Real-Time Payments at NACHA
Last week our Chief Operating Officer attended the NACHA conference in Florida. The United States has embarked on a number of innovations that are individually and collectively deploying immediate payments solutions into the market. The conference featured numerous events and experts, all with a slightly different angle on the best approach to doing this and the implications for the US in the short, medium and long term.
Our experience in Europe, specifically in the UK where Iliad led the roll out of the Faster Payments initiative, was focused on the speed and security of a successful government-mandated delivery. We worked with eleven of the thirteen original banks that were live on day one and have since worked with almost all the other UK banks and processors.
The participants and the Faster Payment scheme had to hit dates and targets that offered little scope for error, and certainly none for a delay in the timing. Our mandate was very clear. We were a critical part of the banks’ deployment projects and our software and experts led the testing process. That mandate continues to this day
The United States
In the US the legislators have allowed the market to decide how immediate payments should be adopted, as opposed to the UK governments approach of instructing the industry to make the change. This creates subtle, but fundamental difference in the US deployment.
The two existing schemes, led by Zelle and The Clearing House, deliver different experiences and address different requirements. However, both platforms complement the overall national proposition.
In the background, the FED is still unclear about whether it will offer a service itself, or whether it will maintain its view that the private sector should drive the process. Their uncertainty seems to be giving some of the banks we spoke to cause for hesitation, especially the smaller community banks.
The big question we were left asking was whether the process means that competition between different schemes is creating a better immediate payments landscape for the US, as developers strive for the market-leading solution. The alternative view is that investment risks being diluted as a number of organisations work independently towards a similar objective. The feedback seemed to be that people are still unsure about this.
Real-Time Payments will happen
What is clear is that everyone is working to make Real-Time Payments in America successful. We talked to several people about its development and implementation, and testing is undoubtedly a concern. When we explained our experience, it’s also clear that those responsible for making this happen recognise the need for a new approach and for confidence in a testing platform. We have just launched the kind of testing platform that people have been looking for. The solution is constructed on our proven virtualised payments testing platform, and is fully configured to simulate all the elements of Real-Time Payments in house or via the cloud, enabling banks to fully test their systems internally prior to certification. It also provides the ability to deliver an on-going automated regression platform, to protect the banks and the scheme from the risks of errors being introduced as a result of changes of any kind. In our recent joint press release TCH welcomed this as a valuable aid towards preparing the banks in the US for Real-Time Payments, and accelerating its adoption.
Where to get help
Our experience of Immediate Payments teaches us is that these systems will continue to evolve in parallel with the banks’ own internal systems. Once the case for use is proven, adoption will almost certainly rocket. We will use that experience and our technology to support the market in the US as it develops, and we believe that this will be exciting and challenging in equal measure.