The faster payments get, the less tolerable waiting becomes for customers, businesses and other financial players. But in late July, one of the biggest waits in the payments industry came to an end.
The August Faster Payments Tracker™, powered by NACHA, highlights notable news and developments from across the faster payments landscape, including coverage of the long-awaited release of the Federal Reserve’s Faster Payments Task Force report on how to improve the U.S. faster payments system, efforts by NACHA to standardize APIs across the industry and recent investments in blockchain solutions.
News from around the world of Faster Payments:
Almost two years after the Fed’s Faster Payments Task Force was formed, the results are finally in. Or, to be more precise, they’re out in a 64-page report released by the Task Force late last month.
The report, which was based on input from around 300 players in the payments industry, outlined 10 key strategies to improve the faster payments system in the U.S., including opening the door to a larger role for the Fed in certain areas. Some of the strategies outlined in the Task Force report include allowing a market-first approach to governing the faster payments system, greater education efforts for the industry and more research to develop fraud detection systems.
Detecting fraud early and efficiently is a growing concern for all parties as faster payments rise. A separate report from fraud prevention solutions company GIACT points to potential fraud risks that could arise when Same Day ACH debits roll out in September 2017. The GIACT report urges financial institutions to improve their existing fraud prevention mechanisms to ensure that fraudsters do not exploit shortened settlement times. In addition to GIACT’s report, NACHA is making its own efforts to help the financial services sector with the formation of the API Standardization Industry Group. The group intends to develop an API standardization “playbook” to help various players in the financial services industry promote real-time payments by addressing security and efficiency issues through APIs.
In addition to APIs, several financial institutions are taking a closer look at the potential of blockchain to offer cross-border payments. A group of 22 global banks announced their participation in a proof of concept for cross-border payments from financial messaging service provider SWIFT. In Europe, a group of seven banks tapped technology firm IBM to build a blockchain platform for the consortium in an effort to make global trade simpler and more streamlined for smaller businesses.
Community banks meet the millennial generation
More millennials are growing up and are planning to start their own businesses and will need help from banks to get their enterprises started. For community banks, in particular, a potential influx of millennial entrepreneurs represents an opportunity to adopt the faster payment solutions that younger customers expect. For the August Tracker’s feature story, PYMNTS spoke with ICBA Bancard President and CEO Tina Giorgio about why community banks, whose customer base largely skews older, should not take a “wait and see” approach when it comes to millennials and should invest in solutions that can broaden their customer base across multiple age groups.
Check out the August edition of the Faster Payments Tracker™, powered by NACHA, to read the feature story, along with a roundup of all the latest news and trends from around the faster payments space.
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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.