A quick look at different types of faster payment transactions
Instant and other types of faster payments can be used for a variety of everyday transaction scenarios. Although some of these scenarios are not yet supported in the United States, as adoption of faster payments continues to grow and extend to an ever-wider array of scenarios around the world, it’s important to familiarize yourself with all of them – they’re likely to become part of the payments landscape of the future.
Whether purchasing groceries, sharing a meal with a friend or paying for products to run a business, one or more types of faster payments may be a viable option. Take a closer look at the infographic to the right or continue below to learn about the different types of transactions that benefit from the speed, finality and other features that faster payments offer.
- Person-to-Person (P2P): These are payments made by individuals to friends, family members or other individuals for a variety of purposes, such as reimbursing shared rent or paying someone to walk the dog.
- Consumer-to-Business (C2B)*: These payments are made by an individual to a business. For example, paying the grocery store for groceries, paying a bill or paying a salon for a haircut.
- Consumer-to-Government (C2G)*: These are payments made by an individual to a government entity. Examples would be paying federal, state or municipality taxes, park passes or licenses.
- Government-to-Consumer (G2C)*: This includes payments from the government to consumers, such as tax refunds, social security benefits or stimulus payments.
- Business-to-Consumer (B2C)*: These are payments made by a business to a person, such as a business refunding money to an individual, paying employees their wages or disbursing insurance claims.
- Business-to-Business (B2B): This type of transaction occurs between businesses. This could be a payment to suppliers for inventory or services.
- Business-to-Government (B2G): This includes payments from a business to a government entity, such as federal or state tax payments.
- Account-to-Account (A2A): This is the transfer of funds from a customer’s account to another account, typically owned by the same customer, at either the same or another financial institution, such as transferring money from a bank account to a brokerage account.
*The term “person” can be used in place of “consumer” in these instances. For example, consumer-to-business (C2B) may be referred to as person-to-business (P2B).