ACI Worldwide: US to See ‘Fourfold’ Increase in Real-Time Payments

With the expanded use of the new FedNow service, real-time payments software company ACI Worldwide expects to see instant payments use rapidly grow in the U.S.

“We’re currently working with many domestic banks on real time implementations as well as intermediaries who serve as smaller banks and credit unions,” said ACI Worldwide President and CEO Thomas Warsop on the company’s second-quarter earnings call Thursday (Aug. 3). “Starting from a small base, we believe the U.S. will see a fourfold increase in real time payments over the next four years and it will include additional use cases such as credit line access, request for pay, buy now pay later and many others.”

ACI delivers services through licensed deployment and the cloud and has also paired its AI-powered risk-scoring solutions for a differentiated cloud solution to provide additional layers of fraud protection, he said.

“We don’t expect a meaningful revenue impact this year, but over time, we expect FedNow to be an important part of the payments ecosystem in the U.S. and beyond,” Warsop added.

The company also plans to expand its use of artificial intelligence from its fraud prevention and cloud solution efforts to its billing segment.

Warsop said the company is “expanding the use of incremental learning into the interchange management efforts in our biller segment and we’re seeing very encouraging results. We [also] have pilot programs to use AI tools to make our code development debugging and testing more efficient.”

ACI’s total revenue for the second quarter was $323 million, down 2% from the same period last year, according to the earnings release. Its Q2 new ARR bookings were up by $13 million, up 2% from the same period last year. Recurring revenue grew 5% versus last year, according to the report. Net loss in the quarter was $7 million.

During the earnings call, Warsop highlighted a partnership with Dock, a Latin American FinTech to provide what they call “Acquiring-as-a-Service.” This will allow non-financial institutions to take on the role of acquirers via a subscription process, eliminating the need for accreditation from card networks and Brazil’s central bank.

Scott Behrens, ACI Worldwide CFO, also reported on the company’s financial results for the quarter. “We continue to see solid growth in our recurring revenue, which is up 7% year to date compared to last year,” he said.

Going forward, ACI is focusing on concentration and areas that will deliver results, pointing to opportunity in the biller segment and citing its win rates and additional go-lives in the segment as drivers of success.

Shares of ACI were up 4.11% in midday trading, at $23.54 a share.