BankNews April 2015

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Search Results: Payments

Real-Time Payments

By Paul McMeekin

Imagine a world in which consumers have control over their money and are connected directly to their payment mechanism of choice no matter where they are. In this world, shoppers pay anyone directly from their accounts, banks reclaim a direct relationship with consumers and retailers drive up store spending. Payment stakeholders benefit by eliminating inefficiencies in the payments ecosystem, thereby reducing costs and protecting margins in the face of relentless change and regulation.

Consumers and businesses have multiple electronic options when it comes to paying for goods or services rendered. They can pay by credit, debit or prepaid card, ACH transaction, or alternative networks. Although the current infrastructure works effectively, it was built during an age when paper reigned and in which the mass-market Internet and smartphones did not exist. Technology has shifted that landscape and paper-based payment systems have fallen behind by not leveraging the limitless bandwidth, consumer protections and ubiquitous access to online information that now enable more efficient payment alternatives.

Real-time payments via numerous channels and devices like smartphones, non-branded cards, mobile phones, laptops and computers offer an evolutionary alternative to current payment options, delivering instant, secure and inexpensive payments directly between two parties anywhere in the world — creating a new way of paying called “consumer any to any.”

The term “any to any” describes the connection from one party to any other party, and can include payments involving unbanked individuals with access to prepaid cards. Real-time payments facilitate quick, secure, cheap and regulated transactions between consumers and retailers, financial institutions and billers. Payment stakeholders can make both a direct connection to each other and offer a benefit to their customers by enabling person-to-person, person-to-business and business-to-business payments.

The benefits of real-time payments abound for consumers, financial institutions and retailers. If these benefits are clearly and consistently communicated to all stakeholders and consumers, this communication can drive consumer adoption of real-time payments as a dominant payment option:

  • Consumers — Real-time payments return consumers to the center of the payments world with security and speed. Whether they’re paying each other, small businesses, large retailers or billers, consumers control their money. As such, they appreciate benefits like lower cost, instant performance and accompanying real-time rewards (afforded by real-time payments).
  • Financial institutions — Financial institutions benefit from the inexpensive, conservative, efficient nature of real-time payments. Although it’s true that financial institutions would lose money from interchange fees, conservative estimates project more than $5 billion annually in new revenue derived from consumption fees on services that consumers are demanding (i.e., P2P payments and increased fraud protection), as well as more effective cross-selling and merchant-funded rewards. Further, there is an estimated $5 billion in savings from lowered attrition and saved acquisition costs.
  • Retailers and billers — Retailers and billers benefit from significantly reduced costs as they are unhinged from the existing networks. Additionally, retailers reduce their exposure to card data breaches, enabling them to better protect their brands. Real-time payments give them more insight and control into what consumers buy, leading to increased revenue.

In seeking to replace the current complex card payment systems, real-time payments must gain wide adoption to create a network effect capable of propelling the new system forward. With effective communication and marketing of the advantages of real-time payments (i.e., speed, efficiency, lower cost, regulation and increased economic velocity), as well as fraud prevention and loyalty components, the potential real-time payments network is poised to introduce the next step in the evolution of payments.

 

Paul McMeekin is manager of business intelligence and market research, ACI Worldwide.

Mobile Payments Have Little Impact on Cash Use

August 17 – Mobile payments still account for just a very small fraction of retail in-store payments, according to new research from the ATM Industry Association. ATMIA’s research paper, “U.S. Mobile Payments: Do They Disrupt Cash,” sought to determine what real impact mobile payments are having on the use of cash, and what additional impact can be expected in the future. (more…)

EMV Migration Forum and Payments Security Task Force Launch Education Initiative

August 21 – The Payments Security Task Force and the EMV Migration Forum has announced the launch of the industry-wide CHIP IN Education Initiative.

“After only one successful transaction, consumers understand how to use their new chip cards. We want to make their first impression with chip technology a positive one, and make paying with chip the ‘new normal’ this year,” said Randy Vanderhoof, director of the EMV Migration Forum. “To meet this goal, the EMV Migration Forum and the Payments Security Task Force are asking the industry to expand education efforts by participating in the new CHIP IN Education Initiative.”

GoChipCard.com is a comprehensive site providing instructions for successful chip card transactions along with information about what chip cards are, the security they deliver and reference materials for consumers, issuers and merchants.

What Is the CHIP IN Education Initiative?

The same cross-industry organizations that delivered the GoChipCard.com educational website are now asking industry stakeholders to chip in and help expand efforts to educate consumers and small businesses about the new cards appearing in their wallets and their stores.

How Can Industry Participants Help?

The initiative provides issuers, merchants, acquirers and others with educational messages and materials that can be shared through social media and other channels.

For those that sign up to join the initiative, participants will receive a weekly email which includes:

Pre-drafted social media posts and hashtags
Free educational downloads including useful visual aids, training guides, FAQs, infographics and more
Ways to use resources to maximize educational value
Media interview tips
Methods to encourage visits to GoChipCard.com

“Awareness and these resources help make that first chip card transaction a positive experience, whether you’re shopping or helping your customer,” said Carolyn Balfany, senior vice president, MasterCard. “This is the latest in a series of steps that we’re taking to help all U.S. customers and cardholders to understand the many benefits of the upgrade to chip.”

“The CHIP IN Education Initiative is another tool we can use to support the transition to chip technology in the U.S. All of those in the payments ecosystem have demonstrated a shared commitment to easing the transition to chip technology, and, through continued collaboration on initiatives like CHIP IN, we can help educate consumers and small businesses as to how chip technology can help reduce fraud and increase payment security,” said Stephanie Ericksen, vice president of Risk Products at Visa, Inc.

Join the CHIP IN Education Initiative here: www.emv-connection.com/chip-in.

The first weekly email will be sent during the week of August 24th, so industry participants are encouraged to join before then.

“We look forward to seeing everyone chip in to make the U.S. EMV chip migration a success,” added Vanderhoof.

EMV Migration Forum and Payments Security Task Force Launch CHIP IN, an Industry-Wide EMV Chip Education Initiative

August 19 – The Payments Security Task Force and the EMV Migration Forum have announced the launch of the industry-wide CHIP IN Education Initiative.

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Little Impact from Mobile Payments on Cash Use

August 17 – The ATM Industry Association has announced the release of a new research paper, “U.S. Mobile Payments: Do They Disrupt Cash?” which examines the impact of mobile payments on the growth of cash.  Despite all the attention it receives, mobile payments still account for only a very small fraction of retail in-store payments.  ATMIA sought to determine what real impact mobile payments are having on the use of cash, and what additional impact can be expected in the future.

(more…)

Federal Reserve Bank of Kansas City President and CEO to Keynote “Faster Payments Imperative: Transforming the Market” on Oct. 6 in Chicago

August 17 – Federal Reserve Bank of Kansas City president and CEO Esther L. George will serve as the opening keynote speaker for the “Faster Payments Imperative: Transforming the Market,” a one-day symposium presented by PYMNTS.com and NACHA — The Electronic Payments Association®. The event will take place on Tuesday, Oct. 6, at the Hyatt McCormick Place in Chicago.

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Infosys Finacle and Payveris to Partner on Payments Solutions

August 14 – Infosys Finacle, part of EdgeVerve Systems – a wholly owned product subsidiary of Infosys (NYSE:INFY) and Payveris, an online and mobile digital payments company headquartered in Connecticut – today announced a strategic partnership. The two entities will jointly provide integrated payment solutions to banks and credit unions throughout the United States. The offering will facilitate bill payments and innovative money movement services such as interbank transfers and person-to-person payments. (more…)

Samsung Pay Enters U.S. Mobile Payments Fray

August 14 – Samsung has announced that its mobile payment feature, Samsung Pay, will launch in the U.S. Sept. 28. Samsung Pay works like Apple Pay in enabling users to pay with their mobile phones, and employs NFC, fingerprint verification and digital tokenization so that merchants can’t see users’ credit card numbers. But, in addition to NFC, Samsung Pay also uses magnetic secure transmission, which means it will work with a store’s standard credit card swipe reader. (more…)

NACHA CEO Janet O. Estep Named to Steering Committee of Federal Reserve’s Faster Payments Task Force

July 24 – The Electronic Payments Association President and CEO Janet O. Estep has been named as a member of the steering committee of the Federal Reserve’s Faster Payments Task Force.

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Matt Carberry of The Bancorp Joins the Federal Reserve Faster Payments Task Force

July 17 – The Bancorp is pleased to announce that Matt Carberry (Vice President, Business Development, Payment Acceptance), has joined the Federal Reserve’s Faster Payments Task Force.

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