The 6 Benefits of Real-Time Payments for You and Your Clients

Introducing the world of real-time payments, where speed, efficiency, and cost-effectiveness revolutionize business transactions. With instant processing and minimal fees, real-time payments offer seamless experiences in B2B transactions.

It's no surprise that real-time payments (RTP) are gaining traction, particularly when cash, check, and credit payments are becoming less and less popular every year. According to the Federal Reserve Bank of San Francisco, cash and credit payments declined between 2019 and 2021.

Each traditional payment method has its downfalls, including slow processing times and high transaction fees. Meanwhile, an RTP transaction is an almost instant payment with fewer fees. And with the boom in online retail commerce, smart devices and AR automation, the benefits of real-time payments are proving to be the more thoughtful way forward.

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B2B real-time payments are growing exponentially. It's estimated that by 2025 as many as half of B2B payments will be made in real-time. Even the Federal Reserve is interested in digital payments and RTP transactions, as it has developed its own payment system called FedNow.

But are instant payments all they are cracked up to be? Or is it just hype?

Here are six of the most significant benefits of real-time payments that both B2B service providers and their customers will appreciate.

Improved Cash Flow

In a PYMNTS study, 24% of businesses receiving RTA transactions said improved cash flow is a top benefit of this payment method. And it's easy to see why.

Having a steady stream of cash on hand is crucial for every business. But even during good times, slow and pending transactions tie up your necessary capital and make it difficult to get a detailed view of your finances. During the pandemic, 76% of small businesses said they had cash flow shortages, and 50% had to dip into personal savings.

It makes sense that faster payment can ease cash flow tension and reduce bottlenecks. Instant payment services, like an RTP network, can help you get your money faster than ever.

Process Simplification

Not all payment methods are created equal. B2B Payments are annoying, time-intensive, and costly to process. An RTP network streamlines the payment process, cutting costs and steps while preserving anti-fraud and transparency measures. As a result, businesses can say goodbye to costly fees and unnecessary paperwork with real-time payments. When the payment is rapidly reconciled, you can focus on more essential aspects of your business.

Improved Cash Positioning

Along with improving your cash flow, real-time payments help improve your business's cash position. Potential investors, partners, and acquiring businesses generally see cash position as a powerful signal of financial strength. Cash positioning shows that your company has the capital flexibility to make investments when they arise or protect against losses if they occur. A financially strong company has the cash to cover all pending expenses and liabilities. A faster payment system can create confidence that your business has a solid financial core and can weather any storm.

Better Liquidity Management

Liquidity management plans to meet your short-term cash obligations and all liabilities and cover all expenses. Real-time payments give you efficient liquidity management, ensuring you have the cash to pay your bills, even during uncertain or challenging times.

If your company is over-leveraged or close to being over-leveraged, having a payment stuck in processing can become more than a minor annoyance. As an instant payment option, an RTP transaction makes tracking your money and getting it into your bank account easier before bills are due.

Improved Business Relationships

When a vendor makes a payment, it's a waiting game to see if the payment clears, especially if mutual trust has yet to be developed. Real-time payments remove that waiting time and immediately inform you when payments are processed. This efficient process eliminates any doubt you might have while waiting for your business partner's payment.

At the same time, an easy and transparent payment process can improve vendor confidence. After all, their accounts payable department is busy, too. And as one of the fastest payment options out there, offering real-time payments can

Eliminate Unnecessary Costs

Business transactions come with attendant costs that lower the value of additional transactions. Real-time payments can reduce or eliminate these unnecessary cash flow leaks, allowing businesses to retain more revenue.

At Paystand, we process any size payment at any frequency, free of additional processing fees. This helps companies make payments as required without exhaustive processing costs and spending resources on low-value tasks.

Tapping into B2B Real-Time Payments

Using the Paystand Bank Network, Paystand provides companies with a fast, easy, and cost-effective way to transition their B2B payments to a real-time payment option. Rather than being tied up in processing fees and times, Paystand allows your organization to receive payments instantly, as often as you want, at any volume, and with no additional fees.

Paystand can also help you digitize and automate your entire cash cycle because we understand that B2B payments are more than just a single transaction. We have the tools to help you finally digitize your receivables so your entire process can be moved to the cloud. This can help you speed up time-to-cash and decrease DSO by up to 60%.

We're changing how payments are processed. Learn how you can automate your AR Automation and gain peace of mind.