What is a significant benefit of Real-Time Gross Settlement (RTGS) payments?

A significant benefit of Real-Time Gross Settlement (RTGS) payments is their irrevocability. This means that once an RTGS payment is processed and settled, it cannot be reversed or altered. This feature provides a high level of security and certainty in transactions, which is particularly important in high-value and time-sensitive payments. The irrevocability of RTGS transactions helps to reduce the risk of fraud and ensures that once funds are transferred, they are delivered to the intended recipient without the possibility of later dispute or reversal. This characteristic is critical for financial institutions and businesses that rely on the prompt and reliable settlement of payments to manage cash flows effectively.

In contrast, while concepts such as cost efficiency, flexibility, and ease of use are important in the context of payments, they do not capture the unique and essential attribute that irrevocability provides in the RTGS framework. Thus, the focus on irreversibility truly highlights one of the most compelling advantages of using RTGS systems for significant transactions.