Renowned business author Ken Blanchard noted the importance of collaboration in “The One Minute Manager.” That quote speaks volumes for banks interested in joining a real-time payment network. As the trend of real-time payments has swept over the world, it has repeatedly shown success, and with success comes another surge in participation. Everyone from banks to fintechs to merchants are looking to capitalize on the potential revenue from being part of a real-time payment network. The dilemma for those looking to join a network is where to start. Like most trends that hit the payments industry, there is a large learning curve, particularly for the development teams required to connect the bank to the RTP network.
Here’s where we return to Ken Blanchard’s quote: banks won’t know everything they need to know as they start this process, and that’s okay–there are experienced companies that can help. It’s in a banks best interest to find a partner to help guide them through the process, gaining speed to market and education along the way.
Euronet recently partnered with Forrester on research with 325 payments executives worldwide, half that had already joined an RTP network, and half that are planning to join one soon. Three points were abundantly clear after the study:
- Banks want to participate in an RTP network.
- Banks feel unprepared.
- Banks that enlisted a payments solution provider to help were happier than those that did not.
Following the momentum of real-time payments around the world, eighty percent (80%) of the executives listed “Faster Payments” as their customers’ current top expectation. This finding was no surprise as real-time payments were the hottest trend in payments before the global pandemic. Since the pandemic started, contactless payment options have become a requirement to ensure safety while conducting business. The need for contactless has created a sense of urgency by consumers, even in countries where there isn’t a formalized RTP network.
As a result, banks that might have been hesitant to adopt RTP must get on board. The same is true for countries without an RTP network in place. The past year has sparked immense interest in RTP as a contactless payment option and plans for new networks are quickly spreading.
While most executives know their customers are demanding real-time payments, many existing RTP networks are waiting for banks and merchants to join. According to the study, many executives attribute the slow adoption to three things:
- Integration to an RTP network is too difficult.
- Banks are currently short-staffed.
- Lack the necessary skills to develop the RTP connection.
The good news is that all three of these primary concerns can be remedied through a partnership with a payment solution provider. Creating the connection to an RTP network can be difficult. Most banks have a legacy payments solution in place, and these typically use ISO 8583. Nearly all the RTP networks utilize ISO 20022, and this can be a non-starter for a bank with little to no experience in that message type. For a bank to properly integrate a legacy solution to a modern RTP network, there must be a translation layer to handle the two message types used on either side of the transaction. Using a ready-made offering from a partner that sits between the bank and RTP clearinghouse can seamlessly route and translate RTP transactions, reducing the bank’s legacy system burden.
Another benefit of partnering is that the expertise found at a payment solution provider can make up for the bank’s staff’s experience and staffing gaps. Having a partner with experience in building complex payments solutions, specifically for participation in an RTP network, can greatly reduce time to market.
In an industry that is becoming increasingly “digital-first,” the ability to offer real-time payment solutions is crucial in establishing market share. Our independently commissioned research showed that bank executives that outsourced the development of their RTP connection were more satisfied with the experience than those who chose to devise their own RTP connection.
If you have found yourself struggling with connecting to an RTP network or are just getting started and are looking for a partner to minimize risk and greatly speed up your time to market, please consider Euronet and our latest offering, REN Connect. Just remember, none of us is smarter than all of us. Let us work with you to develop the connection that best meets your needs, today and tomorrow.