Are You Ready for Faster Payments? 5 Steps to Being Prepared
As new innovations usher in real-time payments in the near future, treasurers should begin to prepare in order to take advantage of promising transaction options. Consumer and business demand for more efficient, faster, and cost-effective approaches to payments will put increased pressure on treasury to rethink how it does business. It’s important for treasurers to assess where they stand today and start thinking about what they can do to ensure they will be able to handle real-time payments when they arrive.
The following are five steps you should consider taking to be prepared:
- Evaluate Your Readiness – Start by performing an overall review of your existing payments processes and resource availability. Then develop a business case for changes you will need in order to take advantage of advances around real-time payments. Early planning is crucial for being able to cash in on real-time payments when they arrive in the U.S.
- Determine How Real-time Payments Will Impact Your Business – Examine how a move to real-time payments will affect your business both locally and internationally. Look at the volume of your payment activity by geographic region to determine what capabilities you require. Align your existing payment processes and schedules to anticipate future demands and capacities.
- Consider Adopting New Technologies and Standards – Adopting market standards, such as ISO 20022, should be an important consideration for any treasury transformation initiative geared toward implementation of real-time payments. Treasury should explore new technologies such as e-invoicing and virtual accounts to increase efficiency and lower payment processing costs.
- Examine the Impact Faster Payments Will Have on Your Liquidity – It’s important to explore the impact that migrating receivables to real-time payments will have on your liquidity planning. How will these changes alter the way you approach working capital management?
- Tap into Valuable Resources for Guidance – Work with a trusted banking advisor to learn about the latest industry developments so you can be in the best position to take full advantage of coming changes.
Real-time payments are in the works and will be here in the near-term. That’s why it’s important to take steps now to be ready to handle new payment innovations. Many of these changes will alter the way treasury does business, so now is the ideal time to begin reviewing your processes and technologies in order to stay competitive.The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank.