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Reality Bytes: Faster and Slower Payments Will Coexist

  • By Magnus Carlsson
  • Published: 4/20/2016
PHOENIX -- This week’s NACHA Payments conference covered a wide range of topics, with special attention paid to faster payments developments. The overall view from the conference is that faster and slower forms of payments can, and will coexist, as they are driven by different needs.

In the faster payments field, particular focus is naturally on Same Day ACH, as NACHA’s new, faster capability will become operational in September 2016. Treasurers will need to prepare for this as they may begin receiving ACH payments sooner than traditional ACH, including handling of returns, etc. Of course, with payments becoming faster, focus should also be on fraud and how ACH can potentially be a more interesting target for business email compromise (BEC) scams.

Real-time payments were also a hot topic at the event, with The Clearing House’s real-time capability for credit transactions catching a lot of buzz. Questions regarding timing and usability have been frequently asked.

But again, while real-time payments are the talk of the town, current payments methods in the U.S. aren’t going anywhere. While some payments may need to be instantaneous, other payments such as planned payrolls are fine using legacy systems like traditional ACH. Another overall consensus is that the reason real-time payments are finally making progress is due to the U.S. market finally ready for them.

The Federal Reserve’s Faster Payments Task Force also provided an update. It is getting ready for what some participants call the “fun part” of the project—reviewing and analyzing all the proposals for a faster payments system. An independent consulting firm, McKinsey, has been selected to rate the incoming proposals against the various criteria the task force has spent the past year developing.

Magnus Carlsson is manager of treasury and payments for AFP.
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