As if the coronavirus crisis wasn’t enough of a challenge for organizations still printing, cutting and mailing paper checks, the ongoing slowdowns at the U.S. Postal Service have added yet another hurdle to the payment method, which can affect everything from accounts payable (AP) to payroll to insurance disbursements.
With payment innovators looking to migrate B2B payments away from paper, a growing number of payment rails and technologies are helping to ease the pain of the shift. For some, that means embracing solutions built atop existing rails, or exploring new ones altogether. PYMNTS examines the latest initiatives that look to improve upon existing rails, or embrace new ones like blockchain and RTP.
RTP Expands Across FI Base
Financial institutions (FIs) in the U.S. are increasingly linking into the real-time payments infrastructure of the RTP network, according to a new survey by The Clearing House. Researchers found that 70 percent of demand deposit accounts are managed by FIs with access to the RTP network. Yet even more FIs have access to RTP as a result of third-party technology partnerships, a press release said last week.
“Through these technology providers, the RTP network is ready and available today for banks and credit unions of all sizes looking to provide real-time payment capabilities to customers,” said Russ Waterhouse, executive vice president of product development and strategy at The Clearing House. “Once a financial institution is ready to connect to the RTP network, there is a very good chance, a 70 percent chance, that they have an already proven path through one of the many banking technology providers who have connected to the network partnered with TCH.”
First Horizon Mixes Rails for Faster Treasury Payments
First Horizon is collaborating with Interchecks to launch its ClearPath Fast Payments service for corporate treasurers. Using infrastructure developed by Visa within its Visa Direct service, Interchecks is leveraging its own platform to facilitate real-time transactions for corporate clients of First Horizon’s treasury management solutions. In a statement, First Horizon noted that the service addresses the growing demand for accelerated payments across a range of use cases, including payroll and commission payouts.
Interchecks Co-founder and CEO Dylan Massey said in a statement that the company “started with a commitment to offset wire and ACH payments with Visa Direct in an effort to speed-up funds availability, and the project grew from there.” Working with First Horizon is about providing its treasurer clients with payment rail choice as well as speed, Massey added.
Emirates NBD Consolidates Global Payments Infrastructure
Through a collaboration with Tata Consultancy Services, Emirates NBD has plans to roll out new payment innovations like SWIFT for Corporates, as well as real-time clearing capabilities across markets in the Middle East, as it consolidates its payments processing infrastructure to tackle cross-border payments friction.
The FI is using TCS’ BaNCS for Payments technology to streamline cross-border payment processing that covers six different countries, including Singapore, India, the United Arab Emirates and the United Kingdom. The technology addresses friction in the traditional cross-border interbank payments model. According to Emirates NBD Group Chief Operating Officer Abdulla Qassem, TCS’ solution “has moved our payments operations internally for standardized, scalable and centralized processing, along with the capability to adopt new market evolutions in clearing, including SWIFT for Corporates.”
Mastercard Leads Central Bank Digital Currency Test
With distributed ledger technology (DLT) an increasingly attractive payment rail alternative, some payments conglomerates operating in the world of traditional rails have expanded in recent years to consider blockchain. Mastercard is one of them: Last week, the company announced the development of a virtual testing platform built for central bank digital currencies (CBDCs), as more governments around the world have announced plans to explore state-backed crypto.
In its announcement, Mastercard also revealed the results of a survey finding that 80 percent of central banks today are in some way engaged in CBDCs. As that figure grows, Mastercard’s platform can help these government entities simulate digital currency issuance, distribution and exchange between banks and financial service providers.
Zero Hash Embraces Payment Rail Cooperation
Zero Hash is a digital assets technology company offering solutions for FIs and other service providers in a Software-as-a-Service business model. The company is founded on confidence in digital currencies’ ongoing proliferation in the financial services world, including in areas like state-backed stablecoin. Yet as the firm’s Co-founder and CEO Edward Woodford recently told PYMNTS, it’s vital that digital currencies expand in harmony with legacy rails — and indeed, with recent funding for the company, Zero Hash plans to build out support for ACH within its offering, too.
“I work at a crypto company, but I’m still paid in USD,” he said in a recent interview, adding that there are certain valuable use cases for both fiat currencies and digital assets, depending on the scenario. “There is very much still this need to bridge traditional markets and regulation with this FinTech 2.0, and we seem to be that bridge.”
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NEW PYMNTS DATA: DIGITAL BANKING STUDY – THE BREWING BATTLE FOR WHERE WE WILL BANK
About: Forty-seven percent of U.S. consumers are shying away from digital-only banks due to data security worries, despite significant interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can shore up privacy and security while offering convenient services to satisfy this unmet demand.
