Citi Perspectives 2024 Corporates Edition

20 | Services Citi Perspectives While treasury adoption of instant payments may be a more long-term development as scheme value limits rise, instant payments can deliver immediate value- add where payments sit at the intersection of business operations and strategy. Instant payments are more than just a faster payment method — real-time payments can serve as a driver for business growth. On-demand payments create new opportunities On-demand payments are a key use case for instant payments. They fundamentally change how organizations process payments. Traditionally, companies collect payment orders, create batch files, and release those files to a payments provider using an established process and according to a fixed schedule. In contrast, on- demand payments can be individually initiated, triggered by an event or request. This enables the payment to be embedded into an end-user’s experience. The instant payment is integrated into the relevant business process using application programming interface (API) connectivity, which seamlessly links the two processes. On-demand payments can be applicable for a range of industries and sectors, including: • Ride-hailing companies to pay drivers • Food delivery companies to pay restaurants and drivers • Insurance companies for payouts when they accept a claim • Compensation payments for airlines On-demand payments offer a wide range of benefits, including: • Creating an additional revenue stream by charging payees for quicker access to funds • Strengthen supply chain relationships with a more convenient and on demand payment experience • Digitalization of paper-based flows, helping to reduce fraud risk • Full value delivery of funds • Extended availability for payments around the clock • Near instant receipt of funds Working with the right provider By improving cash flowmanagement, enhancing payee satisfaction, and offering a fast and convenient payment option, instant payments have already become an essential tool for many businesses in today’s digital economy. As the use of instant payments continues to grow, companies that embrace this technology will be well-positioned to succeed in the years ahead by evolving their business models to meet their customers’ growing demand for instant experience. However, deploying instant payments effectively can take some care, especially for corporates that operate in multiple markets. In addition to the challenges of managing multiple relationships, corporates must also consider the counterparty risks involved. Corporates should seek to work with providers that can bring together multiple domestic instant payment schemes and cross- border solutions to deliver a seamless end-to-end payment experience wherever, and whenever, corporates operate. While the range of payment providers has increased dramatically in recent years, few have the reach or capabilities to help corporates achieve digital transformation, reduce payment costs and improve relationships with customers, suppliers and other stakeholders on a global scale.