Can Real-Time Data Render Credit Scores Obsolete?

The rise of faster peer-to-peer (P2P) payment services has had an unintentional ripple effect for businesses, banks and merchants. With customers able to send money to family and friends with a few taps of their smartphone, frustrations can arise when businesses are unable to deliver similar speed. As a result, firms that are lagging behind in faster payments investments could miss out on the full opportunities available in the global business-to-consumer (B2C) solutions market.

Several global financial institutions (FIs) appear to understand the opportunities and missed opportunities that faster payments can provide. The new Faster Payments Tracker highlights the latest faster payments developments from several global markets.

Around The Faster Payments World

Pakistan appears to be ready to launch the nation’s first faster payments service next year with the goal of aggressively digitizing its economy.

At a recent workshop, the governor of the State Bank of Pakistan announced that it will pursue the adoption of the National Payment Systems Strategy (NPSS) with the goal of increasing Pakistan’s GDP by 7 percent and boosting job creation in the country. Another goal of SBP’s initiative would be to promote the benefits of digital payments in an economy that is still highly cash-dependent.

In the United Kingdom, meanwhile, National Westminster Bank (NatWest) recently launched an application programming interface (API) service that is now available to more than 200 FIs across the U.K. The new service enables these banks’ customers to connect to the U.K.’s Faster Payments Scheme (FPS) using their existing infrastructures, even if they are not FPS members or based in the U.K. Customers can use the feature to pay their bills faster.

A new service from Fiserv also aims to offer faster bill payment services to U.S. bank customers. The new tool from Fiserv, known as CheckFree Now, enables users to pay bills using personalized suggestions and automated tools. The API-based tool was piloted by 10 U.S. FIs and can connect consumers to more than 600 billers. The company plans to offer real-time money transfers within the next few months.

Deep Dive: How Faster Payments Cure Healthcare’s Payment Ills

Billing issues are a common pain point in the healthcare market — and not the kind that can be cured with an aspirin. In fact, inefficient medical practices can force hospitals to track down payments and would prompt 47 percent of patients to seek medical treatments elsewhere. This month’s Tracker includes a Deep Dive outlining how real-time payments could offer the cure that both patients and healthcare providers need most.

Reducing Reliance On Credit Scores For Lending

The lending space is also prone to financial frictions that can arise if a borrower’s credit score is either unavailable or insufficient to issue a loan from an FI. The trouble with relying on credit scores, however, is they do not always present a complete picture of a borrower’s financial health. In the Feature Story, CEO David Evans of bank verification systems provider DecisionLogic explains how the company’s solutions can provide faster access to loans by quickly reviewing borrower’s financial data through their smartphones. To read the Feature Story, download the Tracker.

About the Tracker

The 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.