Navigating cash and treasury: 1. Get ready for real-time payments

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August 19, 2021By Byron Byrd

Today, financial services organizations are more focused on what’s necessary to safeguard business continuity and solvency. Much of this begins with greater visibility and reliability of key data to help drive your critical business decisions, especially during critical market changes.

Whether you call it faster payments, immediate payments, instant payments, or fast money, real-time payments technology has gained a solid foothold in the payment processing world.

Additionally, to satisfy both operational and regulatory requirements, you need operating models for cash and liquidity management. To successfully achieve and maintain this capability organizations need to focus on gaining greater visibility into their cash and liquidity.

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Cash and treasury: Prepare for instant payments and build true cash visibility

We have compiled a blog series that will focus on cash and treasury best practices you can follow to prepare for significant changes with instant payments and build true cash visibility. This week, we focus on the first consideration: understanding the impact of instant payments.

Consideration #1: Understanding the impact of instant payments

As new payment innovations come online from around the world, treasurers should deepen their understanding of the impact of these faster, instant payments. Treasurers might be wondering: How are these different instant payment transactions processed?

According to the US Federal Reserve, treasurers might also be asking: “What do payers, payees, and their financial services providers need to do to make these kinds of payments; and why is now the right time to consider adopting some type of faster payment option?”

The journey towards faster payments can progress along a path towards full instant payment adoption. Consider the following.

Explore the world of faster payments

  • Know what’s trending in the world of faster and instant payments
  • Know the different types of faster payments—central bank offerings (Lynx, FedNow, etc.) and commercial rail providers
  • Understand how faster payments benefit your organization

Take a deeper dive

  • Look further into how instant payments impact your organization
  • Evaluate peer-to-peer (P2P) impact for financial institutions
  • Explore the details of countries and commercial rail offerings (Lynx, FedNow, etc.)
  • Understand the clearing and settlement impact

Embark on transformation

  • What systems, people, and processes must change to support 24/7/365 successful operations?
  • Decide how you will deliver on ISO 20022
  • Consider how to expand fraud prevention
  • Devise ways to Remove constrictions to speed
  • Establish a ready-by date and work towards it

Are you ready for instant payments?

Banks and other entities are being urged by global regulatory agencies to educate and ready themselves for the impending payment changes. Whether it is Pay.UK, Payments Canada, or the Federal Reserve, they’re each encouraging financial institutions, fintech firms, and businesses to prepare to leverage and capitalize on the benefits of instant payments. The Federal Reserve in the US has recently launched web content, an education series, and a short overview video that offer information and guidance.

Next week, we’ll look at how best-in-class companies generate cash positioning.

If you would like to discover more about instant payments and related topics, we invite you to download this eBook on how to prepare for instant payments and build true cash visibility.

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