real-time payments: emerging technologies and...

Real-Time Payments: Emerging Technologies and Trends

Thursday, May 25

Chris Burfield Keith Gray

Esther Pigg

Session Agenda

2

• Introductions

• The future of real-time payments – and why it matters to you

• Industry updates

• Highlight: The Clearing House Real Time Payment Solution

• FIS real-time payment strategy and solutions

• Q&A

Introductions

Chris Burfield

SVP, Payment Strategy

Enterprise Product Office

Esther Pigg

SVP, Product Strategy

FIS Global Retail Payments

Keith Gray

VP, Business Development

The Clearing House

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4

R E AL - T I M E

TRENDS

A MOVE TO FASTER PAYMENTS

PAYMENT MODERNIZATION

L E G A C Y I N F R A S T R U C T U R E C R E A T I N G F I N A N C I A L

A N D F U N C T I O N A L O B S T A C L E S

COMPETITORS FOCUS ON P2P

T E C H F I R MS P U R S U E C U S T O ME R S W I T H I N S T A N T P 2 P ;

D I S I N T E R ME D I A T I O N T H R E A T T O B A N K S

U.S . FOLLOWING GLOBAL LEAD

F E D & F I N T E C H H A R V E S T I N G L E S S O N S F R O M E X P E R I E N C E S

EXTENSION OF CARD NETWORKS

D E V E L O P M E N T O F ‘ P U S H ’ C R E D I T C A P A B I L I T I E S

Industry Updates

5

• Fed: Strategies for Improving the U.S. Payment System

• Existing Network Evolution:

– Same Day ACH

– Card Network Initiatives

• Emergence of New Networks:

– The Clearing House Real-time Payments Network

– EWS / Zelle

Federal Reserve: Strategies for Improving the U.S. Payment System

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The Faster Payments Task Force launched in April 2015.

• Objectives:

– Represent views on future needs for a safe, ubiquitous faster payments solution

– Address other issues deemed important to the successful development of effective approaches

– Assess alternative approach(es) for faster payments capabilities

• Desired Outcomes:

– Speed

– Security

– Efficiency

– International

– Collaboration

Recent Publications:

• Jan 2017 Progress Reporthttps://fedpaymentsimprovement.org/wp-

content/uploads/progress-report-january-17.pdf

Next Up:

• Mid-2017 Final Report!

Criteria Grouping Category Names

Ubiquity Accessibility Contextual Data capability

Usability Cross-border functionality

Predictability Applicability to multiple use cases

Efficiency Enables competition Comprehensiveness

Capability to enable value-added services Scalability and adaptability

Implementation timeline Exceptions and investigations process

Payment format standards

Safety and Security Risk management Handling disputed payments

Payer Authorization Fraud information sharing

Payment Finality Security Controls

Settlement approach Resiliency

End-user data protection End-User /Provider Authentication

Participation Requirements

Speed (Fast) Fast Approval Fast Clearing

Fast Availability of Good Funds to Payee Prompt visibility of payment status

Fast Settlement among Depository Institutions and Regulated Non-bank Account Providers

Legal Legal Framework Payment System Rules

Consumer protections Data privacy

Intellectual property

Governance Effective Governance Inclusive Governance

Faster Payments Task Force Effectiveness Criteria

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NACHA Same Day ACH

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Card Network Evolution

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• Visa Direct and MasterCard Send focus on $10 trillion

"push" payments market

– Real-time P2P payments and business disbursements

– Reaching 97 percent of U.S. debit card accounts

• Push a credit transaction to a card account in minutes

– P2P capabilities enable senders to transfer funds to a recipient's

debit card

– Extends traditional credits on returned merchandise to insurance

claims, health care reimbursements or payments to independent

contractors

Sources: Visa, MasterCard

The Clearing House RTP

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Provides rails for all FIs either directly or through a service provider

Note: There should be no difference in the user experience for customers of direct FIs and those connecting through a TPSP.

TCH RTP is Real-time in Every Way

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24/7RTP

Clearing 24/7

Continuous Input/Output

Continuous Settlement

Immediate Confirmation = Simplified Reconciliation

Real-time postingand visibility

RTP Distinctive Features

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Payment Status

Immediate notification of successful transfer to end users, providing certainty for both senders and receivers

Payment Certainty

Receivers have certainty that payments will not be reversed or revoked

Complete AR/AP Messaging

Ability to link multiple messages associated with the same transactions through a common reference

Data Extensibility

Allows banks to develop Value added services based on extensible data

Fulfillment Messaging

Ability to provide confirmation by the receiver that they have received funds, combined with fulfillment information

Immediate Availability of Funds

Receivers have funds available in real-time 24/7/365+

Credit Push Only

Customers send payments directly from their existing accounts – complete transparency, no pending payments

Global Ready

ISO 20022 is a global standard that supports the needs of multi-national customers and will enable cross-border payments in the near future

With RTP, FIs can offer new services and improve existing ones

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Efficient

Safe

Immediate• RTP makes payments immediate and final• Quicker closure means no loose ends and ability to move on to what’s next

• Payments and information travel together • Efficient way to improve reconcilement and other processes

• Avoid off-cycle ACH batch processes• Reduce exceptions • Potentially improve liquidity management

• Trusted and secure bank channel• Reduce fraud risk (and related costs)

Putting new RTP Capabilities to Work: Payments Innovation

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Zelle

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WHAT IS ZELLE?

WHY ZELLE?

‣ NAT I O NA L D I RE CTO RY

‣ RE A L -T I ME S E RV I CE S

‣ CO NS UME R B RA ND

‣ F I -CE NT RI C

‣ UB I Q UI TO US

‣ E MB RA CE D A ND MA RK E T ED B Y L A RG E ST F I s

FIS Real-Time Payments Strategy

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A Pathway to Capitalizing on the Latest Advances in Real-Time Payments

FIS PARTNERSHIP

COMMITMENT TO EMPOWERING

SAFE, UBIQUITOUS AND FASTER PAYMENTS

F I S RE A L -T I ME

PAYME NT S O FFE RI NG S

ZELLE

INTEGRATED P2P

FIS PEOPLE PAY P2P

FIS OPEN PAYMENT

FRAMEWORK (OPF)

FIS PAYNET

GLOBAL PAYMENTS

BILL PAY VIA

THE CLEARING HOUSE

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FUTURE PROOF

YOUR INFRASTRUCTURE, OPTIMIZING YOUR INVESTMENTS

BUILD CUSTOMER LOYALTY

OFFERING SECURE, REAL-TIME CAPABILITIES

EXTEND INDUSTRY LEADERSHIP

LEVERAGING THE FIS PAYMENTS ECOSYSTEM

GAIN COMPETITIVE ADVANTAGE

THROUGH DATA INSIGHTS

INNOVATE FASTER

WITH DEEP PAYMENTS INTEGRATION

Questions / Discussion