Why COVID-19 is a Kick-Starter for Instant Payment Methods
The fastest way to determine the weak points in a system is to put it under extreme stress.
COVID-19, one of the greatest stresses in recent memory, showed that early adoption of financial technologies can help strengthen economies and leave businesses in a stronger and more agile position to navigate through crises. Instant payments are an ideal solution to cope with the weak points of traditional payment methods during and beyond COVID-19.
Businesses which had adopted instant payment methods before the pandemic were in a much stronger position to reinvent their model to keep afloat. This shift is enabled by the nature of instant payment infrastructure. For instance, at the start of the pandemic, the digital foundation of instant payments allowed their users to rapidly tailor services to accommodate the changing landscape, allowing them to focus on refining other aspects of their business. This provides a head-start against comparison to competition who don’t have instant payment options, providing a competitive advantage by ensuring that one’s business adapts faster. Furthermore, instant payment methods are easier, more streamlined, and cheaper than other forms of payments such as cheques, making instant payments a beneficial addition to any business.
In a benefit unique not only to these times, instant payments also provide an additional blanket of safety and security due to their contactless attributes. Paper money can be a powerful vector in transmitting COVID due to it’s transactional nature. Money can be passed through many hands in a short period of time, having the potential to dramatically increase infection rates. Furthermore, consumers are less and less likely to opt for cash methods of payments amidst a rise in accessibility for cashless payment options.
Instant payments also provide a wealth of information on which to base financial management decisions. Digital, real-time payments can constantly monitor transaction data, and therefore allow companies to make more accurate predictions of their liquidity. Thus allowing them to decrease the size of their liquidity buffers and consequently reinvest that money into future growth.
Finally, instant payments enable companies to spend less on payment inefficiencies. While cheques may have taken up infrastructure and effort in processing, switching to real-time payments translates to savings on raw framework and staff.
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