COVID-19 may be this decade’s black swan and a major disruptor of the global economy. The world has been reeling under the impact of pandemic over the last nine months. Many businesses have shut down (some for good); some have furloughed employees and slashed salaries while the remaining employees continue to experience increased anxiety on the impact that the still rising infections (in many parts of the world) could have on their jobs.
Business communities are re-imagining their operations with many figuring out more digitised ways to operate, especially how to balance staying in business while protecting themselves and their stakeholders. Social interactions have been upturned and are expected to continue until a vaccine is developed or a cure is found.
Why Real-Time Payments?
COVID-19 is changing how people live, work, buy and make payments. While consumer spending is down around the world, people are gravitating toward digital channels, products, and services across categories. This may explain why the biggest winners during COVID-19 have combined digitised operations and preparedness to achieve unexpected growth, with industries as varied as Communications services, IT, Consumer discretionary, and healthcare. What connects Amazon, Microsoft, Apple, Tencent, and Zoom? Their focus on digitised payments.
In a recent report “How the COVID-19 crisis may affect electronic payments in Africa”, McKinsey flagged cash as a possible conduit for the spread of the coronavirus and asserted that digital payments in Africa, would provide safer, cashless payments to facilitate physical distancing during the pandemic but also, in the longer term, result in a shift toward financial inclusion, which could help get economies back on track more quickly after the crisis.
Unfortunately, for payments in Africa and across the world, it is not yet Uhuru.
While online merchants and consumers expect online buying and selling to be easy, efficient, and safe, every transaction is typically fraught with complex automated processes. Providers are under pressure to provide peer-to-peer payments beyond traditional banking models, and to facilitate a cashless society that can enable any purchase, even mechanical transactions such as parking meters or vending machines. These demands create technical challenges for merchants, processors, and users up and down the transaction path including fraud and chargebacks, slow, inefficient, and expensive cross-border payments, card data security, multi-currency and payment method hurdles, among others.
Fortunately, there is an increased interest and demand for digital payment services, especially real-time payments. Real-time payments combine speed, data and communication in order to execute a payment in seconds, granting users immediate access to their funds and instant confirmation of their transaction while providing instantaneous settlement. Real-time payments through dedicated, secure and convenient payment gateways deliver immediacy while empowering businesses with the ability to seamlessly settle payments in an increasingly digital world.
The promise of real-time payments triggered a demand that dates back to the rise of “instant” technology, where billions of people now have access to information and experiences on-the-go available in various touch-points and channels. Consumers want the same real-time experience from payment services that they enjoy from a proliferation of smart devices and the instant digitised access to information they provide.
Several countries have already begun experimenting with real-time payments: Australia launched a domestic New Payments Platform (NPP) in 2018 which offered always-on, “near real-time” payments, consumer-friendly aliases (e.g. email, smartphone number) rather than bank account numbers and richer payment data. But it was not the first. Korea (CD/ATM), UK (Faster Payments), Mexico (SPEI), and Singapore (FAST/G3) were early adopters of so-called “Immediate Payments” domestic payment platforms.
The role of blockchain technology in real-time payments
The opportunities for widespread real-time payments lie in blockchain and digital asset technology, which can be leveraged as a crucial component for speeding up the settlement process. Blockchain technologies allow businesses and financial institutions to transact directly, eliminating the need for middlemen and providing specific financial services — like secure payments.
Blockchain can help redefine financial services such as payments, securities, clearance and settlements, loans and credits among others. This capability for digital, real-time payment is particularly useful for banks and financial institutions now, during COVID-19, to reduce unforeseen and unpredictable pain points from the pandemic and be well-positioned as innovators and leaders beyond this current crisis. Banks and financial institutions who want to remain ahead of the curve will profoundly improve liquidity, boost efficiency, lower costs and prevent fraud with real-time payments.
Leveraging blockchain technology to significantly reduce transaction costs while settling transactions in seconds, Fliqpay’s goal is to enable businesses, fintechs, and financial institutions operating in Africa and all over the world to transact internationally through multi-currency & digital currencies support in real-time.
Businesses wanting to integrate faster payments into their existing offerings can take advantage of Fliqpay’s cross-border payments solutions built to help meet the increasing demand for real-time payments. Fliqpay is safe, secure and licensed by the Financial Transactions and Reports Analysis Centre of Canada.