The U.S. is among a handful of countries now planning the implementation of national real-time payments, but confusion remains as to what is meant by "real time" — and when it's important. 

"Faster Payments Coming Soon: The Path to Near Real-Time Payments in the U.S." from Mercator Advisory Group explores the current state of real-time payments and the market need expressed by consumers, companies, and banking and payments professionals.

Real-time funds availability can be essential for emergency insurance claims disbursements, government disbursements and collections, payday loan disbursements, and person-to-person payments or funds transfers.

"Near real-time" payments are acceptable in situations such as corporate disbursements, e-commerce payments, and expedited bill payment.

ACH batch-mode processing will always be acceptable in some payment scenarios (such as payroll), while in others, funds must be available (but not necessarily settled) in real time — and consumers are willing to pay extra for the service.

The Mercator research report covers real-time definitions and types, market needs, and the historical development of real-time payments outside the U.S.

According to Ron Mazursky, debit advisory service director at Mercator and author of the research report:

Real-time payments in the U.S. are becoming tangible. With the Federal Reserve ramping up its efforts, FIS PayNet going live in 2014, Dwolla and BBVA Compass partnering up, The Clearing House jumping into the act and claiming a role in real-time payments, and ACI UP Framework providing infrastructure to other real-time payments around the globe, real-time payments in the U.S. is now a stone's throw away. The key is for the industry to come to a consensus as to where ACH ends and near real-time or actual real-time payments begins. We found real-time being defined based on two different sets of criteria, with real-time authorization/clearing and then availability of funds being important to consumers and merchants. In reality, real-time movement of funds is not a critical component of the real-time ecosystem.

Highlights of the report include:

• a definition of real-time payments:
• a snapshot of the market need for real-time payments — what consumers say they prefer, and what banking and payments industry professionals expect;
• a summary of market implementation of real-time payments by country;
• three developments in real-time payments in the U.S. — Federal Reserve plans, FIS Global PayNet, and the ACI Worldwide UP framework; and
• a discussion of future developments in the U.S. for real-time payment networks.

One of seven exhibits in the 21-page report: