faster payments an insiders view · small fis ~ 50 - 55% of ddas wide range of progress regarding...

INNOVATION CONFERENCE 2017

FASTER PAYMENTS – AN INSIDERS VIEWSteve NogaloGM Payments, NCR Financial Services, NCR

Javier Guerrero

Faster Payments Lead, Americas, Edgar, Dunn & Company

Please use theInnovation ConferenceEvent App to check-in to this session S688NCR Innovation Conference 2017: Confidential

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Agenda

NCR Innovation Conference 2017: Confidential

What exactly are “Faster Payments”

Global Experience & Driving Forces

The US Approach – Federal Reserve

State of US Market

The Journey Ahead

How do you define “Faster Payments”

NCR Innovation Conference 2017: Confidential 3

1. What is the most important feature? 0%

2. Available 7x24x365 0%

3. Immediate funds availability 0%

4. Immediate clearing/settlement 0%

5. Irrevocable 0%

6. Immediate Confirmation 0%

POLL OPEN

4NCR Innovation Conference 2017: Confidential

Depending on your needs, there can be

many definitions of Faster Payments

Immediate credit: The funds become available in the

payee’s account immediately (within a few seconds) of

the payment being initiated by the payer.

Irrevocability: Once the payer has initiated the

payment, they cannot cancel it.

Certainty of fate: When the payer initiates the

payment, they are informed immediately (within a few

seconds) whether the payment has successfully

reached the payee’s account or not.

Faster Payments Defined

Faster Payments: Pieces to the Puzzle


Infrastructure Layer (Rails)

Accounts

API Layer

Application & Services Layer


Global Experience

Regulators

Improve market

efficiency and

competitiveness

Lower settlement risk

in banking system

Expand participation

in formal economy

Technology

Mobile first

Drive toward global

standardization

Low cost compute –

less need for batch

Internet of Things

Customer Demands

Convenience

Access to funds

Low cost

New Market Entrants

Alternative payments

Non FI participants

FI imperative to

protect role in

payments and

position of bank

account as central

Driving Forces Behind Faster Payments



Mission: “identify and evaluate alternative approaches for

implementing safe, ubiquitous, faster payments capabilities in the

United States.”

Effectiveness Criteria

Goals & Recommendations

Challenges & Opportunities

Call to Action/Next Steps

https://fasterpaymentstaskforce.org/wp-content/uploads/faster-payments-task-force-final-report-part-two.pdf

The Federal Reserve Faster Payments Task Force

The US Approach

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https://fasterpaymentstaskforce.org/wp-content/uploads/faster-payments-task-force-final-report-part-two.pdf


Support continued collaboration

Pursue Federal Reserve Settlement Service

Explore need for Federal Reserve as a service provider

Promote adoption of standards including invoicing and remittance

Work to reduce fraud risk and advance the safety, security and

resiliency

https://fedpaymentsimprovement.org/wp-content/uploads/next-step-payments-journey.pdf

Next Steps in The Payments Improvement Journey

The Federal Reserve

9

https://fedpaymentsimprovement.org/wp-content/uploads/next-step-payments-journey.pdf

What role should the Federal Reserve play?


POLL OPEN

1 Coordination, collaboration & governance 0%

2 Service provider & operator 0%

3 Both 0%

Make Faster

Improve speed of existing payment systems

Same Day ACH

Check 21

Dwolla

Good Funds

Existing Payments, Immediate funds availability

Zelle

DCD

New Payment Rails

Build new payment rails, networks and/or payment types

The Clearing House

Ripple

Alternative Accounts

Virtual accounts that enable payments

Venmo/ PayPal

Alipay

State of US Market


Expand Existing Networks

New types of payments on existing network

Visa Direct

MasterCard Send

Different Solutions to The Challenge


The Clearing House: Real Time

Payments

Developing a brand new “rail” for US for

clearing and settling between accounts

at financial institutions

First new US rails in 40+ years

Greater impact on systems and rules,

so expected to take longer achieve

ubiquity

TCH and Zelle

Zelle (Early Warning): Promise to

Pay

Clears through existing ACH network

and debit network

Easy to deploy and driving for rapid

ubiquity

Push payment, real time notification,

funds available in minutes

At What Stage is Your Faster Payments Journey?


POLL OPEN

1 We have a clear strategy in place 0%

2 We are in the process of implementing 0%

3 We have a good offer in market 0%

4 We haven’t really started yet (be honest) 0%

Most have Faster Payments strategy in place

Most in process of implementing both RTP by TCH and Zelle

by EWS

Most are integrating as direct participants into RTP / Zelle

Relying on commercial side for monetization

Adoption of Faster Payments by US Financial Institutions


Top 25Financial

Institutions

Medium and Small FIs

~ 50 -55% of DDAs

Wide range of progress regarding Faster Payments

Long tail of FIs (10,000+) do not yet have a Faster Payments

strategy

Business plan / ROI is neutral at best (if consumer focused)

Feeling forced to adopt FP to compete with large FIs and

FinTechs

~ 45 -50% of DDAs


Banks and

non-banks

Faster Payments Will Have a Fundamental Impact

Options

Client Expectations

Return on

Investment

Key Decision Criteria:

Features: speed, security, messaging standards, etc.

Technology robustness/maturity

Likelihood of becoming ubiquitous

Use cases supported

Expected client satisfaction

Financial viability/business case

Roadmap for future

Which Faster Payments Initiative to Support?


Start with the Customer Value Proposition


Typical Use Cases of Faster Payments


Getting Ready For Faster Payments


How NCR Can Help

NCR Digital Banking Customers

Large and Medium FIs

NCR is focused first on solutions that we believe will gain

market adoptions fastest – Zelle

P2P service initial use case

Roadmap session will provide details on timing

NCR Authentic for Faster Payments

Integration of existing channel applications

Orchestration, transformation and routing to internal systems

Faster Payments gateways

Creation of customer experiences – use cases

Digital Design Services

You can earn 10 points toward the

Innovation Game right now!

Please go to “Schedule” in the

mobile app, find this session, and

take a short survey to provide

feedback.

Surveys will remain open for 2

hours.

Check in code is S688


Please give us your feedback!

INNOVATION CONFERENCE 2017

THANK YOUSteve NogaloGM Payments, NCR Financial Services

Javier Guerrero

Faster Payments Lead, Americas, Edgar, Dunn & Company


faster payments an insiders view · small fis ~ 50 - 55% of ddas wide range of progress regarding...

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