Amid Blockchain Uncertainty, Traditional Rails Drive B2B Innovation

Central banks continue to consider the potential for blockchain as a payment rail. Most recently, Japan Finance Minister Taro Aso spoke during a press conference, suggesting that other members of the Group of Seven (G7) may benefit from holding discussions on central bank digital currencies (CBDCs) and potential regulatory frameworks surrounding the technology.

But it’s been a wild week for digital currencies. From Tesla’s recent $1.5 billion bitcoin purchase to crypto crackdowns in Iran and Nigeria, blockchain’s future as a payment rail still has much to sort out.

In the meantime, payment rail innovators appear to be working with tried-and-true infrastructure. In this week’s roundup, PYMNTS finds innovation built on top of the card rails, as well as SWIFT’s gpi to enhance B2B payments and add value for both senders and recipients. Plus, Nacha boasts rising volume of non-check ACH transactions in a positive sign for B2B payments digitization.

Pelican Partners With SWIFT For Cross-Border Payments

This week, corporate payments technology provider Pelican announced a partnership with SWIFT in which Pelican will connect banks to SWIFT’s Low-Value Cross-Border Payment Service for small and medium-sized businesses (SMBs), as well as consumers. The account-to-account capability leverages SWIFT gpi services for global transactions. Pelican said in an announcement that its service for banks provides streamlined interbank fee options, as well as straight-through processing for faster transaction speeds.

Cashflows Bolsters Card Rails With Faster Settlement

Though the card rails can be beneficial in B2B payments for both buyers and suppliers, receiving card payments doesn’t necessarily mean a business will be able to access funds from those payments as soon as the transaction occurs. Sluggish settlement times can add a cash flow burden to small businesses, Cashflows CEO Amanda Mesler recently told PYMNTS. To address this challenge, the company recently announced Anytime Settlement. Using proprietary processing and settlement infrastructure, Cashflows can accelerate the time it takes for businesses to see funds from card transactions settled into their bank accounts. It’s a solution that can work in harmony with other rails in use by businesses receiving payment, she noted, like real-time payment networks that can similarly facilitate near-real-time settlement.

Nacha Touts Rising ACH Volume

Nacha posted new statistics last week about the growth of the ACH Network in 2020, noting an overall year-over-year jump of 8.2 percent in transaction volume. With 26.8 billion ACH transactions facilitated last year, the value of those payments — which hit $61.9 trillion — rose year over year by 10.8 percent. Driving that increase in ACH payment activity are some unsurprising factors. The pandemic-fueled increase in online consumer shopping, for instance, led to a 15 percent boost in internet-initiated consumer payments, while salary direct deposits also jumped 12 percent, in part as a result of work-from-home requirements. But B2B payments also saw a significant volume increase, with an 11 percent spike in ACH volume reaching 4.4 billion B2B ACH transactions in 2020. Nacha pointed to further evidence of digitization of B2B payments with the note that ACH payments initiated by paper checks declined by more than 21 percent, now accounting for less than 4 percent of total ACH volume.