1. Real-time payments will make real progress.

Real-time payments are still in their infancy. Yet while the technology will take time to develop and reach its full potential, this space will experience a meaningful evolution by the end of the year.

When finance folks think about "real-time payments," they typically think timing, focusing on how much faster their business will be able to send and receive cash. But that isn't the only benefit. Real-time payments also provide instant communication between companies and their financial institutions. This means organizations can send and receive funds multiple times a day.

Being able to pay a counterparty 24×7, and having payment arrive within seconds, moves a treasury team away from the mad dash to get wires out before cutoffs—sweating as they wait 15 minutes or more to know the transactions settled properly—to a world where they can take care of business anywhere and from any device. Faster payments enable businesses to manage cash flows more efficiently, access funds more quickly, and gain deeper visibility into transactions' details.

Another consideration is that once payments become faster and progress with less friction, companies will inevitably have higher payment volumes. Why is this important? Because treasurers' workloads are incessantly expanding. Prior to Covid-19, global growth and increasing corporate merger and acquisition (M&A) activity were contributing factors to ever-more-dynamic environments that were constantly introducing new challenges to treasury workflows. Treasurers continue to face snowballing complexities because of it.

While much of the corporate wheeling and dealing originally planned for this year is now on pause, treasurers all hope to soon be back to managing treasury activities post-M&A and everything that goes with that: more banks, more accounts, more currencies, more connections, and more payment formats. To control this sprawling complexity, treasurers will need to pursue automation and straight-through processing wherever those capabilities are available. In an ideal scenario, treasurers would grant themselves three wishes: first, the ability to instantly process and confirm payments without errors; second, instant confirmation when incoming funds become available; and third, total transparency of payments throughout the processing pipeline. When it comes to completing payments at volume, every minute saved by more efficient processes counts. Real-time payment technologies will offer improvements in all these areas.

Existing settlement networks—such as Zelle, the RTP network from The Clearing House, and the European Payments Council's SEPA Instant Credit Transfer—will continue to mature this year. At the same time, banks and financial technology providers will increasingly pool their capabilities to create new settlement networks for real-time payments that are more expansive and effective than what we've seen up to this point. These networks will offer improved features, such as allowing larger transaction amounts. As this space evolves and the networks consolidate in 2020, they will also begin to deliver more refined and efficient payment processes.

It's important to note that hurdles remain for corporate treasury. The transaction limits on the existing real-time payment settlement networks remain relatively low. Combined with a higher cost than traditional ACH, the transaction limits will likely slow adoption in the short term. But the benefits are clear; the user-friendly technology is advancing; and, despite Covid-19, these initiatives will continue to progress—although the anticipated adoption of some of these initiatives will inevitably take a back seat in 2020 due to the current state of the economy.

2. Companies will face fewer obstacles to open banking.

"Open banking" is the initiative spurring financial institutions to electronically and securely share information via application programming interfaces (APIs) and similar technologies. Open banking has laid the groundwork for real-time payments to become a reality. Still, much work remains.

At present, the number of banks participating in the open banking initiative is limited. Expanding participation is critical to the ultimate success of open banking. In addition, for those banks that are participating, APIs need to cover a broader swath of payments, including transactions with higher dollar values; a wider variety of settlement types (e.g., wires, ACH transfers); and a lifting of payment time restrictions, so that payments can be scheduled every five minutes, every hour, etc. Removing the current limits along these dimensions would expand the types of payments that can be pushed through settlement networks via API.

As the open banking technologies underlying real-time payments become more flexible throughout 2020, a greater number of banks will likely adopt open banking practices. Corporate treasury teams should ask their financial institutions the following questions before embarking on an open banking journey:

• What APIs do you have available today? (Do your APIs enable payment settlement, balance reporting, etc.?)
• What payment types and volumes do your APIs support?
• What customers or vendors are currently leveraging these APIs?
• What is the implementation time?
• What is the new cost structure for payments made in your open banking framework?

The competitive motivations for banks are clear: Open banking APIs attract new corporate clients by enabling organizations to streamline their bank connections, while also delivering better visibility into, and more control over, payments. Banking APIs can also enable self-service options through which corporate treasurers can complete onboarding processes and establish connectivity between the banking platform and the internal treasury management system and related applications. This enables the corporate customer to achieve banking connectivity in much less time—just a few hours vs. four to six weeks—and might require fewer internal resources for the bank, as well.

These opportunities will probably prove inviting enough to inspire the industry to bring open banking into the mainstream over the course of 2020.

3. SWIFT gpi will improve transparency of cross-border transactions.

While real-time payment networks are improving the speed and visibility of in-country transactions, SWIFT gpi aims to perform the same functions for international payments. SWIFT gpi now offers universal payment tracking in real time, equipping treasurers with total end-to-end visibility as their payments progress through processing, even across borders. This functionality is analogous to having tracking on a package in transit, with the added capabilities to potentially change or stop the package at any point.

With the total transparency that SWIFT gpi offers, corporate treasurers who make the transition will gain the ability to make more timely and efficient decisions this year, better recognize roadblocks, and ultimately achieve more rapid cross-border payment processing.

Ashley Pater is chief product officer at GTreasury. She oversees the global product group, ensuring that the product vision and strategy align with GTreasury's business objectives.