PYMNTS-MonitorEdge-May-2024

FinTechs Drive Adoption Of Payment Rail Innovations

Whether innovators improve upon legacy payment rails or embrace the development of entirely new ones, the success of any infrastructure depends on adoption.

In this week’s look at Payment Rail Innovation, PYMNTS finds FinTechs and finserv providers pushing for adoption through greater accessibility.

While NACHA reports rising adoption of ACH among corporates, one FinTech is looking to boost adoption of The Clearing House’s RTP through connecting more banks to the network. Plus, an accounts payable (AP) automation company improves upon ACH and checks for business payments, while others partner up on blockchain supply chain transactions.

Alacriti Links Banks To RTP

Payments FinTech Alacriti has announced a new solution designed to streamline the process by which banks and credit unions (CUs) loop into the RTP network for real-time payments. The company announced last week the launch of its Cosmos for RTP tool, powered by the Orbipay platform, which enables financial institutions (FIs) to link to The Clearing House‘s new payment network and offer real-time payments for their own customers.

Alacriti CEO Manish Gurukula said the solution is designed to meet the need for faster payments among both consumers and businesses.

“Consumer and business demand for instant, 24×7, any-to-any payment experiences is here,” he stated. “To compete, financial institutions need to deliver tomorrow’s experiences, today.”

R3, Mphasis Link Up On Blockchain Payments

Also focused on newer payment infrastructure is Mphasis, which announced a partnership with blockchain technology company R3. Mphasis will work with R3 to develop a blockchain platform using R3’s technology Corda, with the companies focused on supply chain B2B payments and trade finance.

Mphasis already operates a digital payments and finance ecosystem dubbed ALTA. Aimed at connecting enterprises throughout the supply chain, the ecosystem will be augmented through the blockchain network to facilitate access among small- to medium-sized businesses (SMBs) to a suite of financial services, including foreign exchange, access to working capital and B2B payments.

“To support a meaningful and sustainable re-activation of global supply chains, we must embrace more flexible, efficient and resilient models that enable a higher level of visibility and collaboration between banks, buyers and suppliers,” said R3’s Dorothy Copeland, global head of Alliance and Ecosystems.

ACH Rise Fueled By B2B

As innovation continues to develop and wield emerging payment infrastructures, one legacy network, ACH, continues to thrive.

The latest research released by NACHA revealed that the ACH network saw significant growth in the third quarter of 2020 driven by commercial payments as well as government assistance program payments. According to NACHA, 6.8 billion ACH payments were made in Q3, a 9 percent year-over-year increase, with a more than 13 percent jump in the value of those transactions — totaling about $15.9 trillion.

B2B ACH payments saw a 12.4 percent increase, with the reopening of dental and medical facilities likely leading to a spike in healthcare claim payments to healthcare providers.

Corporates’ continued shift away from paper and toward digital workflows has also contributed to the growing adoption of the payment rail, NACHA noted.

The latest innovation to improve this legacy rail, emerging in the form of Same Day ACH, saw a 41 percent year-over-year increase in payment volume during the third quarter.

“Electronic ACH payments are the proven way to make payments for wages and salaries, expenses, benefits, B2B and so much more,” said NACHA President and CEO Jane Larimer in a statement.

Stampli Debuts ACH Payment Feature

Also looking to innovate on legacy rails, including ACH and paper check, is Stampli, which rolled out its Direct Pay feature. The AP automation company noted the solution allows businesses to pay invoices directly from their bank accounts to avoid any card processing fees a supplier might charge.

In addition to initiating the payment, the technology supports automated reconciliation with bank statements, with a single withdrawal linked to a single invoice. To improve upon check payments, Stampli provides access to transaction details and other supporting documents.

“If you pay a $5,000 invoice with ACH using Stampli Direct Pay, you’ll pay less than $1 to process that payment vs. $175 imposed on your vendors to accept virtual credit card payments,” said Stampli CEO Eyal Feldman. “Vendors are your partners, not your enemies.”

PYMNTS-MonitorEdge-May-2024