Quarterly Analyst Roundtable: Faster Payments
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2018 has been a major turning point, with the Federal Reserve catalyzing private sector activity, led by Early Warning Services’ Zelle service and The Clearing House’s Real Time Payments (RTP) network. However, much work remains to be done, and 2019-2020 will be crucial years for refining faster payments delivery models and extending faster payments to additional applications, including disbursements, bill payments, retail payments, and business-to-business (B2B) payments.
Among the topics to be discussed are:
- How will merchants gain access to faster payments schemes, from which they are currently excluded? What will it take to get banks who own these schemes to allow access, putting card revenue at risk?
- What will the pricing model for faster payments be? Venmo recently announced a fee for instant payments; will this give other schemes cover for introducing their fees, giving faster payments a sustainable business case?
- How will fraud be managed? What investments need to be made to prevent “faster fraud” as faster payment schemes scale up?
- What role will the incumbent card networks play in faster payments? Credit cards already provide “instant payments” by guaranteeing the purchase, but both Visa and Mastercard have introduced real-time push payment products, and Mastercard owns Vocalink.
- What will happen to older P2P players, like PayPal, PeoplePay, and PayNet? Debit card networks have required participating banks to accept push payments for many years, yet their schemes have had limited adoption.
- What role will the Federal Reserve play in the future of faster payments? Will they continue the private sector strategy, or create their own system to address the concerns of smaller financial institutions?
Aaron McPherson, VP, Research Operations
Sarah Grotta, Director, Debit & Alternative Products
Steve Murphy, Director, Commercial & Enterprise Payments
Tim Sloane, VP, Payments Innovation