The Right Time for Real-Time Account Funding Is Now

Narrator: 0:07

This is PYMNTS ON AIR, a PYMNTS Podcast. In-depth conversations, expert panels, and exclusive research brought to life by PYMNTS Intelligence. In this episode, leaders from Visa Direct, TabaPay, and OneUnited Bank will discuss why instant account funding has become a competitive must-have, the measurable business benefits of account funding transactions, and how to implement real-time solutions effectively while balancing risk.

John Gaffney: 0:41

Hi everyone, and welcome to PYMNTS TV. My name is John Gaffney. I'm Chief Content Officer here. Welcome to this special panel discussion titled The Right Time for Real-Time Account Funding is Now. Real-time account funding refers to the ability for consumers or businesses to move money instantly into a financial account. So the funds are available to spend or invest immediately. Traditionally, funding an account relied on slower methods, which could take hours or even days to settle. Real-time account funding uses modern payment rails like Visa Direct to move money instantly. And without any further ado, let me introduce our panelists. First up, Jim Slocum is SVP and Chief Information Officer at OneUnited Bank. Jim, tell us a little bit about yourself, OneUnited, and why account funding is important from a community-focused bank's perspective.

Jim Slocum: 1:34

Hey, thanks, John. I'm really psyched to be here with you guys today to talk about account funding. As John said, I'm Jim Slocum. I'm the Chief Information Officer here at OneUnited Bank. For those of you who don't know who OneUnited is, we are a community development financial institution that is headquartered out of Boston, Massachusetts. But we have a customer base that's a national footprint. We're actually the largest and only nationwide black-owned bank in the country. That said, I've been here at the bank for over 20 years now. We've been building out a state-of-the-art uh financial technology platform that we leverage to take care of our customers. So who are our customers and why is online account opening so important, real-time account opening so important to them? So for those of you who are familiar with bank, you'll know that we focus on financial literacy. And what we focus on is helping our customers who are living paycheck to paycheck and have struggles managing their finances, right? We recognize that they're the most vulnerable in our population and the most in need of help of financial uh services that are geared towards uh helping them reduce their financial stress. So, as I said, I've been here for over 20 years now and working with uh the management team at the bank on putting together financial instruments and services that are geared towards helping reduce that overall stress and put a focus on financial wellness for our customers. One of the things that we focus on is bringing together their data, whether it's at our bank or at other institutions, and bringing it together underneath one umbrella to help them truly understand their finances. We recognize that a lot of our customers are living paycheck to paycheck, and the cash flow and availability of funds is really important to them in their daily life. We also are serving a customer base that's been excluded from the banking system. As you know, a lot of a lot of individuals run into problems with banks and end up in systems like check systems where they're excluded from the banking system. And we really do put a focus on bringing financial instruments to the table that allow our customers who are underbanked to be able to re-enter the banking system. So that's part of, you know, when we talk about account opening, those are the problems we're thinking about solving and the reason why, you know, that availability of funds is so uh important.

John Gaffney: 4:06

Well said, Jim. Next up, Tim Astanov is Chief Product Officer at TabaPay. Um, Tim, tell us if you could why you're focused on enabling real-time funding via debit card for your clients.

Tim Astanov: 4:20

Thanks for the intro, John. Uh good to see you guys all. Um why important? Um, well, let me tell you a little bit about TabaPay. Uh, we are a payment processing platform um focused on uh money movement use cases. And as such, e-common funding transactions specifically um is one of the fastest and largest um uh portion of our business. Uh we've uh we've vertically integrated, so we're connected directly to uh Visa and other networks. Um we're roughly about 66 uh CMP acquired in the United States with a connectivity to all payment rails in the states. Um because of our focus on money movement, we um we're not traditional PSP, so our volume looks like 50-50, 50% being pool transactions as we define them, or some may think card acceptance, um ACH, debit, and et cetera. And roughly 50% uh push transactions. And as I mentioned, AFT is a huge uh portion of our business, uh, and uh and on the pool side at least of the equation. Um, partially because um a debit card is uh at least according to our customers, a preferred form factor for their customers, um, as well as um and just simply easy, right? So every every person has a card in their pocket from a form factor perspective, and uh we take care of all the rest.

John Gaffney: 5:51

Interesting. So our third panelist today, Jakub Petri, who is the VP Global Sales and Partnerships for Visa Direct. Um, Jakub, why is real-time funding such a critical focus for Visa Direct?

Jakub Petri: 6:04

Hello, everyone. Thank you. I'm glad to uh see all the participants here, and uh thank you for having me. Why is it important to have real-time payments? Um, first of all, a little bit about my team. So we are focused on uh Visa Direct uh sales, uh specifically to banks, credit unions, uh brokerage firms, neobanks, and other fintechs, and we help them launch real-time money movements, both domestic and cross-border, um, as well as uh money movements pulling funds from a bank account or pushing funds to the bank account. And why is it important? John, I don't think the fast payments is the future, I think it's the present, right? And um, I think the numbers, uh the feedback we get from customers, the surveys that we did in the past show exactly what we expected. It's over 80% of uh bank customers expect real-time payments, either at the time of funding an account, new account or existing account, or when they need to push funds to somebody else or to another business or um whatever the use case may be, they expect the money to get there fast. And so that's why um we believe that this is a really important topic for the banks and financial institutions, credit unions, and that's why we are here today.

John Gaffney: 7:32

So, my understanding, Jakub, is that there you've established clear market demand for real-time money movement, and you've also established that there's a cost of inaction if a bank does not adopt this. Um, beyond just speed, what is your data show about the business cost in terms of abandonment or lost trust of a slow or failed funding experience?

Jakub Petri: 7:55

Yes, um, we actually did a lot of surveys. We got a lot of feedback from our clients over the past 10 years, and uh we showed that there is a real cost of abandonment if the new account, for example, is not funded immediately. Right. So um the the in general, 70% of surveyed customers um say access to faster payments through their FIs is something that um they actually expect to have, right? Over 74% survey customer may actually switch an account to another bank if their current bank doesn't offer real-time payments. So numbers are not surprising. Nobody wants to wait for their money anymore. In fact, nobody wants to wait for anything anymore, right? And so money is not an uh exception. And um, everyone knows that money moving uh in real time is better than money moving slowly, and that's why it creates demand for uh solutions like Visa Direct. Uh today's consumers are looking for instant gratification, uh, instant access to their funds, uh, if it's payroll tips, if it's you know, um account to account or person to person, business to business, etc. Um it's very clear that everybody expect except expects uh real-time money flows. Yeah, that's a bet.

John Gaffney: 9:25

Um so Jim, over to you from One United's perspective, how do you use account funding transactions and what use cases have you seen come to the fore for using them?

Jim Slocum: 9:35

Yeah, sure, John. Let me um let me let me just start by giving you just kind of a sense of you know our journey to the space where we started using account funding. Uh OneUnited's been opening accounts online since 2005. Um, you know, over so over that period of time that we've been doing this, you know, we've learned a couple of things. And and I'd say we've we've learned the lessons the hard way over time. Um but that said, you know, we were one of the first ones to pioneer using card funding um during our account opening process. I think we started back in 2017. Now, the reason that we did that is because of what Jakub was talking about, the fact that there's like a real cost uh and a real impact to not having the real-time funding. You know, we were seeing the fact that we were getting an onslaught of customer calls asking where their funds were when you know they had applied for a new account. Uh, we were constantly, you know, chasing down transactions that would be failed or pushed back. Um, and and the result was is that we were having a poor experience for our customers. We were causing a strain on our customer service area, and the overall experience was just poor, right? So uh when we moved to card funding in 2017, it was kind of like someone threw a switch somewhere. You know, all of a sudden, 95% of our accounts were funding um, you know, through the card. Um and, you know, really, you know, the the difference was that we were now in a place where we were able to uh identify that the customer had the funds, you know, to open the account uh before we get all the way through the process and all the headache of like asking them for all their various levels of identification. You know, we're able to know that that's going to be a good thing up front. We're able to streamline that overall experience. So, you know, for us, the the pivot to card funding was a really important one from a user experience perspective and a customer service perspective as well. Um, so you know, the way that you know we've kind of kind of gotten here, you know, is is that we're now in this space where we're moving into a uh a need to not only validate that the card that's funding the account has the funds, but also move into a space of delivering those funds to our customer. So we're moving to this account funding transaction model, you know, which allows us to have that two-step transaction flow as part of our account opening. So that what we're able to do is we're able to, at the start of an application, validate that the card has funds. And then at the end of the application, when we've gone through all of our various identity checks and validation checks, we're able to capture that transaction in real time. And because we know that the funds are going to be settled, we're actually able to move the funds into our customer's new account uh, you know, when we capture the transaction and our customer's account is fully funded. So for us, you know, that that mechanism of being able to integrate a better experience for our customers and get them an answer of whether their account is going to fund while they're applying, and then being able to fund them at the end of the application process, you know, is has really been an instrumental change, you know, to the way that we've uh been able to execute. And the reality is that we've only been able to get there because of the fact that we've had partners like Tabapay as part of the process where we're able to plug in their API framework to be able to get that kind of information in real time and at scale. Um, so for us, you know, that is, I think, the power of what this type of transaction and real-time network brings to the table and partners like TabAPay are able to deliver.

John Gaffney: 13:17

So I'm I have an early question from the audience for you, Jim. Um, could you talk more about the two-step transaction flow and how do you manage fraud risk as a result?

Jim Slocum: 13:27

So, as I as I talked a little bit about, you know, that concept of being able to know that the the card is good before you um you know start processing the application um or or really process the application is uh is of critical importance. I'm just gonna back up and try that again. Sure, John. Let me um pull up this slide that I I was planning on talking about a little later, but I'll talk about it now. Uh so as I said, part of our process is to identify that the card is good earlier in the application process to validate uh those funds are going to flow through the application, and we are using the concept of being able to authorize the card in one part of the transaction and then capture it in a second. So, in our workflow that we've built and optimized over the years to be more of a waterfall flowing uh type call-out where we're integrating our third-party partners, our customers are filling out our application that is that we built out on the Salesforce platform and we're collecting their basic information. And then what we do is we do all of that kind of validation of data and initial screening, whether that's kind of doing a digital fingerprint and uh checking for velocity type items. And then what we do is we then pivot and we start utilizing um the Tabitpay APIs, right? We we we do kind of an AVS AI check to validate that the name and address on the card match that on the application. Uh, and then what we're able to do is we're able to authorize the transaction that will eventually fund the customer's new account. That allows us to be ensure that all of that is there, thereby reducing the cost of what we consider to be kind of the comprehensive verification that therefore follows, whether those are our things like KYC checks or uh you know, retail banking history checks or um you know um advanced device risk scoring or things of that nature. Uh so we're able to reduce our long-term, our downstream costs by being able to identify uh individuals who won't be worth won't be able to fund their account anyway, uh, and in that step three. Once we do kind of those comprehensive verification checks in step four, we're able to move to step five and make an instant and real-time decision uh about the application, and then we are able to settle or or or capture that transaction that we had set up in the authorization state. The result is that we know now that the capture of that card was successful, the settlement of that card was successful, and that the funds are now going to be flowing into the bank. So we're able to immediately initiate the transaction on our core system and fund that brand new account in real time. So for the customer, they now have taken the five minutes maybe that it takes to fill out the application, and within a matter of seconds, you know, we've done all of our heavy due diligence on them and we've captured the funds and we've put it in their new account. So now our customers are able to log immediately into our mobile application where their digitally issued card is is available for them to add to their wallet. So we're talking about a five to 10 minute process here where people are able to get a new uh account with us and establish a relationship and have a fully functioning account along with a card and wallet. So I think that you know, the the power of being able to fund these accounts in real time really changes the expectations of the customer uh for what they should expect from other banks. And you know, we're really proud to be bringing this to our customers because it's it's it was a long time coming to be able to be here in this space.

John Gaffney: 17:07

Jim, very well said, and thank you for the agility. Appreciate it. Um so let's go to Jakub now. We're gonna start talking about the technology. Let's start talking about business value. Um, Jakub, let's step back a little bit. What is an account funding transaction? Um, and how should I think about that in turn in the context of other kinds of transactions?

Jakub Petri: 17:30

Sure. Thank you for your question, uh John. I think um you should think of a uh AFT transaction like a purchase transaction on steroids. So when you take your card to a store or when you present your card online to purchase a service or purchase a product, it's it's a poll transaction, real-time poll transaction where we pull the funds from a bank account and we give it to the merchant. In an AFT environment, it's um a very similar process. Uh, in fact, it's a very similar uh call out in a very similar format, uh, where we basically uh the customer presents uh in in this particular case to one united, they present their debit card from another bank, right, in order to fund their uh their account at one United. They enter the debit card information. It could be a 16-digit number, CVV, and expiration date. One United then sends it to us through a partner like Talapay, and then we reach out to the customer's bank, we uh verify if the account is open, we verify if it's in good standing, we verify if the funds are there, we block the funds for this transaction so it cannot be used for anything else. And if the transaction is authorized, we come back with the authorization number, which takes a second, just like at the point of sale, and then you know at that time that the transaction is good, and you can update the balance immediately in your bank account. You eliminate any chances of a stop paid returns, account closed returns, and NSF return. Those are returns that are very frequent or frequent in an ACH environment, which simply do not exist in our area. If there is non-sufficient funds, for example, in the bank account, when we reach out to the bank, we immediately can decline the transaction for that reason, for NSF reasons.

John Gaffney: 19:32

So, Tim, over to you now. Tabapay processes millions of account funding transactions per month. Can you talk about some use cases you've seen with your customers and talk about some optimization opportunities here as well?

Tim Astanov: 19:44

Yes, of course. Thanks, John. Um hopefully next time we connect you. Uh I'll tell you it's a million transactions a day. Um, but to answer your question, we have um a few um different use cases we see uh both in a consumer and a business space. Let me start with the consumer space. In a consumer is primarily account-to-account, or as we call it, a meet to me transaction, where uh effectively uh an individual owns two bank accounts with different financial institutions and they move money between those accounts using account funding transactions. Uh the second use case or application is P2P. Um within if you start breaking down those use cases, you could go. I I think Jakub mentioned a few already uh a brokerage and a bank account. Uh effectively, this transaction can apply uh to any account. So it's a as long as it's an asset account, not a liability account. So think of um DDA, savings, um, brokerage accounts, um wallets, crypto wallets, and beyond, prepaid accounts. Um, and in a P2P space, it uh can apply both for domestic P2P players as well as cross-border P2P players. Um a business side, we see uh we're starting to see adoption and traction uh among small businesses and primarily driven by platforms such as on-demand payer, uh tipping, um uh as well as a payable use cases. But it's all essentially a platform uh using account funding transactions to take money from uh uh from a small business, and then on behalf of the small business, disperse this money to the employees, contractors, and beyond. Those are the use cases. Uh, as far as optimization, I think Jim shared the perfect uh view of optimization of how they're leveraging our platforms, uh, our platform. Um there are a couple of things to call out, and I think Jakub walked you through of what the countfunding transaction is. Um, and it's like purchase on steroids, I think the term was used. Uh, but in addition to steroids, there's a ton of different controls that car networks built in place, uh, Visa specifically. So it's not really a purchase transaction, it is a dedicated transaction to, and it has a ton of different control and ring fences around it uh to be used as a money moving transaction. Um it's just like if you were to walk, walk into Target, let's say you you bought a shirt and you walk out with it, um, you get another Target gets a real-time authorization, uh, so which is a secret weapon of account funding transaction. Uh, in this case, it's very it's exactly the same way, but the settlements actually happen on a T plus one basis. And what it means is in case of Jim, Jim's example, um, they get a real-time authorization. Uh, I'm gonna skip the every all other portions of the journey that he described, but then um then uh we or our requiring bank effectively uh sends Jim a payment on a T plus one basis the next day, uh for simplicity's sake, which means uh Jim has to uh offer, I wouldn't call it the line of credit, but the pre-fund the money for consumer to use right away to get to that experience where within five minutes, not only you you open account, funding account, and you can start spending the spending the money in that account. Um so on a T plus one, we have a slew of um direct integration with the different issuer processors, where to prevent that, we can actually use two-sided flows of visa direct transactions. We can do account funding followed by a credit transaction directly to the account. And the single message was designed primarily by the card networks, was designed primarily to use um uh think of uh pin transactions, right? Where you actually authorize and capture at the same time. Uh in the in a dual message world, you have authorization and whole time, and then within a period of time, uh the capture follows, means with uh in this case with Dream's uh use case, would walk through walk through precisely that flow so they can authorize transactions, effectively reserve the money. And then uh five minutes later, when all the check checks um uh were conducted and uh and effectively they have a green light from the internal teams to open the account and fund the account, then they they they do they perform a capture. Uh that's one of the ways to optimize it. But in addition to that, I think at least from our perspective, we have again, there's a plumber of ways how to optimize for a particular use case, um, where we leverage our expertise, uh, both even helpful on the fraud mitigation side, uh, authentication side, but also a slew of different valued services that we provide. The combination of those valued services such as AI, AVS, 3DS, and Apple Pay, Google Pay, and everything else you can think of of when you experience it uh during the purchase in app purchase example. Um, all those tools apply to account funding transactions. Um, and again, we have a we've been in this for eight years or so. I think we're probably one of the larger processors of account funding transactions. So we have a ton of expertise in-house, plus uh ton of value services that's available to our customer, plus uh reachability to process across multiple networks and have single message and dual message allow us to solution something very specific to the customer.

John Gaffney: 25:09

So, Jim, any comment on what Tim was saying about dual message and single message approaches?

Jim Slocum: 25:14

Yeah, you know, I I was uh I was kind of smiling when uh Tim said that uh dual message is like the secret sauce of account opening. Um, I would 100% echo that. I mean, that is like it's the magic that makes a lot possible. I mean, you know, for us to know for a fact that the customer is going to be able to fund their account so early in the process really allows us to very quickly get the right kind of messaging back to our customer and wastes and eliminates all of those waste cycles downstream. I mean, the number of wasted cycles I had in my my service fulfillment area, just chasing down customers to get information and then only to look up and have accounts not fund. I mean, it's it's been um it's been game changing for the optimization of our workflow process. Um and, you know, I I know I I talked a little bit about kind of that real-time aspect on the other side. That's also immensely important. But, you know, if I were trying to do that only in a single transaction, you know, we really would not be able to kind of take advantage of those efficiencies.

John Gaffney: 26:18

So, Jim, let's stay with you here. Beyond the obvious benefit of speed, what are were there any surprising outcomes you observed at one United after launching AFTs?

Jim Slocum: 26:28

Yeah, you know, I think um the the most surprising thing to me was the reduction in call volume um into the call center around where's my card? Um, or why why do you have my money? You know, it's you know, when as I said kind of in my opening remarks about, you know, the the the fact that we service customers who are living paycheck to paycheck, you know, sometimes the money that's funding their account needs to be used right away, you know, and and it becomes really those those lag times in the process. I talked a bit about the lag time on the funding on the ACH side, right? Like that causes uh that was causing a slowdown. The second thing that was causing a slowdown is we're a digital bank. We've got digital customers. You know, we've got a we gotta solve for the person isn't standing in front of us to get a temporary debit card, right? We got to solve those kinds of problems. So for us to be able to uh leverage the AFT transactions to fund the account in real time, that means that now we're able to use those other tools like digitally issued cards and the ability to from my mobile app hit add to wallet. You know, now we're actually giving our customers that card, you know, in that same moment. And the result has been that like I don't get anywhere near the number of calls we used to get with when is my card going to get here? Like we don't get that call anymore, right? We've solved that need because they they can go into or go into the app and get their card number. We've solved that, you know, need of being able to use the money on their account, you know. So I think that for us, you know, we we knew that was important and we knew it was an area of pain, but I think that like when we said we were gonna go get account funding done in real time for people, like it wasn't quite understood the magnitude of the impact that that was gonna have on the overall customer experience and our call center for those inbound phone calls. So I think it's changed a lot, um, a lot more than I think we were anticipating.

John Gaffney: 28:24

Let's let's shift to the how. Let's talk about how to build a successful program here. And uh, Jakub, I'd like you to tell me a little bit about your partnership with Tabah Pay um and how it drives innovation. Could you do that for us?

Jakub Petri: 28:37

Of course. Of course. So we spend a lot of time about uh fast money movements, right? And uh uh Tabapay does it um uh really, really well through the card networks, such as Visa. Um but it's not only about moving uh just the money, right? There is uh value add services that are also very important, and you don't have to use a value add service on every transaction. In fact, we would probably recommend not to, but in some cases, you do want to use certain value add services, either for to improve user experience or maybe to improve authentication or to do step up authentication. Um, I will give you an example of one product, for example, AI for account name indicator. Um, when you do your first account funding transaction, you never saw that card before, that card was never presented to you, which happens all the time when you actually open a brand new account, right? Um in that case, um you can use an AI service to link the first name and last name to the actual pen number of the debit card, and we will come back to you with the actual match uh responses, match indicators, match, no match, or partial match. To basically help you identify if that car that you are presenting is actually matching the person that is trying to open an account.

John Gaffney: 30:10

Okay. And Tim, but I'd like to ask you a similar question. Can you tell me about why you're partnering with Visa and how it puts you in a position to manage some complexities for your clients?

Tim Astanov: 30:23

Yeah, we generally speaking, we think of our business as a payment service platform. It's um for us, or payment processing platform, for us is um we need to make sure that clients like Jim uh have access to any rail they want, any any uh form factor that their customers want, which means in today's world, at least, primarily in the United States, is bank accounts and the cards. Um, as I mentioned before, cards are becoming extremely popular for this particular use case. Um and uh the way we do it, so I have a slightly different approach. Uh, from our perspective, in order for us to enable all of that, uh, we have to do this reliably. So we connect, we basically connect directly to every single network, both global networks as well as um as well as regional networks. Um, we don't believe in middlemen. Um, and doing so, which means we can maintain uptime for five nines uptime, which is considered to be best in class. Um, in addition to that, when um uh there's a lot of uh there's a lot of operational uh complexities managing all available networks in the states, and we have quite a few of those, uh, among with uh roughly 20 sponsor banks. Um so our focus is to make sure that settlement, uh settlement, reporting delivery, uh, transaction flow, it's always there for clients. Uh, that's the core. But then the rest of our our days, at least, we're thinking about um how do how do we maintain that balance between, I'm gonna call it a sale and and uh and a fraud, right? That's pretty much the rest of our occupation on a daily basis. Um so to answer your question, using the tools um uh combination of reach, reliability, the know-how with laser focus on money movement, uh, for us at least resulted in a meaningful scale. And from a partnership perspective, we continue to expand um uh partnership with customers with partners like Visa. Uh, we've been experimenting at the moment with something called tap to um add a card or tap to verify a card. Imagine the experience where we can um in today's world, someone has to type in a number provided they choose not to use uh Google Pay or Apple Pay. Um in tomorrow's world, imagine you can simply take your device with your app, you can open one united app, and you can tap your existing debit card onto the card. We effectively suck the information out. We've already validated and triple check that this is a legitimate card with legitimate chip, and uh moving forward, you can start transacting using the payment credentials. So as I said, um there are there are a plough of net new uh existing tools and a net new that will be uh edit. Okay.

Jim Slocum: 33:21

Tim, you might if I jump in there for a second. I you talked about the tap to add card, and you know, I I I'd heard you guys talk about this in in you know meetings in the past. I saw it happen for the first time with my daughter, and she tried to add her card to a wallet, and it she had the tap to add technology. It was so fast, it was so impressive, and it was so futuristic. So to hear that you guys are working on adding that, I'm super excited to get there. And uh you can sign me up to be with you.

John Gaffney: 33:48

So, uh Tim, um, I'd like to stay with you here and and and or back to you after after Jim's nice comments there. Um, could you talk a little bit about competitive pricing, risk tools, and management in terms of this partnership with Visa?

Tim Astanov: 34:02

So the risk tools, uh, I think that the the hopefully the newest edition will be the top functionality that will certainly help uh mitigate fraud. Uh we we have uh we have a big hope for it. Um, in addition to the tools that I've mentioned. So think of Apple Pay and Google Pay that always uh require an extra provisioning, uh which means it requires um another step up or a bump uh uh on uh for the fraudsters, uh which is challenging to overcome. Um the the tab functionality that's coming soon. Um we have a plumber of proprietary tools, um, duplicated card checks, uh uh real-time transaction monitoring, alerts, blocks, uh, and beyond. Uh, in addition to AI, which I think last time I got statistics from my team uh since inception, which has been around about a year now. Um, I'm glad to see the propagation among the issuers or issuer adaption of AI. Uh, network is a complex business, you have to manage kind of two sides. Um, and um I think we already did roughly 20 million AI validation, which is very impressive for a fairly new product that's been released by the networks. Um, so it's it's loved and adapted by the customer today. So uh that's probably around the risk side. It's again, we need to a combination with um a strong CIP uh plus the buffer of risk tools that's available for a particular flow. To Jakub's earlier comment, you don't need to use it on every single uh transaction or for every single user. But um uh it is nice to have all those bells and whistles that effectively try to uh at least mitigate your risk. Uh and risk one of those things that you can uh it's like a balloon. You squeeze it on one side, it comes out another. Um, so it it's we think of it as a layer approach uh between our tools uh and controls that we can provide, in addition to clients' controls and tools that already have in place. Um and uh ultimately monitoring. We have to constantly watch and make sure that we don't see anything abnormal behaviors. And if we do, we reach out to the clients proactively and letting them know that we see something suspicious. Perhaps we should collectively put the heads together and figure out what's going on. Um that's on the risk tools. On the pricing, um, I've mentioned we're vertically integrated. Because we don't have middlemen in the process, in a processing, uh, we control the entire stack from uh from end to end. Uh, it's much easier for us to control the price points. We're small, nimble, and super efficient. So then it comes down to margin just like any other business. Uh, but because we're we're in a money movement space, our primary competition, to be honest with you, is ACH. Um so we don't look at the pricing just like normal acquired processors do, uh, at least in case of uh card networks. Uh, we look at pricing very differently because for us it's all about transactions, the high throughput of transactions that's what we're aiming for. So uh pricing is not an issue and can be managed.

John Gaffney: 36:59

So, Jim, let's talk about integration, um, and which you're gonna have the most experience with here. How important was it to have an implementation partner to manage the moving parts and allow your teams to stay focused on the core product?

Jim Slocum: 37:14

Yeah, you know, I think that, you know, one of the things I've learned over the years is to have you know good partners around you as you try and tackle any big projects. You know, one of the things that I think has been immensely helpful in our our implementation process, you know, has been having a partner like Tabape at the table to help us through, you know, kind of this area. Well, we've been in the space of doing account opening for decades now, right? I mean, it's not every day that you switch, you know, you switch partners who are going to process your card funding. Um, you know, and in that process, Tabape, you know, has a uh tremendous um, you know, outline for us. They set up the roadmap, they had, you know, the established processes that we were able to follow. And, you know, for us, that really accelerated our ability to get the solution in, you know, and make it successful in our implementation. They also brought to the table some of those best practices. You know, I like to think that we know we know a lot, but I know I don't know everything. Um, and you know, it's it was fantastic for us to have them, you know, be part of it. You know, I heard uh Tim just mention a couple of the tools that you know he he was mentioning the the duplicate kit account checker or the the real-time transaction monitoring, you know, um those those are great tools, but you need to know how they really work and you know how to really implement them, right? So um, you know, their expertise coming to the table and in kind of how we fit those things into our workflow, you know, allowed us to free up our team to focus on getting, you know, our customer experience right, you know, which was, you know, to us probably, you know, one of the more important aspects of the rollout and changes we were executing for the account funding. So um, you know, I think part good partners help you accelerate um and and make you successful.

John Gaffney: 38:59

Excellent. Um second to last question, we have a couple of questions from the audience. So uh I encourage everybody to hang on here. Um, but I do have a final question for our panelists. Um Tim, I'm gonna start with you. What's the single most important piece of advice you would give a client before they start their AFT journey?

Tim Astanov: 39:18

Um, you know, if we stick to customers um or clients that focus on the common funding transactions, my probably the most important message will be um I have yet to see a client who started with us on the common funding journey and did not expand beyond that. So um if you're looking for a partner, you should probably, whether it's a Tabape or any other partner, you should think about um, you can start with the F flow. You want to find a partner who have robust tools and services available uh for you, but you also want partner to grow with, which means um beyond the typical comments from process, probably would be reliability and et cetera, it's uh ability to support additional flows, right? I will not be surprised if Jim and Team will call their appropriate representative and or me and simply say, hey, we've we've seen this uh unbelievable adoption experience on the crowd funding side. Um now we have we want to have the same experience on uh to allow customers to withdraw money or pay bills or something else, and something else. And uh I've been with Tobapay for five years now. Um I am one of the early employees, and I have yet to see a single customer who who's stuck with one flow. I mean, you just on this on this call, you saw Jim raise his hand and say, Well, whenever you're gonna have XYZ feature available, I think we're stuck to that. Let me know because I'm I'm in, and that's a valid service. I'm referred, I'm referring to actual flow itself, net new use cases, and et cetera. But it's a debt repayment and beyond. So yeah, anyone who is contemplating of enabling um uh or partnering with a processor, at least, you should you should definitely think about uh not only your needs today, but also your needs tomorrow.

Jakub Petri: 41:07

I agree with Tim. I my experience is the same. Um clients uh first turn on AFT for account funding, then they do uh reoccurring deposits in real time. Then just like Tim mentioned, they do real-time withdrawals from the account. Um, then they expand from DDA account to CDs for one case, um brokerage accounts, et cetera, et cetera. So yes, I definitely see this um same same behavior that Tim just uh described.

John Gaffney: 41:38

Okay, excellent.

Jim Slocum: 41:39

Um, Jim, do you have any uh advice from your peers on AFTs or Yeah, you know, uh uh I think that the most important thing to remember when you're going into this is that the reason you're doing it is to get your customer a better experience. So really think through how you can best leverage that secret sauce that we were talking about earlier to smooth out the process for your customer. They're the ones that are important. You're out there competing with the experiences of the the Starbucks type app. You know, you need to deliver something amazing and seamless. And I think that if you take advantage of that, you know, secret sauce of getting the real-time funding into their account, I think you're gonna have some happy customers.

John Gaffney: 42:23

Very good. Jakub, you you get the last word on uh on advice for your potential clients here.

Jakub Petri: 42:30

Um don't wait. Don't stay behind. Uh um I yes, um, I think this is the uh the most important advice. Um don't stand behind. Um you know, if you are customer-centric and you care about your consumers, either individuals or businesses, uh turn on instant funding, uh, allow instant money movements, domestic cross-border. Um, and we are here to help.

John Gaffney: 43:00

All right. I have two questions from the audience here. The first one is for Tim. Tim, what is ANI? How does it work? And is it significant for account funding?

Tim Astanov: 43:10

Effectively, think of anytime again, because we are money in a money movement space, I think AI is extremely important for us. And uh what it means is because we're moving money from one asset another to one asset account to another asset account, at least when it comes that comes to account funding transactions, um, most of our, I'm gonna call it a merchant or originators are actually um KYCing or their customer. So imagine the use case where um I've um I've opened an account with Jim. Jim used to KYC me. Um, he can he can KYC me, but in order, there's a ton of different tools that frosters use these days. Um, and you can you can buy a plumber of credentials to stolen identities in the market. Um, let's say KYC came through and everything is looks okay to Jim and his fraud team. Um, then Tim, I am adding uh my my card credentials uh to to do a countfunding transaction. What uh the tool does if uh it compares it compares the KYC data, or originally what Tim input it as his first name and a last name and a middle name, I believe. Um and then um I also added the card. So now Jim and Tim can simply ask Tabapay to reach out to appropriate card networks and uh invalidate that the name on the card is actually matches matches the KYCM file that they have. So in this case, it's a it's again is a double confirmation that the person um who she or he says uh he is. Uh I think that's right. Um so if you think about um if I stole the your credentials, maybe my my actually, so that's one way is to validate that I am who I say I am. Uh the second path is I stole Jakub's card and I'm adding it to my own account, right? So if uh if if the name of the card is actually Jakubs, but my QIC, which has been validated, says uh this is Tim, uh, it should certainly raise flags for Jim and Tim. Um because most likely it's gonna follow with a chargeback of some kind because um Jakub's going not recognizing the transaction, gonna call his bank and saying it wasn't me. Uh so there it has a multiple application, both from authentication of a user as well as a fraud mitigation tactic. So it's been an extremely uh powerful tool in our uh tool set.

John Gaffney: 45:28

Jakub, question for you from the audience. If AFTs move money from asset account to asset account, can they also be used to load money into a merchant-specific or a restaurant-specific digital wallet like Starbucks?

Jakub Petri: 45:41

Um thank you for the question. The answer, the quick answer is no. Um loading uh funds into a gift card or a card like uh like you mentioned Starbucks, um that is uh not a permissible purpose uh transaction for an AFT. Um that is actually a purchase transaction because you are loading a uh a card that can be that is used for a single type of use, which it can be only used at that merchant. Um, in order to qualify for an AFT, you have to load the funds into a multi-purpose uh account, like for example, a DDA account or a wallet that you can use to spend money um at different merchants and in different locations.

John Gaffney: 46:29

Okay, thank you. All right, that's gonna do it for this special panel discussion called The Right Time for Real Time Account Funding is now. And I'd like to thank our panelists. First, Jim Slocum, SVP Chief Information Officer at One United Bank. Jim, thanks for joining us.

Jim Slocum: 46:45

Hey, thanks, John. Thanks for having me out here.

John Gaffney: 46:47

Tim Astonov, it's been a pleasure. You're Chief Product Officer at TabaPay. Thanks for joining us.

Tim Astanov: 46:53

Thanks for facilitating the great conversation, John. I've learned so too.

John Gaffney: 46:58

Yeah, great conversation. All right. Uh and Jakub Petrie, who is VP Global Sales and Partnerships of Visa Direct. Jakub, thanks for joining us.

Jakub Petri: 47:06

Thank you for having me.

Narrator: 47:11

That's it for this episode of the PYMNTS Podcast, the thinking behind the doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode at pymnts.com/ podcasts. Thanks for listening.