New York-based payments organization NYPay and Deloitte LLP co-hosted an event on June 26 to explore the meaning and impact of real-time payments. Approximately 60 financial services executives attended the three-hour session at Deloitte's New York offices, which included a networking hour and panel discussion.
The combined effects of high-speed communications technologies and changing trends in card-present, mobile and e-commerce payments schemes have spurred interest in real-time payments from all sides of the equation. Recent payments industry developments include:
In his opening comments, NYPay President David True noted that there are many variations and definitions of real-time payments. This diversity of viewpoints was evident throughout the spirited discussion among panelists and audience members. Moderator Eric Piscini, Consulting Principal at Deloitte Banking and Technology was joined by the following panelists:
With no clear-cut definition at this point, achieving an overarching definition of real-time payments will continue to be a work-in-progress for the foreseeable future.
Shari Krikorian advanced MasterCard's focus on real-time payments through the eyes of the consumer. She said consumers want immediate access to funds in their bank accounts when making purchases. From a technology perspective this means a real-time authorization that results in an issuer posting money to a bank account.
PayNet's Eric Purdum concurred with the definition, stating "I'd add business to that concept, with funds posted to a business account immediately," as opposed to the inevitable delays involved with other transmittals such as fed wire transactions.
Chase's Ben Isaacson said, "I'd echo Shari's comments about immediate availability of funds. Banks need to be an end-to-end system with risk management and governance that gives the bank the confidence to give the money [to a particular customer] right away."
Dan Gonzalez stated that the Federal Reserve has been involved in a far-reaching initiative to energize payments providers and make payments faster. He said the initiative extends "beyond the four walls of the banking system." Desired outcomes include faster payments; ubiquity of applications and technology, and safer payment processing that "doesn't exist today." Gonzalez framed his remarks with a disclaimer that his views were his own and not the official position of the United States government.
"We created a task force to bring together industry stakeholders to help define [real-time payments] where the commitment to pay can be as important as the settlement," Gonzalez said. He further noted that the Federal Reserve is exploring real-time payment as it relates to the following five use cases: emergency bill and healthcare payments; person-to-person payments; consumer-to-business bill pay; business-to-person payroll; and adhoc high value payments. Many of these categories are a vital concern for unbanked and under-banked consumers.
NYPay has been hosting events since 2006 with the goal of connecting innovators and leaders from the payments-commerce arena. Merchants, networks, payment processors, startups, regulators and others are welcome to participate in future events.
NYPay members and guests reconvened on July 22 at MasterCard's New York City Tech Hub to explore "APIs in Fintech: What They Do and Why They Matter." The organization's third annual Unconference, a full day event co-hosted by Consult Hyperion, will be held on September 15 at the Microsoft Technology Center in New York City.
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