Real-time payments and the convergence of artificial intelligence in transaction processing

The next payment revolution has begun with the introduction of Real-Time Payment (RTP) systems. A RTP system provides instantaneous payment processing and transaction confirmation in near real-time manner. More than 88 countries have or are planning on developing RTP networks to provide their residents – both consumer and businesses – with entirely new payment capabilities such as pay-anyone from anywhere, no cut-off timings, and granularity and immediacy of payments. The arrival of RTP systems presents great opportunities and challenges for payment players. Fintechs need to immediately adapt their product roadmap to include RTP services. Payment schemes, gateways, and processors need to evolve their tech stack to perform instant routing, processing, and settlement of payments. Since any bank, fintech, wallet provider, or business could leverage RTP, consumer expectations on past “good enough” products are changing. Standards of the North American payment ecosystem were influenced by batch settlement systems like ACH and clearing houses, but today’s consumers expect the features of a retail payments product to match the easy, on-demand expectations set by tech giants like Google, Pay Apple, and Tencent .

Surprisingly, commercial RTP systems are now widely deployed across Asia and Europe. Applying any new tech stack to RTP is a demanding task in itself. The introduction of RTP is amplifying the consequences of piling on new technologies. Implementing an RTP system for a fintech is like playing 3D chess, and every new piece that is added complicates the game and the potential moves. Here, a new payment system in development in North America serves as an example to illustrate what is to come for RTP in one of the last places RTP is still being developed . The primary focus is on the impact RT payments and technology will have on payments that have already launched in competitive markets. This includes competitive, operational, and consumer impacts. Additionally, this focus area and others are discussed with the expectation that if RTP is not on the radar of individuals presently in the North American payment ecosystem, it will be soon.