What’s the cost for anytime banking?

Time is arguably the greatest commodity businesses and individuals have. The always-on lifestyle that consumers now enjoy has increased significantly since the lifting of restrictions in the UK. Thankfully, life is returning to a sense of normality across the country and with it, UK consumers want to maximise their time doing things they love. With this increased spending has come an exponential rise in frictionless payments and fast banking practices. 

In March, UK Finance announced that contactless payments in the UK rose by more than 30% since the introduction of a £100 payment limit. And, if buy now, pay later (BNPL) trends are accurate, by next year the market share of these services is expected to double, already growing at a rate of 39%. Late last year, around Black Friday and Cyber Monday, it was reported more than 17 million UK consumers turned to BNPL services to indulge in commodities immediately and take advantage of the seasonal deals.  

These frictionless experiences are pushing the innovation of retailers to new heights. However, with this easy access to money and immediacy to items, there are associated dangers for both businesses and consumers alike. 

Faster payments must be balanced with front and back integration 

Payments are now near-instant, with Faster Payments recently announcing transfers of up to £1 million are now possible. For this to be successful, however, it is vital that both the front and back payment processes are integrated completely. A disconnect at any stage of the process could cause irrevocable issues for both the consumer and the business.  

On one hand, if a consumer pays for an item and the money isn’t successfully taken from their account, they may continue to spend in the understanding they have the finances to accommodate their desires. Then, inadvertently, they may go into an unanticipated overdraft. If this is an overdraft that has not been pre-arranged with their bank, this can lead to significant financial penalties and interest payments  

This is also dangerous territory for businesses. Failing to have a clear picture of what is entering into the business in terms of capital can lead to misguided business decisions or misquoted financial records. Both factors can result in detrimental outcomes for the company. Business leaders may make unsound decisions that could cripple the long-term growth and future of the business. Likewise, financial regulators can implement financial penalties due to mismanagement and these penalties may have a knock-on effect on the company’s customers, with a rise in prices required to counteract the fines received. 

With BNPL tools on the rise, these issues are exacerbated. When payments are staggered across a period of time, financial controllers within companies have their work cut out to ensure they have an accurate picture of accrued and actual cash they hold as a business. Mistakes at this stage can lead to a business not being able to pay its debts, as the money they expect is yet to enter into its books. 

Cloud implementation and automation provides the solution 

Fortunately, there is a solution. By implementing the latest payment technology, such as AI, automation and digital assistance, and by moving to the cloud, companies can feel assured that they’re accurately taking and tracking income in real-time.  

For instance, AI and automation give financial controllers greater usability and efficiency, while reducing the chances of human error as core processes are automated and AI can assist users on the next steps. Likewise, AI and automation solutions can deliver real-time insights and optimise processes across payables, receivables and supplier management. Whether customers pay with debit cards, credit cards, Apple Pay or even BNPL, these technologies can enable financial controllers to stay on top of the ever-growing complexity of finance. Likewise, by transitioning to the cloud, financial institutions can ensure these complex applications, which require high-performance and low latency, are able to operate seamlessly and can easily be scaled alongside any company growth that may take place.  

By implementing the latest payment technologies into the business, and moving away from legacy infrastructure, financial teams can centralise payments across a global network. They can also reduce the costs of running this global network by streamlining processes such as validation, aggregation, formatting and secure transmission of payments to other financial institutions and payment services.