Intellectual Capital

Strategy behind faster payments

An opportunity to improve business processes

With all the industry excitement about the introduction of faster payments technology in the United States, many financial managers are asking a fair question: What's in it for my business?

The answer may not be obvious. "Faster payments" aren't so much about "paying faster." Rather, adopting emerging technologies can be an important business process optimization strategy for companies seeking a competitive advantage.

Today, companies are working hard to become more nimble in the marketplace, as they face a variety of pressures, including increasing digital business practices, the need to maximize the use of human resources and overall efficiency, and the desire to improve and leverage trading partner relationships. In response, companies are critically analyzing business processes ranging from contract management to hiring to invoicing and beyond.

Payments is a function where process optimization can address a number of the pressures. Beyond traditional Automated Clearing House (ACH) payments and card transactions, today there's a new generation of faster payments technology to help companies tackle many of their process optimization goals.

Same-day ACH credits

Same-day ACH credits are enabling companies to pay urgent invoices to receive goods or services, as well as execute same-day payroll, bonuses, advances, error corrections or last-day-of-work payments, among other uses. Companies are employing this new payment method to improve supplier and employee relationships by responding quickly to these urgent situations.

Same-day ACH debits

With same-day ACH debits, consumers will be able to interact with companies by phone or online to authorize payment of their bills that day. This could be a way to improve the customer experience while reducing the volume of late or overdue payments and the additional effort to resolve such matters.

Zelle®

Another new, faster and digital payment option is Zelle, which offers simplicity and convenience. With a mobile banking app, all you need to deliver money to someone within minutes is their registered mobile number or email address.

Real-Time Payments

The next big thing in faster payments that will support business process optimization efforts in the US is the Real-Time Payments system. Several banks, including BB&T, will be introducing Real-Time Payments in 2018.

Real-Time Payments will enable consumers and businesses to conveniently send and receive immediate funds transfers directly from their accounts at financial institutions, around the clock, 365 days a year. Beneficial process changes that can be realized when the system is used as an integral tool include:

  • Use of APIs (programming interfaces connecting one application to another—within or between companies)
  • 24/7/365 availability for processing payments, monitoring fraud and generating robust reporting
  • Integration of Real-Time Payments transactions with consolidated receivables, including lockbox, wire, ACH, etc., and use of databases to link aliases such as mobile numbers and email addresses to account numbers
  • Improved business recovery processes with Real-Time Payments as a contingency option

To learn how these new faster payment methods can support your business strategy, talk to your BB&T relationship manager or treasury management consultant.

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