The Rise of Real-Time Payments: Enhancing Lender Competitiveness and Borrower Experience

“What if your borrowers could receive loan funds within seconds of approval, no matter the time of day?” Real-time payments (RTP) offer this exact value proposition, redefining how lenders engage with their borrowers. RTP refers to electronic payments initiated, cleared, and settled within seconds, ensuring that funds are available immediately and 24/7. This rapid and efficient transaction process meets borrower expectations and positions lenders as innovative leaders in an increasingly competitive financial landscape.

Here’s how RTP benefits both lenders and borrowers:

1. Improved Cash Flow and Faster Settlement

RTP enables loan disbursement within seconds, operating 24/7/365, allowing lenders to fund loans immediately, reducing settlement delays. This results in improved cash flow and reduced operational bottlenecks.

2. Enhanced Borrower Satisfaction with Instant Funds

Borrowers no longer wait for funds availability. RTP empowers lenders to transfer funds instantly, providing borrowers quick access to emergency or time-sensitive financing. This significantly boosts borrower satisfaction and trust, creating long-term loyalty.

3. Business Benefits for Lenders

• Better Loan Repayment Cycles: Using the same bank account for funding and repayments reduces friction in the loan process, ensuring seamless repayments.
• Increased Competitiveness: By adopting RTP, lenders differentiate themselves with faster services and a better customer experience.
• Cost Savings and Predictability: RTP reduces manual interventions in payment processes, streamlining operations and cutting costs. Fixed per-transaction pricing provides financial predictability.

4. Industry Adoption and Growth

The Clearing House’s RTP network now reaches all federally insured U.S. depository institutions and covers a large portion of U.S. demand deposit accounts (DDAs). In Q2 2024, the network processed 82 million transactions totaling $55 billion, showing 7% volume growth and a 30% increase in transaction value compared to the previous quarter. The rapid adoption of RTP reflects a broad market shift toward instant payments.

5. Seamless Integration with Loan Management Systems (LMS)

Payliance’s RTP solution integrates easily with Loan Management Systems (LMS), ensuring a seamless borrower experience and streamlined operations for lenders. By integrating RTP into their LMS, lenders can automate loan disbursements and repayments in real time, eliminating manual processes and reducing errors. This also allows lenders to offer faster, more efficient loan funding without requiring significant infrastructure changes. With minimal development required, Payliance ensures lenders can be operational with RTP quickly, providing a robust, automated payment processing solution within their LMS.

6. Responding to Market Demand for Instant Payments

As consumer demand for instant financial solutions grows, RTP helps lenders stay ahead of industry trends, meeting borrower expectations for real-time financial services and gaining a competitive edge over slower, traditional payment methods.

Conclusion

Real-time payments are transforming the lending space by providing instant access to funds, improving cash flow, and enhancing borrower satisfaction. Lenders that integrate RTP benefit from faster processes, cost savings, and a more competitive service offering. As the RTP network continues to expand, Payliance offers a seamless integration solution to help lenders stay ahead of the curve.

For more information on how Payliance can help you integrate RTP, download the Solution Brief here. To book a consultation to discuss the advantages for your lending organization, click here.