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Everything you need to know about instant payment

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Last editedJune 20232 min read

It’s now easier than ever to send and receive funds instantly thanks to advances in real-time payment technology. B2B instant payments let businesses settle invoices in real time, while B2C instant payments ensure fast, easy payment for goods and services. In this guide, we’ll cover the latest instant payment methods available for businesses today.

What are instant payments?

The instant payment meaning refers to any system facilitating immediate transactions. Payments are sent electronically, in real time, without any restrictions on working hours. Many systems have built-in messaging for even greater efficiency. That means you can send payment requests and receive automatic confirmations. Instant payment methods vary by country, encompassing services like banking apps, peer-to-peer finance apps, and mobile wallets.

How do instant payments work?

Instant payment systems use a dedicated clearing and settling network designed to facilitate immediate funds transfers. These work alongside traditional direct debit and same-day payment networks, but they’re processed differently. While direct debit payments are processed in batches, instant payments are processed individually. Financial service providers are shifting their transfer methods from batched files to APIs, submitting payment order details in encrypted API payloads. This reduces the steps needed to make a payment using automation and data.

These networks vary by country. The UK has the Faster Payments service, the US the Automated Clearing House. Australia just rolled out a New Payments Platform custom-built for instant payments, along with a PayTo service. PayTo offers a fully digital, mandated way for merchants to initiate payments directly from customer bank accounts. The transfer is instant and secure.

Does instant payment work on weekends?

One of the biggest benefits of instant payments is that they aren’t confined to working hours. Unlike direct debit, instant payments can be sent and received 24/7, including weekends and holidays. Payments are processed in close to real-time, usually within 60 seconds. The sender then receives immediate confirmation that payment has been received by the sender – even on weekends.

The benefits of instant payment systems

For businesses, there are plentiful benefits to using a system like PayTo. You get funds verification and payment confirmation in real-time, along with instant validation of customer accounts. Using APIs, all transaction data is securely stored and transported to keep everything in one place. Thanks to the built-in messaging systems, you get instant notifications for easier payment tracking. This means you’ll be notified if the customer changes the payment. Like credit cards, instant bank payments offer immediate notifications. Yet they do this with lower costs and higher security.

Customers like using instant payment systems as well, as it gives them greater control over the way they make payments. They enjoy the efficiency of being able to pre-authorise payments from their bank accounts, knowing exactly when and how much will be taken. It’s a smoother payment experience at both ends of the transaction. Depending on the account type, customers can get started using a PayID or traditional account number to set up a mandate.

A simplified end-to-end process gives less room for error, and dedicated networks like the New Payments Platform are designed for best-in-class security. This cuts down on the chances of fraud and other risks associated with online bank payments.

Getting started with instant payments Australia

As an early adopter of PayTo, GoCardless is ready to help your business get started. Reduce the cost of processing payments, while improving your cash flow using the power of real-time payments. Our Success+ solution catches failed payments and automatically retries them at the most optimal time, using payments intelligence. Collect recurring and one-off payments directly from customer accounts, all at a faster rate than traditional direct debit. Ready to learn more? Visit our PayTo University for all things related to this new, innovative payment technology.

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GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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