Digital Payments: Banks Have Started Relying on Real Time Payments (RTP)

digital payments

We haven’t witnessed any drastic changes in banking areas except for payments in the last few years. Banks in Europe and developed countries are shifting from old legacy paradigm to digital or online payments.

These days, banks are catering with multiple challenges for overcoming the legacy system for payments processing. Also, banks want a system where customer journey remains frictionless and secure. Retaining customers is a big challenge too, as they have other fintech solutions.

Open Banking

Open banking is revolutionizing the financial service sector. Also generating new opportunities for payment service providers (PSPs). Open API ecosystems for banks and PSPs are enabling them to offer more end-user friendly services digitally.

One of the core benefits for consumers from open banking is the control over finances and banking data. Royal Bank of Scotland is seeking the open banking technology to enable customers pay directly through their accounts online for products and services.  The consumer doesn’t need debit or credit card for that matter. Balance is user’s account gets updated in real time, thus he can better manage his finances.

Another fine example is of Erste Bank Hungary (EBH), which is utilizing the universal online payments solution. This means, a customer can access his account’s balance in real time anywhere and via any banking channel 24/7.

Future of Payments

“Banks must build flexible use cases around businesses of all priorities. New payment architectures should leverage APIs and microservices as in delivering the foundation for future products and services”, shared by the Ovum report which is prepared by Geneva based banking company.

“Microservices will allow the creation of new curated services and have the potential to create new products currently in existence,” the report says further.

 “The rate of change in the payments world is greater than at any time in the past few decades – we are in the middle of a collision between two worlds where the old batch processes are being replaced by real-time systems,” said by David Watson, head of digital cash products at Deutsche Bank.

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