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More than 60 percent of businesses said in a recent Citizens Bank survey that they expect to stop using cash or paper check payments in the future, adopting real-time payments instead.
The nationwide survey of 252 corporate decision-makers found that 9 out of 10 business leaders reported an interest in real-time payments, according to Citizens Commercial Banking’s second annual Real-Time Payments Outlook.
“I’m encouraged to see the level of interest in real-time payments because it offers such tremendous advantages to businesses in terms of speed and certainty of payments,” Matt Richardson, head of product solutions at Citizens, said in a statement.
The RTP network from The Clearing House allows customers to make payments electronically and have the funds move instantaneously from one account to another. The transaction includes information about the payment, so recipients know the source of the funds and the reason for the payment.
Citizens is one of several banks that have joined the RTP network, including Hudson-based Avidia Bank, Bank of America, JPMorgan Chase, KeyBank, PNC Bank and TD Bank. The Federal Reserve is building its own real-time payments network, FedNow, expected to launch in 2023 or 2024.
Conducted in June, the Citizens survey included businesses in different sectors with annual revenues ranging from $1 million to more than $100 million. RTP was cited by respondents as one of the most important factors in choosing a banking partner, ranking second behind a bank’s ability to provide solutions throughout their business lifecycle. RTP ranked ahead of both knowledge or expertise in the business’ industry and the lowest-cost financing as determining factors in choosing a bank.
When asked to name the ways in which they anticipated using RTP, 52 percent of respondents cited managing cash flow more accurately, and 46 percent said they would use it to conduct general accounts payable activities. Other uses included payroll (43 percent), facilitating payments requiring immediate receipt (42 percent), improving collection activity and posting to clients’ accounts (40 percent) and replacing check payments (38 percent).
Other findings included:
- 81 percent of respondents expect RTP to dramatically transform the way business is done.
- 77 percent of respondents agree that digital currency will play a valuable role in the future.
- 66 percent of respondents expect that they will stop making or accepting payments with cash or paper checks.
“The pandemic has disrupted many businesses and exposed the downsides to relying on paper payments,” Richardson said. “We will continue to support omni-channel solutions and serve our clients however they need us, but the crisis has demonstrated how resilient and reliable digital payment methods can be and has prompted many businesses to redouble their efforts to digitize their payments.”
