Payment Rail Innovators Look Ahead Towards Digital Currencies, Faster Payments

With payments innovation continuing to accelerate, a number of new initiatives are now underway across a range of payment rails. In Nigeria, that means improving upon the legacy of the paper check, while in the U.S., Nacha is preparing corporates for faster payments. Meanwhile, chatter continues to grow about blockchain-based Central Bank Digital Currencies (CBDCs) to power cross-border transactions, with widespread implications for the payments landscape.

Nacha Touts ACH For Small Business Payments

In a recent blog post, Nacha highlighted one small business, JML Electric, as an example of how ACH payments can benefit smaller firms through digitization and cost savings. The payment rail can facilitate so-called “pull” payments, in which a business is authorized to pull funds from an account to complete a transaction. SMBs that already have platforms like QuickBooks and other accounting solutions in place can also benefit from ACH, with integration capabilities able to seamlessly create and transmit ACH files. For JML Electric, this means not having to handle physical checks, while also offering a payment method to customers that does not require additional fees, such as with credit cards.

Nacha Readies Corporates For Faster Payments

In addition to touting the benefits of ACH for small businesses, Nacha’s Payments Innovation Alliance is also taking measures to ready businesses for the proliferation of faster and real-time payments. Having already completed its Faster Payments 101 educational tool for SMBs, as well as its Playbook for Financial Institutions, the Innovation Alliance is now working to release the Faster Payments Playbook for Corporates. According to Nacha, the Playbook should go live in the first half of this year and will aim to help corporates “navigate the changing faster payments landscape.”

CBR Sounds Off On Digital Currencies And The Future Of Swift

As more central banks around the globe continue with initiatives to develop proprietary national digital currencies, the Central Bank of Russia (CBR) has issued its thoughts on the future of such technologies and what they could mean for the global inter-bank payments messaging network SWIFT, which “may not be necessary” in light of emerging digital currencies. As the CBR prepares to launch its digital ruble technology this year in Crimea, the nation is also working on the development of its own financial messaging network SPFS, as potential sanctions by western nations has placed Russia’s relationship with SWIFT in jeopardy.

Ripple Explores The Digital Currency Opportunity

While the potential impacts of central bank digital currencies remain uncertain, Ripple is already planning the development of a solution that would enable central banks to implement the technology. Reports in The Daily Hodl pointed to a recent Ripple presentation of plans to a range of cross-border payment solutions for financial institutions that can be leveraged “as infrastructure suited to the exploration, ideation and eventual delivery of a fully functional CBDC,” Ripple global head of client solutions Ross Edwards reportedly said in the presentation.

Nigeria Implements Check Standardization

Jan. 1 marked the launch of a new check standard in Nigeria as the Central Bank of Nigeria looks to digitize what is a largely manual and analogue payment process. According to The Guardian reports, from January to October of 2020, the Nigeria Inter-Bank Settlement System processed nearly 4 million checks, about a 40 percent reduction in check volume compared to the same period in 2019. But checks remain a popular payment method for B2B payments, and as a result of their continued use, the central bank is implementing a new digit on checks’ Magnetic Ink Character Recognition code line and expiry dates in an effort to combat fraud and enhance security. According to critics, the initiative has resulted in the central bank using valuable resources to innovate on an outdated payment method, even as Nigeria continues to expand adoption of electronic payments.

JCB Dives Into Blockchain B2B Payments Project

Japan-based credit card conglomerate JCB is reportedly diving into a new payments technology development project based on blockchain, according to Ledger Insights reports. JCB is said to be collaborating with LayerX to develop a tool that integrates into corporate procurement and accounting systems, though reports said details on the initiative remain scarce.