Real-Time Online Payment ProcessingWhile the U.S. might not be totally ready to implement real-time payments, businesses, banks, and customers alike can start preparing themselves for the changes real-time online payment processing will mean.  According to Forbes, The Federal Reserve Banks and the Federal Reserve Board are moving ahead with a plan for working with all the payment stakeholders –  banks, merchants, corporates and consumers — on ways to develop faster payments, based on research that says a new payment infrastructure is the best choice for the U.S.

Here we look at the benefits and drawbacks of using real-time online payment processing:

What is real-time online payment processing? When your customer makes a purchase, you can choose to gain authorization for that transaction immediately. It ensures that goods bought online are paid for before you ship them. For these reasons, real-time processing gives you, the merchant, a great deal of security for each transaction. It ensures both you and your customer that the transaction has been authorized by the bank that issued the card. Batch processing, on the other hand, collects and stores card data for later processing as a group.


Although a real-time payment system has a lot of benefits, businesses need to be aware of potential drawbacks. Since payments are approved immediately, there’s no chance to stop a thief who presents a card that has not yet been called in as lost or stolen. Another potential drawback with real-time online payment processing may occur is there are problems with your processing equipment such as the server. Without the ability to immediately transmit data, merchants may find themselves unable to accept credit card payments at all.

As businesses and banks begin developing a real-time payment system, they’ll need to develop a real-time fraud prevention system. The way fraud prevention operates now, banks and credit card companies rely on the day or two it takes to fully process a transaction to help identify and rectify fraudulent transactions. But if real-time payments truly are the future, then real-time fraud protection that could stop an unauthorized transaction in its tracks needs to be developed as well.

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