June 15, 2021
We cannot become what we need to be
by remaining what we are ~ anonymous
The country is not living at warp-speed yet, but today’s need-for-speed influences many of our activities: Internet speed, mobile connectivity, automated payments, buy-now-pay-later, fast foods, instant messaging, zoom meetings, in-home movies, speed dating, 5-minute pizzas, supersonic jets, etc. The Internet has turned us into speed-and-convenience seeking consumers with very little patience, unable to tolerate delays in our digital world, inevitably spilling over into our retail world. This type of demanding mindset is influencing The Clearing House’s (TCH) enormous effort to drive the global adoption of same day ACH and real-time payments (RTP). Plus, the pandemic’s restrictive environment has demonstrated the need for RTP which, according to TCH, takes 3 seconds from transaction to receipt of funds.
Since 1853, TCH has become the central clearing institution for the banking industry while owned by the world’s largest commercial banks. They formulate the current payment systems that banks have adopted through the years like checks and electronic payments, with the intention of building the payment systems of the future, specifically digital payments. The Clearing House is putting all its eggs into the real-time payments basket which will force financial institutions and other providers to build an infrastructure around the new powerful payment.
Having read an insightful article on Getting Real about Faster Payments by Patti Murphy, May Green Sheet, the data outlined below will reflect her research:
- 3B real time account-to-account payments processed globally in 2020, 41% up since 2019
- S. 1.2B RTP last year, 9th in world, behind Brazil, India, China, UK
- February 2021, Zelle, a P2P network, combined with RTP sending instantaneous money using the recipient’s mobile # or email
- Zelle and RTP will expand services to businesses for customer bill payment, Venmo and Dwolla will follow
- As opportunities flourish with small businesses, various card payments will be replaced with RTP reducing the interchange revenue paid by merchants
- DraftKings and PartyPoker recently offered immediate payouts thru Mazooma and banked into Fifth Third player accounts
- Instant payroll and insurance payouts have hopped the transition money train to RTP
The adoption of RTP offers huge opportunities for companies to offer simple, transparent, immediate payments in a financial world that is going to be upended if it doesn’t jump on the RTP money train. According to FINRA “Americans are approximately $12.58 trillion in debt,” so who knows, maybe paying with real money instead of plastic will reduce our individual and nation’s outrageous debts. Woo, Woo!
Shawn Princell, CEO of RIBBIT.ai was chosen to lead the development of NACHA’s Faster Payments Professional (FPP) certificate program. This innovative program will give payment professionals a universal vision of faster payments with an emphasis on Same Day ACH and RTP. Princell comments that “earning the FPP credentials will give graduates a unique status, branding them as experts in the faster payment’s arena.” All Aboard!
Stay tuned . . .
It’s great to be great, but it’s greater to be human ~ Will Rogers
One of my father and husband’s favorite TV characters was Andy Rooney, who appeared at the end of every 60 Minutes episode with a short critique on the condition of the world. Andy was the dessert at the end of the informative and serious news program, culminating with a rise of his bushy eyebrows, a twinkle in his eyes, and his witty, often acerbic insights about the way things were. And was often said, he could say so much with just a few words.
Tomorrow doesn’t matter, for I have lived today ~ Horace
A young, grey cat with the greenest eyes wandered into our yard last week and made serious eye contact appearing to ask for my assistance. Not particularly a cat lover, I hoped she would go away, but after hours of continual pacing and meowing, I poured some milk into a bowl. Needless to say, Greyling knew she had found a friend and yes, I did name her.
Success is a ladder than cannot be climbed with your hands in your pockets ~ American proverb
In a country often filled with broken promises and lip service, it’s refreshing to look at the track record of the Electronic Payments Association (NACHA), who introduced Same Day ACH for credits 5 years ago. NACHA, the rule maker and governing body, for most financial transactions in the U.S., promised yearly enhancements to Same Day ACH including adding debits, expanding the hours to submit payments, and increasing the dollar limit for each payment. The payment’s world salutes NACHA for their honesty, transparency, commitment, and follow-thru.