Necessity is the mother of invention, goes the saying, but in payments, sometimes invention evolves into necessity.
Or, put another away: Why didn’t we think of that?
Transaction pain points are often so deeply ingrained in process that they become endured with a shrug.
Until someone, or some firm, comes along with a better way of doing things that is so simple and convenient upon unveiling that it offers a new level of standardization that proves a boon for all parties involved.
Hence the recent announcement of the 2017 NACHA Payments Awards, which seeks to spotlight innovation and advancements in payments technology, which this time around was predicated on proven accomplishment in advancing electronic payments and finding new ways to leverage Same Day ACH.
In an interview with NACHA President and CEO Jan Estep, PYMNTS’ Karen Webster delved into the commonalities of the innovations showcased at PAYMENTS 2017, and a couple of this year’s award winners: Earthport and lienwaivers.io. Though each do different things and serve disparate audiences, the focus has been, as Estep noted, on making payments “cost efficient, making them more transparent and making them more reliable … at the conference we really wanted to focus on solutions.”
For Earthport, for example, she called out the international focus on payments done on an international scale, with high-volume and low-value transactions as a key area of expertise, “expanding across different countries and territories and currencies.”
One of the other award winners, lienwaivers.io, is solving a problem that goes beyond “can you make your payments faster,” Estep noted.
In this case, lien waivers are manual and labor-intensive processes within the construction industry, where the award winner “knew that as a business problem. Then they took the steps to integrate the lien waiver creation into accounting packages, combine that with the ability to send them [the waivers] electronically for signatures … and then integrated streamlined payments via Same Day ACH.”
The end result has been a cloud-based software-as-a-service application that allows business owners to make a Same Day ACH payment through their existing bank portals. In essence, she said, this is not just a classification of a transaction simply as a B2B payment, but one where a story of an industry with a problem results in a solution that solves their problem and similar issues for others.
It is solutions like these that provide a glimpse into use cases where payments solutions overlaid on top of already existing rails can solve long-standing but perhaps less publicized inefficiencies.
And all of this is about taking away pain points, Estep told Webster — and, of course, the extant question is, “how do you do that? Maybe in rules, which is what NACHA does, but I think it is also in tools, which is why … we are focused on things such as a third-party certification program to make sure all players in the ecosystem are understood and vetted, and why we are focused on API standardization as a way to help the industry become more efficient” as it attempts to negate those pain points.
Also, ubiquity remains “critically important,” said Estep, because it can help eliminate “extra steps” and the “angst” — and seamless flow of information and protocols help bring new solutions to markets, rather than having individuals abandon efforts at innovation. “I think ubiquity solves a pain point,” she said, taking out the guesswork about how payments can get to the recipients for which they are intended.
“I’ve always talked about the ACH Network as ‘skinny,’” Estep told Webster. “We provide the rules, we provide just enough functionality so that every bank account in the U.S. can be reached. The ubiquity is there at a very thin layer. That leaves the solutions and the tools up to everybody else. At PAYMENTS 2017, we saw so many different solutions, and this is reinforcing that direction [of building on top of the ACH Network].
“The greatest example of these new tools and solutions were [tied to] what we call ‘Faster Payments Center Stage,’” where presentations included “a pretty wide spectrum of solutions and each of them talked a bit about the different ways they were solving a problem in addition to speed.”
Dovetail, for example, discussed ways to enable banks, via gateways, to modernize their payments capabilities. Among others, InterComputer talked about how they were making payments secure, and SHAZAM talked about a government framework that would help “collaboration between organizations,” as Estep said, “connecting diverse systems.”
Estep also noted another company that was not a Center Stage participant, but is a NACHA Preferred Partner for ACH enablement and integration, Treasury Software. They, too, seek to solve a problem, and their concept is a simple one. That firm has integrated ACH into QuickBooks, with a focus on making ACH payments adoption easier for small businesses.
Touching on NACHA’s own ACH payments data, Estep told Webster that “the first quarter of 2017 is continuing the upward trajectory,” noting that overall ACH volume showed an almost 7 percent increase in first quarter 2017 over 2016’s numbers, coming in at more than five billion transactions in the latest period. The volume, she said, “is really equally spread” across all payments types, as debits and credits are growing equally. For Same Day ACH, she stated that first quarter over fourth quarter growth was 13.6 percent. So the growth, she added, continued for both what is considered “classic ACH” [next-day] and Same Day ACH.