Payments Innovation

Payments 2016: The Year Of Ubiquitous Real-Time Payment Settlement

Real-Time Payments

PYMNTS consulted 21 payments executives from across the industry to share their insights on the biggest takeaways from 2016 as part of the “Payments 2016, The Year Of…” eBook. We posed the same question to each executive:

If you had to answer the question, Payments was the year of …, how would you answer, and how does your answer change your world — and the world of payments, more broadly?

Here is the response from BC Krishna, president and CEO of MineralTree

Payments 2016: The Year Of Ubiquitous Real-Time Payment Settlement

2016 was the year that the United States took a step toward a commitment to ubiquitous real-time payment settlement. The Federal Reserve Bank has led us to this place, and it is not a moment too soon. When you measure this development against the recent Association for Financial Professionals survey showing that B2B check payments by corporations have actually increased in the past few years, you realize that, for commercial payments, we haven’t had an effective alternative to paper checks.

Real-time payments have real benefits to corporations — enabling more precise timing of payments to take advantage of early pay discounts, optimize cash flow and reduce exposure to rampant check fraud.

But does the emergence of a true real-time payment settlement rail mean that commercial checks will finally start their decline? Not if we don’t address the attendant issues of security and tokenization, of ensuring that ubiquitous and easy access, and preventing deeply rooted parochial interests seeking to protect other revenue fiefdoms.
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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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