Real-Time Payments for E-Commerce: Merchants’ Guide

Every second counts at checkout. 22% of shopping carts are abandoned due to slow payments, according to Analizify. That means lost revenue, frustrated customers, and missed opportunities.

But here’s the good news: real-time payments can fix this. Real-time payments mean higher conversions, better cash flow, and a seamless checkout experience.

Here we take a look at real-time payments, how they work and how to leverage them for your business.

Real-Time Payments Explained

First, let’s clarify some terms.

Real-time payments and instant payments are often used interchangeably. Both enable near-instant bank transfers, 24/7/365 availability, and immediate transaction confirmation.

However, there are subtle differences:

• Settlement speed: An instant payments usually settle within 5-30 seconds, while  real-time payment can take a few minutes in some cases.
• Regional terminology: In the US, “real-time payments” often refers to The Clearing House’s RTP network, while “instant payments” is a broader term.

For this article, we’ll use instant payments and real-time payments interchangeably, referring to fast, always-available transfers.

Benefits of Real-Time Payments for E-Commerce

Real-time payments make checkout seamless. When paying is quick and easy, customers are happier – and more likely to complete their purchase. That means fewer abandoned carts and more revenue for your business.

Still not convinced? Check out these stats:

• Slow checkouts cause 22% of shopping cart abandonment (Analizify).
• Merchants with four express checkout options, often including real-time payments, see 67% conversion rates – compared to 52% for those without (FinTech Magazine).
• The real-time payments market is growing fast, with a 30.9% annual growth rate (Grand View Research).
• By 2026, it’s expected to make up a quarter of all electronic payments (GlobalData, 2022 report).

Real-time payments also improve cash flow – faster transfers mean better financial control. They also free up time, so you can focus on growing your business instead of tracking transactions.

‘Normal’ Payments vs Real-Time Payments: Key Differences

Here’s how real-time transfers stand out:

• Faster initiation: Payments can be made via mobile apps, online banking, or even by scanning a QR code – no delays, no friction.
• Instant authentication: Banks verify identity and funds in seconds using biometrics, passwords, or two-factor authentication.
• Real-time payment processing: Unlike traditional systems that batch payments, real-time payments systems process each transaction individually and instantly.
• Immediate confirmation: Both sender and receiver get instant notifications via SMS, email, or app alerts.
• Instant settlement: No waiting – funds move immediately and are ready for use.

How Do Real-Time Payments Work

Let’s break down real-time transactions – what makes them truly ‘real-time’? There are two key parts:

1. Instant at checkout: A seamless, instant experience with no manual data entry, just a quick, smooth payment.
2. Instant behind the scenes: The right payment rails are used to ensure the money moves instantly.

Best Instant Checkout? Open Banking Payments

For a smooth, instant checkout, you need a real-time payment solution built for speed.

Open banking payments are built for a superior user experience (UX). Also called Pay-by-Bank,  it’s a faster, cheaper, and more user-friendly real-time payment method.

Here’s how it works:

• Payments go directly from bank to bank – no card networks, no middlemen.
• Customers authenticate through their bank interface and pay seamlessly.

Why Open Banking?

• Faster, frictionless payments: No card details, no manual entry. Just a quick, secure transfer.
• Lower fees, no chargeback: Cutting out card networks means fewer costs and risks.
• Regulated & secure: Backed by EU PSD2 regulation since 2018, ensuring safe transactions with customer consent.

Leverage Open Banking with Noda

Noda is built for e-commerce merchants looking for superior open banking and card payments. Our payment platform also delivers advanced data solutions and no-code payment options.

Our Open Banking API provides a seamless user experience, reduces fees, and eliminates chargebacks. With connections to over 2,000 banks across 28 countries, we support multiple currencies and operate globally, reaching beyond the UK, Europe and beyond.

We offer plugins for top e-commerce platforms like OpenCart, WooCommerce, Magento, and PrestaShop, ensuring seamless integration.

Noda enhances conversions with a streamlined checkout form powered by AI-driven routing for real-time payments. For businesses with limited tech resources, our no-code payment pages, links and QR codes provide smooth setup.

Additionally, Noda’s advanced data tools, including secure bank login and Know Your Whales (KYW) insights, enable better customer behaviour predictions and informed decision-making.

With transaction-based pricing, Noda simplifies payments and accelerates your business growth.

Understanding Real-Time Payment Rails

When picking a provider for real-time payments, check that they use the fastest and most efficient payment routes and rails.

For example, at Noda, we use AI-powered smart routing and acceptance recovery technology. Our software analyses transactions, selects the best bank for processing, and increases the chances of successful payments.

Here are the real-time payment (RTP) networks around the world to keep in mind for your real-time payments:

• UK – Faster Payments (FPS): Launched in 2008, FPS enables near-instant payments between British banks.
• Europe – TIPS: A Eurosystem payment rail processing transactions in under 10 seconds, supporting euros and Swedish krona, with more currencies to come.
• Europe – RT1: Operated by EBA Clearing, RT1 settles payments in seconds across SEPA, reaching 85% of bank customers.
• Sweden – Swish: A widely used mobile app for instant payments between people and businesses.
• India – IMPS: A 24/7 instant bank transfer system available via mobile, ATMs, SMS, and web.
• US – RTP (The Clearing House): The first new US payments infrastructure in 40+ years, offering instant settlement around the clock.
• US – FedNow: Launched by the Federal Reserve in 2023, enabling real-time payments nationwide.
• Brazil – Pix: A 24/7 instant payment system accessible to all bank and payment account holders.
• Singapore – PayNow: Allows real-time transfers using phone numbers, ID numbers, or business IDs.
• Australia – NPP: Supports instant payments and features PayID, allowing transactions with mobile numbers or email instead of account details.

SEPA Real-Time Payments

You can’t talk about real-time payments without mentioning SEPA. You’ve likely heard of SEPA payments. SEPA Instant Credit Transfer (SCT Inst) is its real-time payment type.

It’s not a payment rail but a set of rules created by the European Payments Council (EPC). It standardises instant payments across SEPA countries. Transfers must settle in 10 seconds and can go up to €100,000. Banks and financial institutions can choose to adopt it.

Why Now? Regulatory Breakthrough

Real-time payments are about to take over Europe – and businesses need to be ready.

A new Instant Payment Regulation (IPR) will require all banks and payment service providers (PSPs) to process euro transactions in under 10 seconds, 24/7. This applies across all EU and SEPA countries, forcing banks to upgrade fast. Customers will also get instant payee verification and real-time payment confirmations.

Here are some key dates this year:

• 9 January 2025 – All eurozone banks must be able to receive instant payments.
• Mid-2025 – Member States must update laws to allow payment institutions and e-money institutions direct access to payment systems.
• 9 October 2025 – All eurozone banks must support sending instant payments, including payee verification.

For e-commerce merchants, this shift is huge. Merchants shouldn’t settle for providers that fall short of offering real-time payments, or they will lose to competition that uses better payment systems.