Payments and fintech
Real-time payments
Account-to-account transfers that settle in seconds, at any hour.
Last reviewedWhat does Real-time payments mean?
Real-time payments are transfers from one bank account to another that complete in seconds, 24 hours a day, every day, usually through a system run or backed by the central bank. Examples include UPI in India, Pix in Brazil, Faster Payments in the United Kingdom, FedNow in the United States and Aani in the UAE. They are often free or very cheap for consumers and merchants, which makes them a low-cost rival to cards at the checkout. Example: a shop taking 1,000,000 a month through UPI at zero MDR, instead of cards at 1.5 percent, saves 15,000 a month. Their growth squeezes card fees and pushes payment firms to earn from other services, such as lending.
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Related terms
- Merchant discount rate (MDR)The total fee a merchant pays to accept a card or digital payment.
- Interchange feeThe fee the merchant's bank pays the cardholder's bank on each card payment.
- Network effectsA product becomes more valuable as more people use it.
- IssuerThe bank or firm that gives a customer a card and, for credit cards, takes the credit risk.
- AcquirerThe bank or firm that lets a merchant accept card payments.
- Card scheme (card network)The network that sets the rules and connects issuers and acquirers, such as Visa or Mastercard.
- Take rateThe share of each transaction's value that a platform keeps as revenue.
- Basis points (bps)One hundredth of a percent: 100 basis points make 1 percent.