Collaborations Bringing Faster Payments Up To Speed

Now, more than ever, seemingly everyone expects to be able to do what they want, when they want. Whether it’s downloading or streaming music, ordering takeout via telepathy or paying their bills, consumers expect to be enabled to complete tasks immediately.

In this month’s Faster Payments Tracker™, powered by NACHA, payment providers, in efforts to keep up with modern behavior, are looking for new ways to streamline and quicken financial processing.  Challenges and solutions continue to emerge surrounding NACHA’s recent move toward establishing Same Day ACH payments, which are due to arrive as soon as September 2016.

Here are a couple of notable nuggets:

• In a recent NACHA survey that was distributed to 22 ACH originating institutions, 100 percent of respondents said they intend to offer same-day payroll, and 95 percent said they were planning to offer same-day B2B services. Companies said they were also interested in how ACH might impact expedited bill pay, person-to person functionality, and payment options.

• While there are plenty of positives set to result from Same Day ACH, some banks are concerned about the risks posed by faster payments. More than 93 percent of U.S. financial organizations believe that the transition to Same Day ACH will increase fraud threats, according to the ‘Same-Day ACH Fraud Preparedness Survey.” The severity of this belief appears to be exacerbated by a lack of preparedness, with over 50 percent of survey respondents indicating they have no fraud solutions for dealing with the risk posed by Same Day ACH.

The April edition of the Faster Payments Tracker™, powered by NACHA, also features the latest news and analysis from around the industry.

Collaboration and the quest for ubiquity

In this month’s Faster Payments Tracker™, PYMNTS spoke with Steve Ledford, TCH’s Senior Vice President for Product and Strategy, and Russ Waterhouse, TCH’s Executive Vice President for Product Development and Strategy, about their recent submission to the Fed’s Faster Payments Task Force, the search for ubiquity and what’s next for same-day payments.

Here’s a sneak peek:

The ultimate goal, Waterhouse said, is ubiquity – namely, to make real-time payments mainstream.

“We clearly understand and recognize that, for this to work, it’s got to be ubiquitous like an ACH or check is,” Waterhouse said. “But it’s also got to bring value that’s way beyond just delivering money quickly. And that’s why, you think about the design and the approach that Steve [Ledford] and the team have taken, it’s not just about the speed — it’s about the full function of the system, in terms of what it provides to the banks in terms of a development platform. There are a lot of non-payment messaging capabilities that we think will provide tremendous opportunity for innovation.”

And the “delivering value” piece is not to be underestimated in the pursuit of ubiquity. TCH recognizes that having access to 10,000+ banks is different than having connectivity to 10,000 banks. Crossing that chasm is a function of making sure that the value is there for both the receiving and originating banks, and that the economic proposition makes sense. The biggest fear that all banks have in the move to faster payments is the cannibalization of existing revenue streams, coming at the same time banks are under tremendous competitive pressure to make the move to digital.

As a result, Waterhouse said that TCH has a framework for a system that would work for as many stakeholders as possible to reach all financial institutions.

“It brought a lot of folks together who wouldn’t have otherwise,” Ledford added.

To download the May edition of the PYMNTS.com Faster Payments Tracker^TM, powered by NACHA, click the button below …

About The Tracker

The PYMNTS Faster Payments Tracker™, powered by NACHA, is your go-to resource for staying up to date on a month-by-month basis. The tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.