When FIS announced the debut of its RealNet offering, it was the latest signal from the payments industry that real-time account-to-account (A2A) payments are positioned for faster growth among businesses.
RealNet takes a “network of networks” approach to enabling businesses to move money more efficiently, automatically identifying the fastest and most cost-effective way for businesses to make payments, depending on the context of the transaction. With support for Same-Day ACH and RTP, as well as standard ACH and wires, RealNet offers flexibility and choice in how businesses deploy faster payment capabilities.
The introduction of RealNet comes at a time when enterprises are looking for ways to eliminate friction from functions like accounts receivable (AR) and accounts payable (AP).
One of the most compelling benefits of RealNet is that it offers businesses another option for making real-time payments, without tying them into a single payment rail or method. This can be an important strategy in promoting the adoption of real-time rails in areas like AP and AR.
“It’s a next step, and another piece of the puzzle that’s needed to really take advantage of RTP when you start looking at holistic solutions for AP and AR beyond treasury,” said Bloh.
Financial institutions (FIs) are investing in real-time payment capabilities. Their challenge will be to uncover how to leverage those investments beyond the typical back-office treasury management use case, Bloh said. Some businesses might balk at paying more than traditional ACH just to make faster payments. “There has to be an additional value proposition that goes with the payment itself,” he added.
Unlocking the Incentive
That incentive is the rich data that can travel with the transaction, Bloh said. This is especially valuable for corporate finance professionals in areas like AP and AR, with that data offering support for spend analytics, automated reconciliation and other insights. “The value lies in better aligning data and dollars in a connected environment,” he noted.
For banks and third-party service providers, the challenge then becomes understanding not only how to loop businesses into real-time payment services, but also how to integrate that transaction data into their ERPs and other back-office systems.
Industries with high volumes of B2B transactions, like the healthcare space, can see particularly large value from such capabilities, Bloh noted. While such sectors remain slow to modernize and embrace real-time payments, solutions that can connect into these real-time data flows can inject a high degree of automation and visibility that can be invaluable to organizations drowning in transaction workflows.
“Healthcare is similar to many B2B segments that have been slower to adopt real-time payments,” Bloh said. “The desire is definitely there – it’s just about getting plugged into the infrastructure and making it happen.”
With corporate awareness of real-time payments on the rise, adoption will see a steady increase over the coming years, especially as more real-time payments infrastructures, such as the Federal Reserve’s FedNow service, become available. Financial service providers’ ability to help businesses gain access to those systems – either directly or via their banking partners – will undoubtedly play an important role in driving traction.
Yet with more payment methods looking to displace the paper check in AP and AR flows, the competition is heavy – and corporates could find themselves overwhelmed and unsure of how to navigate their choices.
This is where financial services and FinTechs must take measures to support payment rail optimization and derive even greater value from real-time services, beyond speed. As Transcard moves to loop more banks into its multi-rail payment platform, expanding support for new payment rails remains an important focus – and connectivity into RealNet remains on the company’s roadmap, Bloh said.
“RealNet and other real-time payment options will improve the speed and control of B2B payments. But the greatest value for businesses and their banks is having rich data flow with the payment,” Bloh said. “When a business can connect its systems to facilitate the fast exchange of payments and related data, it can achieve greater efficiency, eliminate unnecessary complexity, bring down payment and data silos, and mitigate potential risks.”