Introduction
With the advent of technology, tasks have become simpler and faster. People expect this speed and ease in every aspect of their daily lives, including payments. Earlier, transactions were made either in cash or through net banking. However, online transaction modes used to take a bit longer to complete.
Enter real-time payments (RTPs). In a world where speed and connectivity define our digital landscape, real-time payments have come across as a game-changer in the finance sector and taken center stage. Research reveals a direct link between GDP and real-time payments growth. Countries embracing instant transactions experience a 1.6-2.4% GDP boost.
This article will discuss the growth of real-time payments and how they are actually boosting economic growth and financial inclusion in 2024.
What are Real-Time Payments
Real-time payments can also be understood as instant payments, where once a transaction is made, it is instantly reflected in the accounts of both the sender as well as the receiver. However, it is to be kept in mind that not all types of real-time payments are instant. Some are near instant, while some payment methods show immediate effects. The term instant holds importance in the manner where transactions used to take around three days in olden times, compared to a couple of minutes or even seconds in recent times. Real-time payments were launched by The Clearing House, a membership organization owned by major US banks, in 2017.
How RTPs Boost Economic Growth and Financial Inclusion
When it comes to considering the benefits of RTPs in boosting economic growth and financial inclusion, this belief can be solidified through the following points:
RTPs make financial services more accessible to those living in remote or underserved areas, as people can make transactions through their mobiles via mobile-based RTPs, such as UPI (Unified Payments Interface).
RTPs can stimulate economic activity, foster entrepreneurship, and drive business growth. This can further help boost tax collection.
RTPs improve market efficiency by providing instant and seamless transactions between parties in seconds. These instant transactions help businesses use the received funds and thus effectively use their cash flows.
RTPs provide greater liquidity since nominal to no amount is left circulating in the system. Rather, it is immediately transferred between the respective parties. Since there is no locked-up money in the financial system, it boosts competition among businesses.
RTPs even help those living away from their families. They help provide efficient remittances, allowing migrants to reach their families as soon as possible in real time.
All the pros mentioned above show how real-time payments are boosting economic growth and financial inclusion for the better.
Conclusion
Real-time payments make transactions much easier and swift, and they give the financial system the boost it never knew it needed. However, since real-time payments mean near-instant transactions, it is important you stay vigilant and transfer funds to the correct account. Omnipayments stands at the forefront of empowering the next generation of payment systems. We provide flexible and cost effective payment software for payment processing. The beauty is that you can use its features as a customizable payment software to match your requirements.
Schedule a call with us today to learn more about how we can streamline your business’s financial operations.
