Real-time payments are growing rapidly in the UK, signifying potential for business payments for banks and FinTechs, according to the Emerging Payments Association (EPA).

The trade association published original research on how consumer expectations have drastically changed over a short period of time – with delays to fund movement or clearance no longer tolerated.

The spike in demand for real-time payments was sparked by the implementation of the second Payment Services Directive (PSD2) and Open Banking in 2018. Intended to be a catalyst for innovation in the financial industry, the regulation has impacted consumer behaviour and attitude towards slower payment processes.

Mark McMurtrie, EPA ambassador and report author, commented: “Real-time is the new normal for payments procession – customers expect it, while regulators encourage the adoption and competition demands that instant payment options are provided.”

The report suggested that the move towards real-time payments can be beneficial to businesses, since additional data can improve insight into customer behaviour, allowing for instant rewards and personalised offers.

However, it also warned that faster processing times create more opportunities for criminals to exploit businesses – “more investment must therefore be made to enhance fraud protection”.

The EPA also highlighted that the amount of innovation a financial institution can deliver is severely hampered by the growing number of regulations that have to be completed, tying up financial and employee resources and management bandwidth. This means that there is still a way to go before demand for real-time payments can be met as commonplace.

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