IBM Commerce Payments Real-time processing, same day settlement with IBM April 20th, 2015
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Important Notice
© 2014 IBM Corporation 3
NACHA Same Day ACH
UK Faster Payments
G3 faster payments
Poland’s Express Elixir
Nigeria’s NIBSS Instant Payment (NIP)
All around the world, “immediate payments” initiatives are underway…
NPP Fast Payments proposal
Finland’s Finvoice
South Africa’s RTC
Brazil’s TED Payments
FED Payments Improvement
Some of the possibilities of “Immediate Payments” …. Governments
Replace Cash & Check Payments Increase the speed of money for general society Improve Risk Management
Businesses Wages & Customer Claims Increase speed and lower risk Faster availability of funds & Easier Reconciliation Insights from Payments Rich data (i.e. ISO 20022)
Consumers 24 hour availability Immediate confirmation of payments Irrevocability of payment Immediate use of funds**
Faster A2A (account to account) payments could provide the following benefits: 1. facilitate business-to-business (B2B) payments, which are still accomplished largely by paper check; 2. facilitate mobile payments, a rapidly developing payments application; 3. improve payment security8; 4. be available at all times (24/7/365), unlike clearing houses run by the Bank of England or the Federal Reserve; 5. facilitate person-to-person (P2P) payments, which are typically handled by cash and check in the United States; and 6. facilitate faster international payments using standards such as ISO 20022.
Source: Current Policy Perspectives No 14-5: Costs and Benefits of Building Faster Payment Systems: The U.K. Experience and Implications for the United States
US momentum driven from NACHA, the FRB, and TCH…
Here in the US, we can learn from our friends in the UK …. The similarities of the two countries’ payment systems suggest that the experience of the United Kingdom with respect to faster payments may be instructive for the United States.
Source: Current Policy Perspectives No 14-5: Costs and Benefits of Building Faster Payment Systems: The U.K. Experience and Implications for the United States
Lloyds Banking Group (LBG) consolidates and streamlines its transaction system
Business challenge: Lloyds Banking Group wanted to consolidate and simplify its transaction infrastructure to create a sustainable platform for growth. A number of regulatory requirements were looming that would be difficult to satisfy with the current payment system.
The Commerce solution: The financial institution implemented a transaction management hub that connects all channel and payment systems and provides a core set of centralized payment processing capabilities. The hub serves as a single point of control and information for all payment transactions across the company, and it minimizes the effect on existing payment flows and processes while reducing the cost and risk of payment changes.
2,500+ transactions processed per second
40% of all UK payments at project completion
Improved agility, control and operational flexibility
Choices we will have to make …. There are different, sometimes hotly debated, ways of implementing a faster payments scheme:
1. Speeding up an existing A2A payment system; for example, making the Bacs (ACH batch based) clear transactions several times during a 24-hour cycle.
2. Building a totally new A2A faster payment system.
3. Modifying other existing payment networks to make them suitable for A2A transfers; for example, using an existing debit card or an ATM network.
4. Using an existing Real Time Gross Settlement (RTGS) network by reducing end-user fees for low-value funds transfers.
…. or perhaps choosing multiple paths such as SameDay ACH and the TCH Real Time Payment System…
Source: Current Policy Perspectives No 14-5: Costs and Benefits of Building Faster Payment Systems: The U.K. Experience and Implications for the United States
Decisions facing banks when determining “what to do” ….
Add yet another platform (or maybe two) without reducing current payments footprint “We always add to our payments processing
footprint and never subtract”
Patch multiple “single purpose payment silos” Continue to be held hostage to legacy technology
and cumbersome processes
Take a different approach Address SameDay ACH “immediately” Address Faster payments “immediately” Assimilate legacy payment silos/process “over
time” at your own pace and finally reduce the payments processing footprint at your institution
IBMs Vision and Approach to this global transformation…
Design and implement for “real time” payments
Deliver multi-payment, multi-currency platform for payments convergence
Enable predictive insights to provide new innovative services for clients
Imagine if a single platform enabled organizations to process …. Real Time, SameDay, Batch via processing rules
Real Time Gross Settlement (RGTS), Multiple SameDay
Settlements, and traditional settlement models
High Volume/Low Value & High Value/Low Volume payments
Multiple Payment Types (ISO 20022, NACHA, SWIFT, ANSI x9, CPA, etc.)
Multiple Roles (ODFI, RDFI, Operator, Central Bank, Third Party Service Provider (TSP), etc.)
Laptop to midrange to mainframe to Cloud
Provide analytics and insights for more advanced business services
Financial Transaction Manager portfolio SWIFT
Network Services
FIN
Processing
FileAct Processing
InterAct
Processing
Payment Analytics
Liquidity Management
Trends Analysis
Predictive Analytices
Financial Transaction Manager (FTM) Base
Database Services (DB2)
Application Services (WebSphere Application Server)
Reporting & Analytics (COGNOS 10)
Workflow Modelling (Rational Software Architect)
Event Management (Integration Bus (IIB)
Messaging Services (WebSphere MQ)
Product Toolkit Product Services Transaction Orchestration
Integrated SOA Foundation Layer
ACH Clearing Services
NACHA
Processing
Risk Management
Legacy System
Renovation
Corporate Payment Services
Integrated Payables
FEDI (Netpay) Processing
Payment
Services Hub
Transformation (WebSphere Transformation eXtender (WTX)
Dashboard (WebSphere Business Monitor)
SEPA Services
SEPA Credit Transfers
SEPA Direct Debit
STEP2 CSM Integration
UIs & Dashboard Consolidated Database
Corporate Receivables
Recon. Engine
Automated & Manual Match
Customer
Remittances
SWIFT Business Services
Message
Mgmt Services
BackOffice Integration
Operations Support /
RMA
UK Payments
Integration
Prebuilt mappers
to/from FTM ISF
Integration
with common payment schemes
Ongoing
maintenance & support
Check Clearing Services
Processing & Remediation
Distribution &
Exchange
Legacy System
Renovation
Three Tiered Architecture
FTM Base Canonical Database
Bulking / De-bulking Transformation Dashboard Admin &
Configuration UI Event & Workflow
Orchestration Rational Models
Alert Management
Services
Request / Response Correlation
WODM Integration
Services
Product Onboarding
Client Onboarding
User Security/ Entitlements
Auditing & Logging Alerting Warehousing Operational UI Business Day
Management Calendar Services Data Setup Utility
Landing Zone Management
Inbound Deadline
Management Expected Events Transaction
Validation Transaction Enrichment FX Services
Optimal (Intelligent)
Routing
Customer Acknowledgemen
ts
Duplicate Detection
Recurring Payments
Operational Exception
Management Limit Checking Prefunded
Accounts Payment
Authorization Positive Pay Stop Pay Image Compliance Payments Repair Remediation
Services Cancellation &
Reversals
Distribution Outbound Deadline
Management Extracts Advices Reporting Accounting
(Settlement) Adjustments Correction & Reconciliation Billing Archiving
Research & Investigations
NOC & DNE Management
Duplicate Detection (Item
Level) Returns Reclears Message Type
Monitoring Transaction
Review (OFAC) Check
Conversion SWIFT Access
Gateway Receivables
Reconciliation
Message Entry & Repair
Relationship Management
Services
Product Onboarding
Client Onboarding
User Security/ Entitlements
Auditing & Logging Alerting Warehousing Operational UI Business Day
Management Calendar Services Data Setup Utility
Landing Zone Management
Inbound Deadline
Management Expected Events Transaction
Validation Transaction Enrichment FX Services
Optimal (Intelligent)
Routing
Customer Acknowledgemen
ts
Duplicate Detection
Recurring Payments
Operational Exception
Management Limit Checking Prefunded
Accounts Payment
Authorization Positive Pay Stop Pay Image Compliance Payments Repair Remediation
Services Cancellation &
Reversals
Distribution Outbound Deadline
Management Extracts Advices Reporting Accounting
(Settlement) Adjustments Correction & Reconciliation Billing Archiving
Research & Investigations
NOC & DNE Management
Duplicate Detection (Item
Level) Returns Reclears Message Type
Monitoring Transaction
Review (OFAC) Check
Conversion Receivables
Reporting Receivables
Reconciliation
Web Services
Message Entry & Repair
Relationship Management
Message Validation Message Printing SWIFT Network
Emulation SWIFT Multi
Tenancy SWIFT Access
Gateway
App
licat
ion
Ti
er
Dat
a
Ti
er
Pre
sent
atio
n
Ti
er
Operational UI Business Monitoring Mobile Notifications & Alerts Corporate Portal
HTTP/S HTTP/S SOAP
HTTP/S SOAP
HTTP/S SMTP MQ
Messaging File
Transfer
Warehouse Rules System Config
Partner Profile
Analytics &
Reporting
Business Monitoring
Duplicate Detection
ODS Active
Historical
IBM is ready to help financial institutions…. Immediately…
The IBM platform supports the entire NACHA payment life cycle whether SameDay or Traditional processing is required…
ACME Payments
Corporates (Receiver)
First Global Bank (FGB) (Originating Depository
Financial Institution - ODFI)
Second National Bank (SNB) (Receiving Depository Financial
Institution - RDFI)
ACH Operator(s) Federal Reserve Bank (FRB)
or Electronic Payment Network (EPN)
1. Authorization/agreement between originator and receiver
First Global Bank Posting Systems
2. Entries initiated in an agreed-upon format via browser-based platform or CPU link
3. Items distributed for processing
4. Items distributed to receiving banks
5. Settlement occurs to ODFI and RDFI Fed accounts
6. Entry posted to receiver’s account and reported to receiver
Individuals (Receivers) or
Other Banks
7. Returns, Dishonored Returns, & Contested Dishonored Returns
Origination Support
Landing Zone Management Validation, Enrichment & Optimal Routing Control Totals Etc.
Exception Management
Exceptions are routed to remediation personnel
Approvals, risk management exceptions, etc. Processed at the ACH entry or batch level Etc.
Distribution
Distribution to Operators, Third Parties, etc. Transit & ONUS support SameDay & Traditional Support Etc.
Multi-Payment, Multi-Currency, Multi-Bank, Support
Rules Based Processing
Financial Governance (Adjustments, Accounting, Settlement)
Dashboards and Reporting for Payment Insights…..
Previously released FTM base and features
New FTM feature released in year Planned FTM feature
IBM asset or value added partner offering considered for FTM
Base FTM
CPS
SEPA
ACH
2013
Establish Consolidate Expand
2011
Base FTM Base FTM
CPS
SEPA
2012
Base FTM
CPS
SEPA
Chec
k
SWIF
T Bu
s Sv
cs
ACH
Enable Cloud Delivery
Trad
e Fi
nanc
e
Reco
n.
Trad
e Fi
nanc
e
UK
Paym
t In
teg
2015
Com
mer
ce
Base FTM CP
S
SEPA
Chec
k
SWIF
T Bu
s Sv
cs
ACH
Prepare for Cloud Delivery
UK
Paym
t In
teg
2014
SWIF
T N
etw
ork
Serv
ices
Payments Analytics – Fraud…
IBM Payments continued growth and expansion
IBM supports the NACHA SameDay initiative… Today!
Find out more about IBM Payments
Visit us at booth 223 Follow us on twitter #IBMCommerce, #IBMPayments Download this presentation from Slideshare http://www.slideshare.net/ibmsmrtcommerce
8501 IBM Drive Charlotte, NC 28262 Phone (704) 942-3278 Mobile (704) 281-3803 [email protected]
Gerald Craig Rector Offering Management & Strategy Payments Software IBM Commerce
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Legal Notice The information contained in this presentation is provided for information purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this presentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this presentation or any other documentation. Nothing contained in this presentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in this presentation to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates or capabilities or pricing referenced in this presentation may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product, feature availability, pricing in any way. Nothing contained in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you will result in any specific sales, revenue growth or other results.