Faster Payments

Can On-Demand Pay Stop QSRs’ Employee Churn?

The faster payments landscape is changing rapidly, most recently with the U.S. Federal Reserve’s announcement that it will launch its own real-time payment and settlement system called FedNow.

The much-awaited decision dismayed large banks that regard a government-run system as unnecessary competition with their own real-time rail, The Clearing House’s Real Time Payments (RTP). However, the choice was in line with the overwhelming majority of feedback that the Federal Reserve received from its request for responses to the rail creation proposal.

The August Faster Payments Tracker details this new development, as well as other major developments hitting the world stage, from SWIFT’s instant cross-border payments trial to Facebook’s cryptocurrency foray.

Around the Faster Payments World

While the Federal Reserve dives into domestic faster payments, other players have been working to accelerate money globally.

Financial messaging service provider SWIFT, for one, recently tested an effort to send money instantly between countries’ real-time payment systems. It integrated its global payment innovation (gpi) instant service with several such payment rails, and in a recent trial, enabled a payment initiated in Australia to settle in Singapore within just 13 seconds.

Facebook, meanwhile, announced its forthcoming cryptocurrency, Libra, which some observers expect could be used as a global currency, thus potentially removing the need for foreign exchange. The social media giant itself claims Libra could help provide access to financial accounts for unbanked individuals, but some observers question the cryptocurrency’s ability to achieve such a goal and suggest other motives behind the project, such as an effort to collect more data.

Facebook’s cryptocurrency project requires regulatory approval, and, if it goes forward, it is to be accompanied by a 2020 launch of a Libra digital wallet.

Around the world, demand is high for faster payments services, with Latvia reporting strong uptake of its own instant payment system. The country’s central bank announced that the rail processed 5.1 million transactions between August 2017 and July 1, 2019, and is expected to become available to nearly all Latvian credit institution customers by 2020.

Find these and all the latest headlines in the Tracker.

Serving Quick Payments to the QSR Industry

The quick service restaurant (QSR) industry’s high rate of worker churn is a major — and costly — pain for employers. In 2017, the industry was burdened by a 132 percent turnover rate for hourly workers, which some studies say could cost employers about $2,000 per worker. According to Instant Financial founder and executive chair Steve Barha, quicker access to earnings could help convince workers to stick around.

In this month’s Feature Story, Barha explains what it took for Instant Financial to design an instant payment solution that could track and disburse not just wages, but tips too, and why the QSR workforce is especially hungry for such options.

Get the full story in the Tracker.

Deep Dive: The Challenges and Benefits of ISO 20022 Migration

Improved messaging can support the faster payment sending and processing necessary for rapid cross-border transactions, and many financial services companies are assessing the potential of the ISO 20222 messaging standard to accelerate their operations. This month’s Deep Dive examines the potential benefits and restrictions of ISO 20022, as well as the increasing push for countries to adopt the standard and the challenges and supports available for doing so.

Read more in the Tracker.

About the Tracker

The PYMNTS Faster Payments Tracker™, powered by Fiserv, is your go-to resource for staying up to date on faster payments developments and initiatives on a month-by-month basis. The tracker highlights the contribution 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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