” Ultimately, a seamless and high-value RTP experience will strengthen the relationship between bank and customer. Even if the transition does not happen in one fell swoop, each new use case is opportunity for new and positive inroads.

REN Connect, a product from Euronet, helps FIs and fintechs join real-time payments networks quickly and easily, along with easing the burden of network integration with existing back-office systems. “REN is an enterprise-level payments platform where we can address real-time payments from a number of different directions for our clients,” said Nilles.

REN offers four key services:

At bottom, Euronet can help find the best mix for each particular institution looking to join each particular RTP network. “We really handle everything from the connection to the message translation, to the monetization of the real-time payment rails, through those overlay services also,” Nilles concluded. No matter how you slice it, real-time payments are coming, and with the help of Euronet, FIs and fintechs can rest assured that they will be ready.

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