Faster Payments

To Limit Or Not To Limit? The Instant Earned-Wage Access Debate

The looming specter of Brexit, and the trade war between the U.S. and China, are sending ripple effects well beyond these countries’ borders, impacting many other areas of the global economy. While these political developments insert new uncertainties and frictions into international trade, financial institutions (FIs) and service providers are working to ease some challenges in the space by promoting services for rapid cross-border transactions.

Recently, several FIs went to work to link businesses with the Single Euro Payments Area (SEPA) Instant Credit Transfer (SCT Inst) scheme for faster international payments in Europe. Meanwhile, the Reserve Bank of Australia and the Australian Payments Council are considering the migration of payment services to ISO 20022, which could bring them more in line with other countries’ payment messaging strategies.

The May Faster Payments Tracker™ explores these and other recent efforts to advance quick cross-border payments, as well as to encourage more businesses to leave behind legacy payment rails.

Around the Faster Payments World

According to reports, 80 percent of business-to-business (B2B) transactions are still made with paper checks. A company proposing to tackle this issue recently raised $88 million in funding to bring automated payments to small- and medium-sized businesses (SMBs). The company, Bill.com, will deliver the offering via its cloud-based platform.

Digital payments provider Checkbook is tackling a different legacy payment method: ACH. The company announced a solution intended to help businesses abandon ACH in favor of using Visa Direct to instantly transmit money into recipients’ bank accounts.

DBS Bank is focusing on helping merchants to get their revenues without a settlement wait. The company launched an app that leverages Hong Kong’s Faster Payments System and the Scan & Pay capability, enabling consumers to scan an in-store QR code to pay for purchases directly from their bank accounts. Merchants receive the funds immediately.

Bellco Credit Union’s Approach to Instant Earnings

Speedy access to pay can keep employees from having to take financial risks, like turning to payday lenders. That was an important cause for Colorado-based Bellco Credit Union, which decided to offer instant access to earnings to put staff on safer financial footing. Launching such a service was easier said than done, however.

In this month’s feature story, Bellco HR Payroll Administrator Theresa Sanders explained the complexities of choosing a suitable instant earnings solution, including how the FI reached decisions on how much pay to make available and when. For the full story, download the Tracker.

Deep Dive: Real-Time Payments’ Impact on Liquidity Management

The rise of instant payments is creating new complications for corporate treasurers.

Treasurers need to ensure that their companies have safe levels of working capital at all times, and the predictability of batch payment systems makes this an easier task. However, the instantaneous nature of real-time payment systems can throw a wrench into how treasurers calculate cash flow.

This month’s Deep Dive examines how real-time payments impact liquidity management, and how treasurers can adjust to operate successfully in this new landscape. Read more in the Tracker.

About the Tracker

The PYMNTS Faster Payments Tracker™, powered by Fiserv, is the go-to resource for staying up to date on faster payment developments and initiatives on a month-by-month basis. The Tracker highlights the contributions of different stakeholders, including institutions and technology providers coming together to make this happen.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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