Catching up in Colorado – Faster Payments Council Fall Member Meeting

Meeting up as payment professionals helps us all stay competitive, connected, and informed in a rapidly changing and increasingly complex industry. This was evident at the recent Faster Payments Council Meeting at the Colorado Convention Center. If you weren’t able to attend, here are some of the key points discussed.

First of all, it was such a pleasure to be in the room with over 200 payments colleagues from financial institutions, to fintechs like us, to big-name schemes like Visa and Mastercard.

Most of the conference was focused on how to enable instant payments and the benefits, plus the why, as to why FI’s should enable instant payments.  Based on the Faster Payments Council’s most recent survey, 76% of respondents intend to launch instant payments with receive only.  24% of respondents will launch with send and receive. Is that what you expected?

During the discussions, we talked about the need for instant payments despite there being an apparent solution already.  Zelle is seen by customers as being real-time, but behind the scenes for merchants and FI’s- Zelle is still a batch process that requires days to clear.

The focus then turned to why instant payments? Exposing valid and pertinent use cases became the theme of the conference.  What are the valid use cases for instant payments, how do we expose them, and how do we convert them from the rails they are on currently?

The conference moved on to the how of instituting faster payments.  Discussions outlined the need to standardize messages to allow faster adoption of instant payments. ISO 20022 is seen as the way forward with faster payments, there is so much valuable data within the rich ISO2022 messages. This will allow us to have more information on customers – with ISO20022 we have more than 9k characters per message.  Think of the ability to data mine all of this information.  ISO20022 has been embraced internationally as one language for all of payments. Benefits include:

• ISO 20022 has been present for more than 20 years and is familiar with many.
• It has end to end STP with a richer and more structured format
• Checks are still widely used and could easily be replaced by ISO2022

Some issues for ISO20022:

• Demographics – older people with new tech are often hard to move forward
• Instant payment experiences vary from product to product
• Lack of ISO20022 regulations

The discussion then moved to cross-border payments and how life-changing instant payments can be.  Making sure the instant payment makes it to the recipient, in its entirety, could make a difference in lots of lives. But how do we get here?  Setting up instant payments to multiple countries would require us (the US) to almost start over with each corridor.  Each country has rules and regulations that would almost require FIs to start again with the launch of immediate payments to each country. Governments and governing policy make instant payments, cross border, extremely difficult. There is lots to think about here.

Wider discussions related to active directories.  What’s the need for a central database of aliases?  This directory would contain aliases for accounts that could be universally accessed for information for FI’s.  Who is fraudulent, who is legitimate, are there any warnings on said customer?  The audience was split and not consistent on the use of an active directory as a lot of these services are active today without one.

This is just a fraction of what was discussed but gives you a flavor. It certainly gave us lots to think about. I’ll be pleased to fill you in in more detail.

Progressive thinking

The reason Iliad Solutions has been around for over 25 years, providing market-leading payments testing solutions, is in part due to our commitment to remaining aware of what issues are faced by the industry and help remedy them. By attending events like this we’re able to keep informed on industry developments making sure our testing products continue to best serve the next generation of payment schemes, whether it’s through the products we provide or how we deliver them. By doing this, we help our financial institution clients to grow in their respective markets by helping them to successfully test, introduce and onboard new payments systems.

If you attended the meeting but I missed seeing you or you would like to hear more about Iliad’s progressive payment testing solutions, please reach out.

Attending the Faster Payments Council Fall Member Meeting was an inspirational time and a great opportunity to network. I highly recommend attending meetings like this.

Lisa Forsythe, Senior Customer Success Manager, Iliad Solutions