Innovations Prime Pump for Surge in Cross-Border, Real-Time Payments

Jeremy Wilmot said he believes the future of digital, real-time payments is now — and that we’ll witness an “explosion” in cross-border, real-time transactions over the next several years.

ACI Worldwide’s chief product officer told PYMNTS in an interview that the pandemic is serving as a catalyst for trends that were in place well before COVID-19 upended our lives. To put it simply: We were all moving toward digital transactions.

“But we saw 10 years of innovation and change happen in 12 months,” said Wilmot — and as a result, we’ve become less dependent on paper, cash and checks (and that goes for consumers and enterprises alike).

Economies that have traditionally been rooted in cash transactions will swiftly catch up, Wilmot predicted. For example, ACI has been working actively to develop real-time infrastructure in Peru, and the company saw four-digit-point growth in transactions in 2021 compared to a year ago.

As governments and enterprises invest more time and money in building out real-time tech and promoting new use cases, consumer behaviors will change among younger and older demographics alike, Wilmot projected.

“Consumers have really embraced the benefits and convenience of digital,” he told PYMNTS, with a nod toward contactless payments and digital wallets. “Security remains a very important part of the buying experience. Having said that, convenience is also important to consumers today, and merchants are really focusing on how to ensure that customers are comfortable with their experience,” along with making sure they have as broad a range of payment choices as possible — including cryptocurrencies and real-time options.

Governments, especially, have been promoting real-time payouts, advocating settlement, disbursement and same-day wages to gig and formal economy workers, Wilmot noted.

Real-time payments have economic benefits for everyone, but the end-user experience is critical, he said — everyone will want to have “the same experience regardless of whether they’re using real-time payment digital wallets, or a debit card attached to a [demand deposit account (DDA)] or current account, or an ACH ‘pay on check’ account.”

Wilmot said that infrastructure modernization projects are focused on promoting a common look and feel, as well as liquidity and risk management capabilities across different payment types, largely triggered by the movement toward real-time payments. The U.S. Federal Reserve’s FedNow initiative will likely encourage many merchants and banks to upgrade.

Competitive Environment

“In a highly competitive digital environment, the merchants really need to focus on the rapidly changing needs of their consumers,” Wilmot said, and should promote frictionless experiences (at this point, frictionless is table stakes). “Consumers are looking for a multitude of different payment methods, including the ability to split payments, the ability to buy now, pay later and the ability to use traditional methods. The merchants need to embrace all of these things.”

Looking ahead, Wilmot predicted there will be an explosion of digital real-time volumes in the short term and long term.

To manage it all, he said, “We’re going to require a level of standardization in large domestic real-time markets that enable interoperability” in order to facilitate cross-border transactions.

That cross-border activity is still in its nascent stages. There are also still several issues to be ironed out surrounding settlement times, disputes and even how to leverage blockchain technology.

Security will remain top of mind as well.

“Fraud will always migrate to the weakest link,” Wilmot said, but the tide is rising and is inexorable. “Over the next 12, 24 and 36 months, we’re going to continue to see a very rapid rise in real-time payments and digital payments on a global basis in every single country.”