Real-time payments (RTP) are being touted as the future of finance. Fintechs are building around them. Banks are promoting them. Regulators are encouraging them. But here’s the question treasury professionals need to ask: Are real-time payments really necessary—or even useful—for treasury operations, or are we chasing a trend that solves problems we don’t have?
The Case for Real-Time Payments in Treasury
- Faster Liquidity Management
- Real-time payments enable instant movement of funds, helping companies react faster to liquidity needs, cover urgent cash shortfalls, or make just-in-time payments.
- Improved Vendor and Customer Relationships
- Faster settlements can support supply chain relationships, speed up order fulfillment, and improve customer satisfaction.
- 24/7 Treasury Capabilities
- Real-time payments are available outside of banking hours, which can be critical for global operations that span time zones.
- Reduced Operational Risk
- The ability to move funds immediately helps avoid late penalties, overdrafts, or failed settlement risks in critical transactions.
The Case Against Real-Time Payments in Treasury
- Most Treasury Payments Aren’t Urgent
- Payroll, tax, intercompany, and supplier payments are generally scheduled in advance. The majority of treasury-related transactions don’t require real-time speed.
- Liquidity Visibility, Not Speed, Is the Issue
- Treasurers often need better forecasting and visibility—not faster settlement. Speed doesn’t fix poor insight into cash positions.
- Higher Costs and Complex Implementation
- Real-time rails can come with higher transaction fees and the need for tech upgrades, APIs, and 24/7 operational readiness.
- Process Risk Increases
- With payments going out instantly, there’s less time to review, approve, or recall transactions. That raises fraud and error risk.
A Practical View: Real-Time Where It Adds Value
Rather than jumping on the RTP bandwagon for everything, treasury teams can:
- Use RTP selectively for urgent payments, crisis response, or just-in-time liquidity movements.
- Improve forecasting and visibility to optimize payment timing instead of relying on speed.
- Balance cost and value by evaluating where real-time payments actually create efficiency.
Let’s Discuss
- Is your treasury using real-time payments? If so, where do they add the most value?
- Are RTPs a strategic enabler—or an overhyped feature with limited treasury relevance?
- How do you balance the promise of speed with the need for control and cost-efficiency?
We’ll be gathering insights from treasury leaders and payments experts to hear where real-time fits—and where it doesn’t. Join the conversation and share your view!
Comments
Richardo Schuh, Treasury Masterminds board member, comments:
I’ve seen firsthand how real-time payments have made a real difference—especially here in Brazil and across Latin America.
Since the launch of PIX in 2020, treasury teams have gained a new level of speed and efficiency. The cost of an instant PIX transfer? A fraction of traditional methods (and way cheaper than some legacy wires that still feel like they’re being sent by carrier pigeon 🕊).
From an operational perspective, instant payments have been a game changer, enabling order releases 24/7, improving cash flow agility, and solving edge cases (judicial or regulatory-related payments, for example) that used to be a nightmare under the old systems.
Sure, not every treasury transaction needs to be real-time—but when speed does matter, having the rails makes all the difference.
Let’s just say… we don’t miss the old banking hours.
Royston Da Costa, Treasury Masterminds board member, comments:
The role of real-time data in treasury decision-making
Pros:
1. Better Risk Management
Market Volatility: Real-time FX, interest rates, and commodity price data allow treasurers to react immediately to market fluctuations.
Counterparty Risk: Continuous monitoring of counterparties’ credit ratings and financial health helps mitigate potential exposure.
2. Liquidity Optimization
Cash Positioning: Instant visibility of global cash balances enables more efficient cash pooling, sweeping, and funding decisions.
Intraday Liquidity Management: Banks charge based on intraday usage—real-time insights allow treasurers to optimize cash deployment.
3. Faster Decision-Making
Automated Hedging: With real-time data, treasury teams can automate FX and interest rate hedging to lock in optimal rates.
Dynamic Forecasting: Real-time cash flow and collections data improve the accuracy of short-term forecasts.
4. Fraud Prevention & Compliance
Payment Monitoring: Real-time tracking of payments helps detect anomalies and prevent fraud.
Regulatory Compliance: Many jurisdictions require real-time transaction reporting for transparency.
5. Cost Efficiency
Optimized Borrowing & Investing: Real-time access to short-term borrowing rates or investment opportunities ensures the best return on idle cash.
Reduced Operational Costs: Automated processes reduce manual interventions and errors.
Cons:
1. Data Overload & Noise
Too Much Information: Real-time data streams can create excessive noise, making it difficult to focus on critical risks.
False Alarms: Frequent updates may lead to overreaction to minor fluctuations rather than strategic decision-making.
2. Integration & System Complexity
Compatibility Issues: Legacy systems may not support real-time data processing, requiring costly upgrades.
Multiple Data Sources: Consolidating real-time data from banks, trading platforms, and internal ERPs can be challenging.
3. Cost Considerations
Infrastructure Costs: Maintaining real-time treasury requires investment in technology, connectivity, and cybersecurity.
Transaction Fees: Some banks charge for real-time payment and liquidity updates, increasing costs.
4. Operational Challenges
Resource Dependency: Continuous monitoring requires skilled personnel to interpret data and take swift action.
System Downtime & Latency: Even a minor delay in data feeds can impact decision-making in volatile markets.
5. Behavioral & Strategic Risks
Short-Term Focus: Real-time visibility might push treasurers toward short-term fixes rather than strategic risk mitigation.
Alexander Ilkun, Treasury Masterminds board member, comments:
My take on Instant Payment is that these are solving a problem that doesn’t exist in the Treasury space for the most part.
There are some very specific circumstances where instant payments may be useful and that are not connected to operational efficiency within Treasury – for example, M&A transactions. In these circumstances urgency is substantiated and is valid.
However, so many of the other circumstances are either outside of the Treasury’s domain or are related to operational inefficiencies. A few examples. Treasury doesn’t play a part in vendor relationships for the most part – that is something Procurement and AP teams should handle and make sure the invoices are paid as they are due, not earlier, not later. If, as a Treasury Cash Manager, you’re about to miss your settlement, be it interest payment, principal, derivative, or spot settlement, you rarely find out about this kind of a transaction at the last minute. The list can go on, but the key consideration is that all of these occasions are known and should be planned for so as not to occur at the last minute. If they do, the process needs to be improved.
Another nail in the coffin of instant payments would be their cost. Are Treasurers really prepared to pay the premium for the privilege of making an instant payment? I doubt so – when we can, we will select the most cost-efficient method of making a payment. The increased costs can come from multiple sources. One could be setting up and maintaining the infrastructure to make it all work. Another could be the increased costs of liquidity management by the banks that need to balance their books – with instant payment it becomes a more difficult task, so it’s not unreasonable to expect the bank to pass the bill.
What Treasurers really need is clarity and transparency of cut-off times for making payments as well as certainty that when the payment is sent, it will actually arrive.
On cutoffs, there is currently a spaghetti of times, depending on the bank, branch, currency, and method of delivery of instructions that may or may not be visible even on the bank portal, not to mention the other systems – ERP or TMS – that the payments can originate from.
Payment confirmations could also be improved. Receiving ACKs means that the bank received the payment and it passed automated validation. It doesn’t mean it can’t be stopped for a myriad of reasons: insufficient funds in the account, sanction checks, incorrect beneficiary details that weren’t picked up by the automated checks, etc. What is needed is a confirmation and standards for banks in processing ACKs that the payment actually is processed and was sent out from the bank account as well as the ability to confirm it arrived at the intended destination.
This would make much more difference to the Treasurer stress levels than payments being instant.
Also Read
- Treasury Contrarian View: Treasury Dashboards — Are We Tracking the Wrong Metrics?
- Treasury Contrarian View: Are Treasurers Too Conservative with Cash?
- Treasury Contrarian View: Will AI Replace Treasury Analysts?
- Treasury Contrarian View: Payments in Crypto—A Treasury Reality or Just Noise?
- Treasury Contrarian View: Should Treasury Be a Profit Center?
- Treasury Contrarian View: The Case Against In-House Banks
- Treasury Contrarian View: ESG in Treasury—A Passing Trend or the Future?
- Treasury Contrarian View: Do We Really Need Treasury Centers in Every Region?
- Treasury Contrarian View: AI in Treasury—Hype or Reality?
- Trends Transforming the Current Treasury Management System (TMS) Landscape
- Treasury Contrarian View: Are Treasury Certifications Still Worth It?
- Treasury Contrarian View: Treasury Without Borders—Should Treasury Teams Go 100% Remote?
- Treasury Contrarian View: Why Stop at 100% Hedging?
- Treasury Contrarian View: Banks vs. Fintechs – Should Treasurers Bet on Smaller Players?
Join our Treasury Community
Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.