Anyone halfway familiar with finance and the Fintech industry is probably growing tired of hearing about the $300 million cable between New York and Chicago. It’s become the perfect anecdote and object lesson when discussing speed, infrastructure, capitalism, and data. And I apologize to all of you because I’m going to start this blog by talking about it again.
Drilling an 827-mile tunnel from Chicago to New York—cutting through mountains and under rivers along the way—would be a massive undertaking for any infrastructure project. But in this case, the sole purpose of this tunnel is to house a 1.5” (38mm) thick cable that will better facilitate high-frequency trading. This cable would facilitate transactions that were 3 milliseconds faster than the old cable that went around the mountains (for reference, it takes 400 milliseconds to blink your eyes).
Given that Dan Spivey of Spread Networks spent $300 million on the project, it’s fair to say that a single millisecond of speed is worth at least $100 million to him.
Today, there is an ever-increasing demand for faster payment processing and real-time financial interactions. Let’s discuss why payment speed matters, the impact of slow payments, and how PubNub can help.
Why fast payments matter
It’s not just high-volume traders who want faster payments. Internet infrastructure is at a point where most people—consumers, employees, and vendors—expect near-instant payments. Fast payments streamline customer interactions and provide operational efficiency.
I started this blog talking about a $300 million cable that can process transactions 3 milliseconds faster. Well, now I’d like to show you a different transaction, this time of a man purchasing a beer with Bitcoin in El Salvador:
Video credit: Documenting Bitcoin
Subtracting the time the man spent talking and trying to get his phone to read a QR code in the sun, this transaction took 22 seconds to process. That’s 22,000 milliseconds, or, using our cable example, $22 billion worth of time!
Most Bitcoin transactions move a lot faster today, but not too long ago, a crypto transaction would take so long that it was not uncommon for the price of Bitcoin to change while the transaction was being processed!
Did this slow transaction speed negatively affect the adoption of cryptocurrencies? Absolutely. Let’s discuss a few other consequences of slow payments.
Customer Experience
Few things will make a Fintech startup look like an amateur operation more than a slow payment. Slow payments communicate shaky infrastructure to your customers. After all, if your app is struggling to handle a simple customer transaction—the core operation of the app—then is it capable of handling anything else?
Delays cause dissatisfaction and can lead to the loss of clients. Anecdotally, when credit card chip readers first started becoming standardized, I continued to use the mag strip for as long as I could because chip readers took at least five seconds longer. Then, when touch payments started rolling out, I quickly discovered that it was initially slower and less reliable than a chip reader, so I continued using the chip reader. Even though it was only a few seconds, I felt like I was inconveniencing myself, the vendor, and the other customers in line behind me. When speed and reliability are paramount, slow payments can drive customers away to competitors offering fast solutions.
But the good news is that upgrading payment speed will bring back customers. It only took a few upgrades, but I (and most customers) now use touch payments whenever possible.
Fast payments mean customers can complete purchases, receive services, or transfer funds without unnecessary delays, making their experience smoother and more enjoyable. Businesses that offer quick payment processing build loyalty and meet what is now the bare minimum modern customer expectations for speed and efficiency.
Business Efficiency
Slow payments can create significant operational bottlenecks, disrupting cash flow and hindering efficiency. When transactions don’t process immediately, every subsequent step—from settling with vendors to updating account balances—is delayed, creating a ripple effect that impacts daily operations. These lags can lead to lost revenue and logistical complications.
For example, here’s an obvious truth: getting paid on time is pretty important. Yet, getting paid on time is a big challenge for many small to mid-sized businesses (SMBs). Late payments can create a domino effect where the business does not have the cash on hand needed to pay its own vendors. Most suppliers now report that their average customer payment arrives late, with 33% of invoices taking more than 90 days to be paid.
This is a worsening problem that businesses need to solve to achieve better growth. Companies can optimize cash flow and improve operations with quicker transactions. When transactions are processed quickly, funds move more fluidly, supporting faster revenue cycles. This agility reduces bottlenecks and allows companies to swiftly reinvest and respond to market needs.
How PubNub powers faster payments
PubNub powers faster payments for fintech by leveraging the speed and low latency of its 5G network. With PubNub’s infrastructure, financial apps can handle thousands of transactions per second in real-time, eliminating the delays often seen with traditional payment methods.
Edge Messaging Infrastructure
The key to this is a 5G edge messaging network. Simply put, edge messaging means data is processed at the network’s edge—closer to end users. That local setup minimizes the time it takes for data to travel.
So, instead of spending hundreds of millions of dollars to build a cable directly to your customer, we simply bypass the need for a long-distance data transfer. This means faster transactions and more reliable service for Fintech apps.
Transaction Notifications
PubNub’s transaction notifications provide instant updates on payment statuses, making them another tool for Fintech apps aiming to improve their reliability. Instant notifications let customers feel at ease knowing their payment was made through the network without any hiccups. This immediacy enhances trust in the app’s performance by enhancing transparency. Additionally, these notifications can be set up for each stage of the payment process—sent, received, or even critical alerts.
Reliable Scalability
PubNub’s scalability is vital for the fintech industry, especially as payment volumes surge. Companies used to maintain many servers—enough to power the maximum amount of traffic, data, and transactions that could happen in a spike. Today, PubNub’s edge messaging network only uses what it needs and auto-scales with your customer base while maintaining 99.999% uptime.
This ability to handle real-time data at scale means that fintech applications can maintain performance and responsiveness, delivering faster payments without sacrificing security or user experience, no matter how quickly the user base expands.
Security
One of the most important aspects of any financial application is security. PubNub’s security features help enable fast and secure payments, giving buyers and sellers the confidence they need to use your app reliably.
PubNub’s Access Manager controls permissions, allowing only authorized users to interact with the app, which helps prevent unauthorized access.
Data is fully encrypted in transit and at rest, ensuring payment and transaction information remains private and secure.
PubNub’s SOC 2 Type 2 certification also guarantees that our infrastructure meets rigorous industry standards, giving fintech companies a trusted, compliant foundation for real-time financial transactions.
Conclusion: Transforming Fintech with PubNub
Speed and reliability are the keys to running a modern Fintech app. With our edge messaging infrastructure, unlimited scalability, and robust security features, you can ensure every transaction is immediate and secure.
Ready to supercharge your payment processes? Contact us to learn more and explore PubNub’s real-time solutions for fintech.