Consumers have been wondering for some time why the U.S. does not already have real-time payments. Consumers expect to have real-time settlements on their payments. So why is it taking so long for the U.S. to make the switch?
In addition to the delay in the implementation of EMV chip cards in the U.S. (while other countries have had this system in place for a decade), the U.S. also lags in its ability to process payments in a timely manner. Other developed markets, such as the United Kingdom, Singapore, Japan, etc, have enjoyed real-time payments for some time.
With Amazon now having the capability of delivering products in New York in less than an hour, many are scratching their heads as to why it takes days for the payments to clear. One reason for this delay is that there is no regulatory mandate forcing this system improvement. Secondly, numerous constituents in the U.S. payments system would all have to come together and make the system ubiquitous.
With companies like Amazon continuously pushing for customer satisfaction coupled with the convenience and ever-advancing technology of smartphones, wearables and tablets, the race is on to improve the U.S. payments system. In fact, the need to accelerate real-time adoption in the U.S. is being seen as increasingly necessary.
The executive of global payments at IBM, Gerard Hergenroeder, and ACI’s Sandra Horn have both shared that the U.K. model is something the U.S. can learn from. Years ago, U.K. banks were incredibly reluctant to adopt the model. However, after seeing the boost these innovative services have given businesses, U.K. banks are now on board.
There is a big advantage that the U.S. has over the U.K.’s situation. The innovative services that have emerged in recent years came after the U.K. had already put their system into place. The U.S., on the other hand, has the advantage that these services can be put into place from the very start. More than that, these services can be given specific targets; such as, business applications.
For now, business are being left with the question, when are real-time payments going to be established? This, coupled with the wait on EMV and the increasing number of cyber attacks, leaves business with a need to find a safe source of credit card processing. Banks are also hesitant to work with any business that is categorized, in their eyes, as being high risk; this categorization includes startups.
An increasingly popular alternative is high risk credit card processing. Alternative lending sources like eMerchantBroker specialize in offering high risk merchants credit card processing. With fraud becoming more and more of a problem, finding a safe solution for card processing can save a lot of headache down the road.