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What are real-time payments?

In the not-too-distant past, if you wanted to transfer money to another bank account, you had to wait several days for everything to be finalised. In 2008, the Faster Payments system was introduced and several days became just a couple of hours.

But peer-to-peer transfers aren’t the only things that have undergone a revolution in recent years. We’ve witnessed a comparable movement in the eCommerce space.

Real-time payments utilise a similarly direct approach.

Traditionally, eCommerce payments involve multiple parties, including the customer, the card issuer, the customer’s bank, the merchant, and the merchant’s bank.

Real-time payments cut out the intermediaries and deliver rapid payments.

Continue reading for more information around  real-time payments and other eCommerce and business banking solutions, check out the following guide and learn about:

  • The benefits of real-time payments
  • How real-time payments work
  • How cross-border payments work
  • Why real-time payments are so popular
  • How to use real-time processing with Pixxles

How do real-time payments work?

Real-time payments are processed in seconds, but they still undergo payment authorisation and verification checks, thus reducing the risk of fraud.

The process looks something like this:

  1. The payment is initiated by the customer/client.
  2. The payment is authorised, confirming that it was actually processed by the account holder.
  3. A message is sent to a secure network to confirm its legitimacy.
  4. The network receives the message and confirms if it is genuine.
  5. The payment is either approved (and processed) or rejected (and denied).

If you’re processing real-time payments via Pixxles, the final step will be proceeded by a payment notification. This will appear on the Virtual Terminal, moments after it has been processed.

Apply for a Pixxles account today and discover how real-time payments can help your business.

Benefits of real-time payments

Both customers and merchants can benefit from real-time payments:

  • Fraud prevention: Secure payment networks utilise a variety of anti-fraud measures. Not only do these measures protect consumers, but they also mitigate the risk for merchants. After all,  greater fraud protection measures mean fewer complications and chargebacks.
  • Better money management: A bank account can include multiple pending transactions at any given time, making for a confusing picture if you’re trying to clearly understand what’s happening in your account. With real-time payments, everything is instant, including the clarification you get regarding sent and received payments.
  • Faster payments: Everyone can benefit from the rapidity of real-time payments. We’re living in a digital age where consumers demand convenience and speed at every turn. These payments can meet those needs in a way that traditional options can’t.
  • Easy implementation: The best payment solutions can be integrated seamlessly into existing infrastructure. Such is the case with Pixxles, which works with a number of existing platforms and can be customised as much as needed.

What is driving real-time payments growth?

The eCommerce sector owes everything to the non-stop innovation of fintech pioneers. It’s hard to imagine so many customers shopping online if those payments weren’t as quick, hassle-free, and easy as they are.

But there’s much more behind this digital payment revolution than speed and simplicity, including:

A reliance on digital payments

The COVID-19 pandemic accelerated the growth of the eCommerce sector. Necessity is the mother of invention, and when customers couldn’t get to the high street, they wanted the high street to come to them.

Even though the world has since opened up again, the digitisation of our society means online payments are more important than ever.

A demand for convenience

Customers don’t want to wait for payments to process for the same reason they don’t want to wait 30 seconds for a site to load. They demand rapidity and convenience—which is why payments and payment processing needs to be as fast as possible.

Payment systems that are easier and faster are always going to have more appeal for a society keen on convenience.

Rapid innovation

Technology is advancing at an exciting pace and it’s creating a lot of unique opportunities for innovative developers and brands. Everyone wants to create the next big thing, and that need has accelerated the growth and prevalence of real-time payments.

Easy access to preferred payment solutions

If you put a faster and simpler payment option in front of consumers, they will use it. Modern consumers are not afraid of change and are willing to embrace whatever innovations come their way.

How can Pixxles help with real-time processing

Pixxles is a leading payment processor service that gives brands complete control over their finances. Your customers benefit from rapid and secure transfers, and you can utilise real-time reporting and complete transparency. 

Here are just a few of the reasons to consider Pixxles:

  • Transparent pricing: You will only pay for what you need. You will never be charged for what you don’t need or use. Regardless of how big you are or how many payments you process, Pixxles can work and grow with you.
  • No hidden fees: We don’t hit you with hidden setup fees, payment fees, and other charges. If it’s not clearly stated when you order, you won’t pay for it.
  • Cross-border payments: Our payment solutions accept over 100 currencies, giving you access to the global marketplace. Wherever you do business, Pixxles can help you to take payments quickly and securely.
  • Currency exchanges: With a single low fee charged for all currency exchanges, we’ll ensure you get the best rates every time.
  • Solutions for all: There are implementations to suit all websites and business types, regardless of what you sell, where you are, or how big you are.

For more information around working with Pixxles, contact us today.

FAQs around real-time processing

What is a real-time payment system?

A real-time payment system is a fast and secure payment system that provides real-time updates for the merchant. It accelerates a process that can be very slow, and it does this without sacrificing security.

How are real-time payments settled?

Real-time payments are authorised and verified by the RTP network, making sure they come from the account holder and there are no red flags.

How long does it take for real-time payments to settle?

These payments are usually processed in just a few seconds. Both parties are notified as soon as the payment clears.

Do real-time payments have time and date restrictions?

One of the benefits of using these payments over traditional bank transfers is that there are no strict business hours or days. Real-time payments can be processed 24/7 and 365 days a year.

What are payment rails?

You will often hear the term “payment rails” used in reference to real-time payments. A “rail” in this context is simply a platform or network on which the payment travels.

Can real-time payments be used to send cross-border payments?

Yes, the necessary payment infrastructure exists in most countries, so real-time payments are possible around the world. With Pixxles, you can also accept payments in over 100 currencies, giving you true access to the global marketplace.

What are open-loop and closed-loop systems?

Real-time payment and banking solutions are known as “open-loop”. It means that money is taken directly from the user’s account and that account can be used to purchase from a variety of vendors. A “closed-loop”, on the other hand, is one that is restricted to a specific provider or type, such as a prepaid card.