The desire for timely payments is nothing new. Imagine receiving your monthly salary several days late, or being unable to pay for goods in the store while you wait for a payment to process.
Checks, which take days to clear, have largely become redundant, replaced by faster payments. Digital wallets, tap and pay mobile payments, and, most recently, cryptocurrency transactions, have become popular at least partially because of the speed of their transactions. And speed isn’t just important to consumers.
Both the payer and the payee enjoy improved cash flow, and they benefit from the trust that builds up between parties when payments clear instantly or quickly.
Instant Payments
From ecommerce to modern banking, consumers not only want but have learned to expect instant payments. Ecommerce is popular because of its convenience, but it wouldn’t be as popular if payments took several days to complete before goods could be sent. Digital games and online casinos are also expected to accept and send instant payments.
CasinoBeats explains instant withdrawal casinos and how they work, and gambling expert Matt Bastock explains that while cryptocurrency and eWallets can be used to send and receive payments in a matter of minutes, traditional payment options, including credit card and bank transfers, can still take upwards of 2 or 3 working days.
Despite the fact that most people have access to these traditional methods, players choose alternative methods because of their privacy and security, but primarily because of the speed at which transactions are completed. This isn’t unique to iGaming, either. More and more people are using these modern payment technologies to pay for online goods. Cryptocurrency is hardly a simple or convenient payment method, but it has become very popular in recent years.
Improved Cashflow
Cash flow is the movement of money into and out of an account or accounts belonging to a single entity. The term is generally used in conjunction with business and commercial finance, but it can equally apply to personal finance.
Having transactions complete in an hour, rather than three days, may not mean that an individual receives more money, but it means that people have greater control over their finances. This can be especially important for people who send and receive a lot of payments, and especially as most people now use multiple payment methods and have several accounts. Even with a single digital wallet, if you have two or three outgoing payments and one or two incoming payments, it can be difficult to keep track of which have cleared and which haven’t without keeping detailed records. This can lead to confusion, and it can even lead to missed payments or missed opportunities.
With instant payments, the money is transferred immediately. It leaves the sender’s account within seconds and arrives in the recipient’s account almost straight away. Both parties know exactly where they stand. They know that the money in their account is there to spend, and they know where any other money has gone.
Better Money Management
Not being able to accurately track money and not having immediate access to money that is yours can also increase the risks of missed payments and other financial problems.
With multiple transactions still processing, many people are effectively left guessing whether they have the funds to pay for something or not. This can mean rejecting purchases for fear of not having the funds available or, potentially worse still, it can mean essential payments get missed.
With instant payments, account balances accurately reflect the amount of money a person or business has, and make it easier to effectively manage funds.
Instant Gratification
Instant gratification is the tendency to choose something that offers an instant reward, even if that reward is less than you would receive if you waited a little longer. Payments and finance are a good example.
People buy non-essential items, and while they don’t necessarily need the items the next day, they will often pay an extra few dollars to enjoy next-day delivery. Or they will pay an annual subscription to guarantee quicker delivery from a certain online retailer. The desire for instant gratification is actually natural, although it affects some people more than others.
And, psychologists say that once you do something that offers instant gratification, neural pathways are rewired and remapped so the brain expects and desires that same instant gratification in the future. That’s one of the reasons fast food can be addictive and why it becomes habit-forming to enjoy your drive-thru burger every Tuesday night. For those people who seek out instant gratification, instant payments tend to lead to the quicker receipt of goods or services after payment, and this is highly appealing.
Enhanced Trust
Whether you’re looking at the sending or receipt of transactions, there is a large degree of trust required from both parties. The recipient has to trust that the sender is indeed sending money, while the sender has to trust that the recipient will accept and acknowledge the money before providing the goods or services required in exchange.
When payments take several days, this trust is tested. With each passing day, the recipient becomes increasingly likely to believe the sender has failed to send the money. And the sender may start to believe that the recipient has, in fact, received the money but not taken the necessary next steps. Instant payments remove these doubts.
Money leaves the sender’s account immediately and is received in the recipient’s account in a matter of minutes. The transaction can generally be completed while the two parties are still in contact, and neither is left in any doubt regarding the payment or the next steps.
Benefits To Businesses
Of course, it isn’t just consumers who benefit from instant transactions. Businesses also benefit. They receive payment sooner, enabling them to use the money to pay for business needs or to ensure the fulfilment of an order.
Trust is not only built for the sender, because money is evident in their account or goods and services are sent sooner, but the business also develops a sense of trust for their customer. And, whereas delayed payments may mean businesses having to take risks in sending products or providing services before payments have cleared, this isn’t necessary when the payment instantly hits the business’s account.
There’s also a financial benefit to the business. Not only can the business put the money to use immediately, but they can benefit from interest or other returns sooner than if they are forced to wait a week for the cash.
Conclusion
Finance is an important part of any business transaction, and the speed of transactions is also important to consumers and customers. Instant payments reduce friction points between parties, enhancing trust and providing reliable cash flow for both parties.
Fortunately, modern fintech and payment methods include payment methods like digital wallets and cryptocurrency, both of which can complete transactions in a matter of seconds, compared to the days it takes for traditional payments to complete.
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