The days when instant payments were a premium convenience are long gone. From Brazil’s Pix and India’s UPI to the US FedNow service and the upcoming launch of Canada’s own Real-Time Rail (RTR), real-time payments are changing how we once knew money moved. Today, RTPs are becoming a baseline operational standard as businesses transition to real-time rails to slash intermediate transaction fees and optimize working capital.
What’s more, it is only getting better as countries such as Canada embed legislative amendments into their payment systems, expanding real-time rail-to-payment services for service providers and credit unions. That said, adoption of RTPs remains uneven, with some legacy enterprises still relying on outdated ERP systems.
In this piece, we show how industries such as the gig economy, e-commerce, and healthcare have already embraced this payment modernization and the benefits they are getting from this fundamental shift as others play catch-up.
How the gig economy built the blueprint for instant disbursement
Every model on instant disbursement can be traced back to a gig platform that decides that there should be a direct correlation between work completed and capital received. The gig economy’s highly transient labor model necessitated real-time payments. Platforms such as DoorDash, Instacart, and Uber realized they had to make instant payouts a key selling point to retain their workforce.
Recent analysis by PYMNTS Intelligence shows that nearly 6 in 10 payments made via gig platforms today are processed via instant methods. In the US, instant disbursements driven by the gig economy have more than doubled over the last 5 years from 21% to 41%. What’s more, Canada’s RTR is expected to completely overhaul the gig platform’s payment service as cleaners, drivers and couriers will now be able to receive payment as soon as the job is completed. This will play right into the gig economy’s retention playbook where liquidity is operational survival, something that other asset-heavy industries will be desperate to replicate.
E-commerce and insurance converging on the same insight
At first glance, e-commerce and insurance sectors have nothing in common. While digital retail relies on low-margin merchant transactions, insurance carriers are all about pricing risk. Yet, in recent years, both of these sectors have converged on the same conclusion regarding the effect of transaction speeds on customer trust. How smooth a platform’s payout boundary is has never been more important.
For so long, the e-commerce sector had relied on global card networks that kept them in a chokehold with fees ranging from 1.5% to 3.5% per transaction. Unfortunately, adding these transaction costs to the two-day wait for card settlement wasn’t attractive to small- and mid-sized retailers operating on thin margins. Receiving funds instantly makes a whole world of difference for them – they can manage inventory quickly, and cash flow can compound quickly. This is best illustrated by Canadian merchants who are increasingly leaning toward account-to-account payments at checkout to eliminate the margin bleed caused by credit card processing fees.
On the other hand, RTPs are changing how insurers settle claims. The insurance sector has been notorious for its slow, bureaucratic maze of approvals that sometimes takes days before claim payouts are issued. This multiday wait can be agonizing, especially when policyholders need immediate access to cash for emergency expenses. Luckily, leading insurance carriers are now rolling out real-time disbursement networks that allow instant deposit into claimants’ accounts. The claimant just needs verification via an adjuster’s app, and a payout instruction is automatically triggered, with cash delivered within seconds.
Healthcare moving faster than expected
The healthcare sector is historically infamous for fragmented billing and regulatory red tape; hence, it is a surprise that it has emerged as one of the leading industries in RTP adoption. Take, for instance, insurance claims. The window between a medical procedure being performed, the hospital submitting a claim to the insurance, and the hospital receiving reimbursement can span 1-3 months, highlighting staggering friction in healthcare finance.
Progressive healthcare networks have realized that digital, automated payment systems connected to the data-heavy ISO 20022 standard can help expedite the provider-to-insurer settlement process. On the other hand, they are incorporating Earned Wage Access infrastructure that allows employees to access wages already earned on demand, without waiting for scheduled paydays. With replacement costs on the rise – it costs more than $60,000 to replace a single registered nurse – this simple infrastructure goes a long way toward solving the current workforce retention crisis.
Sectors such as B2B supply chains and government procurement, whose payment cycles still rely on cheques embedded in legacy ERP systems and contract structures, are lagging behind. However, others, such as the online gaming sector, are way ahead, as platforms compete for customer trust through instant settlements. Today, Canadian players are spoilt for choice when comparing the best paying online casinos in Canada in trustable sources like Casino Guru, which is the world’s biggest source of information about online casinos, all built around payout speeds. For sectors still relying on batch infrastructure, they better catch up with real-time payment rails, or their competition will do it for them.
