US Banks Embracing Real-Time Payments

Oct 27, 2017

The Clearing House is building a system to support real-time payments for the US. As a result, consumers and businesses will be able to send and receive payments instantly, directly from their accounts at financial institutions. Moreover, financial institutions will be able to use data and non-payment messages to build innovative digital commerce solutions.

Real-Time or Faster Payments

Real-time payments are also called instant payments. They’re defined by the Euro Retail Payments Board (ERPB) as electronic retail payment solutions that are available 24/7/365

Real-time payments are a service valued by their customers. This is the service that US customers are after when using instant payment services like PayPal and ApplePay. The Federal Reserve has begun a review of real-time payments and has set a target for their introduction by 2020.

Steve Ledford, SVP products and strategy at The Clearing House (TCH), says real-time payments should cover half the US by the end of 2018. As Ledford notes, The Clearing House will be able to reach everyone. To get to 100%, it may take until 2020. Ledford thinks, by mid-2018, the country will mostly be covered.  Their goal is to reach ubiquity as quickly as they can.

Merchants looking for high risk merchant account instant approval should consider turning to a respectable payment processor and alternative online lender like EMB is voted the nation’s #1 high risk processor that boasts an A+ rating with the BBB. Moreover, EMB is rated A by Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016. EMB provides exceptional payment processing services both for traditional and high risk businesses.

Instant Payments in the US

In the US, regulators, organizations, banks, and customers are increasingly becoming more focused on faster and more efficient real-time payment systems. To fight the competition, banks can’t avoid this shift. They need to enable real–time payments so not to lose a market share to new market entrants. New innovative strategies can provide a basis for a more effective payment system for the years to come.

Thanks to this new payment system, big banks will be able to provide real-time payments, as well as up-to-the minute data analytics that will result in improved customer services, increased revenue and reduced costs. Banks will use the flexibility of digital systems to respond faster to market changes, develop new products more quickly, and apply better systems to fight fraud.

As for smaller banks, they’ll indirectly participate in real-time banking by outsourcing the service to a partner with a suitable payment facility. They’ll need to make some internal adjustments, meaning they’ll need to upgrade their technology and retrain their staff. This will help them send batches of payments 2, 3 times a day or even more often instead of sending 1 batch overnight.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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