Same Day ACH, the faster payments initiative for banks and other financial institutions in the United States, seems to be popular.
According to NACHA, the network processed nearly $5 billion in 3.8 million transactions, with an average transaction value of more than $1,000, in the month of October alone. But the U.S. still has a long way to go and plenty of faster payment lessons to learn.
For the latest edition of the Faster Payments Tracker™, PYMNTS caught up with Barry Kislingbury, ACI’s director of solution consulting, and WA Proctor, ACI’s vice president and product line manager, to get their thoughts on faster payments in the U.S. and around the world.
As faster payments schemes gain wider adoption, Kislingbury noted, there were mistakes made by its forerunners in countries like England and around Europe that U.S.-based financial institutions should try to avoid.
“The U.K. has certainly learned some lessons that … a lot of the rest of the world, including the United States, is able to benefit from,” he said. “The banks didn’t necessarily realize how clever fraudsters were, but very quickly after that, they all put in fraud and security systems, and I think other countries need to do that more quickly.”
Faster payments providers in the United States should look to protect some of the most vulnerable transactions, Proctor added, in order to keep fraudsters at bay while the technology develops and becomes more secure.
“A lot of the fraudulent transactions surface when you’re doing direct debits, when you’re pulling money out of someone’s account,” he said. “It needs to not be based on a debit pull, but instead, it’s a credit push transaction, so all transactions must be initiated by the sender.”
Around the Faster Payments world
With faster payments quickly becoming more popular, financial institutions are beginning to realize that payments need to be just as secure as they are fast.
For example, the Federal Reserve System’s Secure Payments Task Force is seeking comments on how to bolster security for faster payment transactions in the future, and InAuth and Early Warning partnered to improve the security of real-time payment services in the mobile landscape.
Meanwhile, several banks, including Sweden’s SEB, are consider using Ripple’s digital currency for cross-border transactions. A survey of 10 commercial banks from the U.S., Canada and Europe found 90 percent of respondents are mulling blockchain technology for payments.
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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.