Real-time Payments Are Changing The Reality Of Payments
Real-time payments arechanging the reality ofpayments
Contents2#paynow1Why cash may be a thing of the past2How do real-time payments work?3Potential benefits of real-time payments4Real-time payments go global5What is driving the growth of real-time payments?6What action can be taken now?8Developing a roadmap10#startnow11
#paynowThe mass adoption of real-time payment systems around the globe has contributed to an environment in whichmany consumers, merchants, and financial institutions expect to be able to pay friends and customers, settlebills, and transfer money at the drop of a hat. While the concept of “paying now” is not a new one — cash is animmediate payment transaction instrument after all — the growth of “real-time payment” options has helpedbuild a new standard among consumers. This new standard is driving change for traditional payment types —checks, credit, debit, prepaid, and the like — as consumers have generally come to expect faster settlementperiods, notifications and consolidated reporting. The question for financial institutions is whether they’re readyfor #paynow?Real-time payments are changing the reality of payments1
Why cash may be a thingof the pastEver since money was invented in the 7th century BC,the exchange of paper, metal, and other forms of hardcurrency has generally been the most convenient way topay in real-time for every day purchases. Even with theintroduction of checks and credit cards, cash is still usedto conveniently exchange funds in an immediate fashion.However, the ease of use of cash has also faced severalchallenges. For instance, cash is an expansive instrument,requiring printing storage, circulation logistics and costs,making it difficult to store and transport. Moreover, manytransactions no longer occur in person, which requireother methods of payment. Cash can also incur costs,such as check-cashing and ATM fees. According to theEuropean Central Bank, the total cost of cash in theEuropean Union is 1% or more of GDP.1 Similarly, the costto support cash in the US is 200 billion annually.2The growing ubiquity of smart devices and boomingonline retail commerce in markets outside of the USis driving the rapid adoption of real-time payments.Increasingly, demanding consumers may be turning totheir smartphones when they need to pay merchants,billers, peers and others. While the private sectorhas typically driven adoption to promote commerce,governments tend to lag behind; yet increased usageof real time payments could help them increase taxcollection and enhance fraud prevention.Faster payment schemesThere are many “faster payment” schemes available around the globe aimed at expediting the availability of fundsby creating a workaround for underlying Clearing & Settlement mechanisms. Yet a single approach for the industryhas not yet evolved. One such example of faster payment is the Interbanking Electronic Payment System, SPEI, ofthe Banco de Mexico which clears low value transactions every 20 seconds during working hours. Other countrieshave chosen to implement “multiple batch” systems with clearing cycles that are designed in the same manner astraditional systems, but repeated many a times a day.1Press Release-New ECB report examines the costs of making payments in the European Union. European Central Bank, October 1, 2012.2"The Cost of Cash in the United States," Bhaskar Chakravorti and Benjamin Mazzotta, The Fletcher School – Tufts University, 20132
How do real-timepayments work?Most existing real-time payment systems offer an instant,24/7, interbank electronic fund transfer service that canbe initiated through one of many channels: smart phones,tablets, digital wallets, and the web. In such a scheme,a low value real-time payment request is initiated thatenables an interbank account-to-account payment fundtransfer and secure transaction posting with immediatenotification features.The main aspects of most real time payments are:AuthorizationCertification ofpaymentPostingFunds are madeimmediatelyavailableto of thetransactionSettlementInstant settlementof outstandingobligations betweenfinancial institutionsNotificationPayee receives thefunds and payerreceives confirmationof the status of thetransactionReal-time payments are changing the reality of payments3
Potential benefits ofreal-time paymentsReal-time payments can benefit financial institutions (FIs), merchants, consumers and society by offering enhancedvisibility into payments, by enabling better cash management and by helping businesses better manage day-to-dayoperations by improving liquidity. The liquidity improvement can be especially impactful to small merchants who maybe used to waiting days for their settlement, possibly creating a positive impact on their cash flow and daily salesoutstanding (DSOs).Five categories of real-time paymentsWhen considering the real-time payment landscape, there are five common categories of payments. Each in turn hasgreat potential to disrupt the existing payment ecosystem in the next 2-3 yearsCategory of PaymentDescriptionsSize of Transactions Key Considerations1. Business to Business (B2B)Supplier paymentsLow2. Business to Consumer (B2C) Legal Settlements Insurance claims Contingent Employee wagesMedium to High Bill Pay Hospital Co-pay Pay at POSLow to Medium4. Domestic Peer to Peer (P2P)Repayment to Friends/FamilyLow to High5. Cross Border Peer to Peer (P2P)Remittance to Family/FriendsMedium to High3. Consumer to Business (C2B) Real-time authorization/clearing Intra-day availability of funds Intra-day interbank settlement Late-day interbank settlementSource: Deloitte analysisOne example is the Peer to Peer (P2P) space, where there are currently more than twenty applications in the US market,enabling payments on smartphones, using bank accounts or debit cards. Forrester forecasts that P2P payments willreach up to 17 billion by the end of 2019 from 5 billion in 2014.3 We believe this rapid growth of P2P is largely drivenby accessibility, and an attractive user experience that focuses on speed and convenience for both domestic transfersand cross-border remittances.34Forrester Research Mobile Payments Forecast, 2014 to 2019, Susan Wu, Forrester Research, January 30, 2015
Real-time paymentsgo globalFaster and near real-time payments are catching on across the globe in places like Mexico, the UK, Sweden, India andSingapore.4 Technology, high speed data networks and consumer behavior are among some of the factors fuelingthis demand for speed, and the typical result in most countries has been the Central Bank’s involvement in driving thetransition to a real-time system, largely through industry consultation and the identification and move toward a nationalpayments roadmap.Representative Real-Time Payments SchemesCatalystCompanyCentral BankSPEIDomestic P2PC2BB2CB2BCross border P2PMexicoCentral BankIMPSIndiaCompetitionAuthorityFaster PaymentsUKMajor Banks &Central BankbankgirotSwedenCentral Bank &InfrastructureInstitutionExpress ELIXIRPolandStrongWeakIn the U.S., the Federal Reserve believes that the U.S. payment system is in the midst of its own modernizationtransformation.5 They have urged US banks to look at what is happening around the world, including evolving consumerpayment preferences, and begin to create a real-time ecosystem that has the ubiquity, safety and convenience of legacypayments networks.4Mexico’s SPEI, the UK’s Faster Payments Scheme (FPS), Sweden’s Immediate Payments Scheme (BiR), India’s IMPS and Singapore’s G3 system allprovide good case studies into the major players, catalysts & type of use cases (See Fig 2). UK’s Faster Payment Service payment volumes grew by14.2% and values by 18.9% annually, when comparing Q3 2013 to Q3 2014 as per UK’s national payments council report.5"Strategies for Improving the U.S. Payment System," The Federal Reserve Banks, January 26, 2015Real-time payments are changing the reality of payments5
What is driving the growthof real-time payments?We have witnessed tremendous technological andbusiness model changes over the past decade. From newpayment platforms and solutions, to updated regulationsaddressing payment effectiveness and security, to —maybe most significantly — higher expectations frommerchants and consumers.Technology innovation: Smartphone adoption has reached70% in developed countries,6 while in various developingeconomies feature phones are often replacing walletsand cash. New domestic person-to-person (P2P) paymentproviders are popping up on a regular basis, due to catalystslike social platforms, digital currencies and near-fieldcommunication (NFC) based payments. Rapid technologicalchange is driving rapid change in the industry.New players and business models: While the traditionalfinancial industry once controlled the world of payments,new start-ups, spin-offs, and partnerships are introducingnew options for the payments sector. In the last few yearsnumerous new FinTech startups have launched with afocus on mobile payments.7 The focus tends to be on newservices, for instance, security with fraud detection andauthentication, improved customer experience or makingfunds available quickly to small businesses when their lineof credit is approved. The next step for these organizationsmay be determining whether real-time payments becomesa core business element and ways to design an operatingmodel to help optimize that service delivery.Merchants’ expectations: In addition to paymentassurance and lower fees for transactions, many smallbusinesses and large retailers alike are looking at real-timepayment to enhance their cash flow management,reduce fraud activity and provide incremental value totheir customers.Consumers’ expectations: Due to rapid technologicalchange, many consumers now expect almost everythingto be available in real-time — but payments often seemedstuck in the past. The age of instant gratification is here tostay. Paying bills or friends should not be more than a fewclicks or touches away, and the same expectations tend toapply to accessing funds as soon as they are available.6786The Tipping Point for Real-Time PaymentsCommon customerexpectations #paynow Friends immediately Deposits same day Billpay same day Pay with anything(miles, points, etc.) No late fees if sameday payment Low-fee transfers Common merchantexpectationsGet real-time paymentsBetter use of cash flowReduce fraudProvide incremental valueto customersTechnologyinnovationRegulatorypressure Smartphone adoption Multiple P2P apps Pay via social tools Multiple ACH windows Real-time settlement Digital currencies BiometricsReal-time Paymentsand TransfersGlobalization Globalization UK, Australia andother countriesleading the way Need gateways acrosscountriesNew players andbusiness models Dozen of start-upsdelivering near real-timepayments New remittance players clearXchange Social platformsRegulatory pressure: Regulators across the globe areleading efforts to accelerate payments. The FederalReserve Bank8 and the National Automated ClearingHouse Association (NACHA) are working on a roadmapand incentives to accelerate real-time payments in the US.Regulations in some developed countries are supportingreal-time payments. This can benefit consumers and thegovernment, which can efficiently trace activity and helpincrease the fluidity of the overall economy.Globalization: Generally, consumers and corporationsexpect the same simple payment and transfer experienceregardless of where they are in the world. Moreefficient payment solutions have already been effectively"The Mobile Consumer: A Global Snapshot," The Nielsen Company, February 2013 ReportDeloitte proprietary research"Strategies for Improving the U.S. Payment System," The Federal Reserve Banks, January 26, 2015 NACHA FED Global AML
implemented in various countries and for a large variety ofuse cases (see figure 2). As the roster of countries adoptingreal-time payments grows, the pressure on other countriesto lay the groundwork and support speedy payments islikely to increase.Common Challenges and Opportunities forFinancial InstitutionsReal-time payments can present businesses with theopportunity to win, serve, and retain their customersthrough more efficient, secure and engaging commerceexperiences. The convergence of ecommerce and real-timepayments has helped attract new participants to themarket who are developing convenient, easy solutions. Thisproliferation of players can present a number of challengesfor banks, including the possibility of losing customers tonew financial services providers.Banks should consider how best to provide a similaroffering that enables the monetization of associatedservices and stimulates consumer spend, enabling newpayment channels and boosting revenue. By havinga large proportion of payments originating and beingreceived electronically, banks that get involved in real-timepayments could help reduce the average end-to-end costsof payment transactions and enable innovative paymentservices that deliver enhanced value to consumers andbusinesses alike. Another example is the use of real-timepayments to serve the under-banked. By building possiblesolutions to capture real-time payment activity, banks canengage new customer segments.Common Challenges and Opportunities forCentral BanksBuilding an entirely new payment infrastructure typicallyenables more flexibility; however, it is also a costlyendeavor. Simply improving the Automated Clearing House(ACH) does not typically resolve the problem of dealing withsystems that were not designed for real-time notificationand clearing. The ATM and PIN debit infrastructure wouldlikely involve aligning many different networks, integratingwith cash management systems at banks, and expandingthe ability to use those networks to rely on credit pushinstead of the existing debit pull mechanisms, whichchanges the economic models behind them. Credit pushsystems are inherently safer for the consumer and thebank, because consumers do not need to provide paymentcredentials to a third party. Credit-push systems allow thepaying bank to authenticate the customer and confirm“good funds” are available to support the transaction,thus creating a more predictable payment cycle frompayer to payee.To help minimize the differences of transacting in real timearound the globe, harmonized and consistent informationshould be present from payment initiation throughreporting, regardless of region, currency, platform orchannel. Adoption of global standards, such as ISO 20022and SWIFT Corporate Access, has helped many banks toreduce integration costs, interact more efficiently withother banks and financial institutions, and more effectivelyleverage data to run the businesses. To build an expandedand more flexible payments solution, banks and financialinstitutions should search for market place synergies withthird-party payments providers in order to help developa state-of-the-art banking platform to deliver paymentconsistency and efficiency, while assisting in addressingglobal commerce challenges in new and better ways.What are Credit Push and Debit Pull methods?Sometimes electronic payments are perceived to be less convenient than paper checks.With a check, a payer doesn’t need to know the account information of the payee.Many electronic payment types require funds to be “pushed” by the payer to the payee.Wire(s) and ACH credit payments use this “credit-push” methodology, requiring thepayer to specify the account number and routing number of the payee in the paymentmessage. To make credit-push payments, payers will typically ask the payee to providehis/her account information. However, payees do not always have ready access to thesenumbers and sometimes do not want to share this information for security reasons.In contrast, with debit-pull payments, the payer supplies account information to thepayee. The payee’s financial institution then pulls the money out of the payer’s account.Although this may be more convenient for the payer, it can expand possibilities forunauthorized parties who have access to a payer’s account information to fraudulentlypull funds out of the payer’s account.Credit-push allows the paying bank to authenticate the customer and confirm “goodfunds” are available to support the transaction, thus creating a more predictablepayment cycle from payer to payee. Therefore, credit-push payments are increasinglybecoming the new normal for making electronic person-to-person, business-to-businessand bill payments.Real-time payments are changing the reality of payments7
What action canbe taken now?The journey toward faster, more real-time payments in the US has begun. The added support of the Federal Reserve mayraise questions for financial institutions around when and how to engage in the journey. Research conducted by theFederal Reserve shows that the overwhelming majority of consumers and businesses are looking for real-time or close toreal-time payments, indicating a need that is not currently being met by any of the payment ecosystem participants.9The Federal Reserve System beginning of 2015, released a detailed vision and five desired outcomes (see Figure below)recently for an improved U.S. payment system.Underlying this expressed need are two main components: Confirmation of good funds: Validating that the account exists and has sufficient funds to cover the payment. Alongwith this validation there should be an assurance that the payment will be honored, with the exception of unauthorizeduse conditions. Speedy payment clearing and settlement: Making funds available in the payee’s account in real-time.The report10 lays out following options for building a faster payment system: Evolving the existing PIN debit infrastructure, which is currently used in retail stores and at ATMs, to enable real-timepayments Using common protocols and standards to facilitate the clearing of transactions over the Internet Building a new payments infrastructure that would build on existing technology and only have limited uses Building a new payments infrastructure that would process a wider range of transactionsThe Federal Reserve’s five desired outcomes for an improved payment system91081-SpeedA ubiquitous, safe, faster electronic solution(s) for making a broadvariety of business and personal payments, supported by a flexibleand cost-effective means for payment clearing and settlementgroups to settle their positions rapidly and with finality.2-SecurityU.S. payment system security that remains very strong, withpublic confidence that remains high, and protections and incidentresponse that keeps pace with the rapidly evolving and expandingthreat environment.3-EfficiencyGreater proportion of payments originated and receivedelectronically to help reduce the average end-to-end (societal) costsof payment transactions and enable innovative payment servicesthat help deliver value to consumers and businesses.4-InternationalBetter choices for U.S. consumers and businessesto send and receive convenient, cost-effective andtimely cross-border payments.5-CollaborationNeeded payment system improvements are collectivelyidentified and embraced by a broad array of paymentparticipants, with material progress in implementing them.“Payment System Improvement – Public Consultation Paper,“ The Federal Reserve Banks, September 13, 2013“New on FedPayments Improvement: Small Business Payments Toolkit – Top 5 Takeaways,” May 26, 2015
The report states that the four options will be studiedfurther. The Fed said that early this year it plans to establisha task force on faster payments, which will get input fromstakeholders, and then by 2016, identify one or moreapproaches for implementing faster payments.However, there are other, parallel efforts, such asNACHA’s11 same Day ACH clearing & settlements are aboutto become a reality. Recently NACHA’s membership, whichconsists of most financial institutions in the US directl
making it difficult to store and transport. Moreover, many transactions no longer occur in person, which require other methods of payment. Cash can also incur costs, such as check-cashing and ATM fees. According to the European Central Bank, the total cost of cash in the European Union is 1% or more of GDP.1 Similarly, the cost
L’ARÉ est également le point d’entrée en as de demande simultanée onsommation et prodution. Les coordonnées des ARÉ sont présentées dans le tableau ci-dessous : DR Clients Téléphone Adresse mail Île de France Est particuliers 09 69 32 18 33 are-essonne@enedis.fr professionnels 09 69 32 18 34 Île de France Ouest
Airline Payments Airline Payments Handbook Thomas Helldorff Thomas Helldorff The Airline Payments Handbook : Understanding the Airline Payments World This book puts together "all there is to know about airline payments" into a single reference guide, helping you to answer some of the most prominent payments questions: How do payments work?
Same day electronic transfers - make same day electronic transfers for domestic transactions using Faster Payments. Future dated payments - create efficiency through control of your payments by setting them for the date they are due. Pre-fund your Sage Payments e-money account by Faster Payments, regular standing order or a one-off payment.
3. Payments attributed to medical practitioners. 4. gouvernementauxCombined supplier & grant payments and payments through purchase cards, including payments made by all departments and some government organizations. 5. Supplier & grant payments, loan disbursements and payments through purchase cards for each department. 5.
Payments Innovation Summit is a unique platform for corporate practitioners to exchange practical solutions for optimizing your payments operations. Topics include: Global Payments Digital Currency Mobile Payments Innovating within the Current Payments Landscape
1.1 Hard Real Time vs. Soft Real Time Hard real time systems and soft real time systems are both used in industry for different tasks [15]. The primary difference between hard real time systems and soft real time systems is that their consequences of missing a deadline dif-fer from each other. For instance, performance (e.g. stability) of a hard real time system such as an avionic control .
asics of real-time PCR 1 1.1 Introduction 2 1.2 Overview of real-time PCR 3 1.3 Overview of real-time PCR components 4 1.4 Real-time PCR analysis technology 6 1.5 Real-time PCR fluorescence detection systems 10 1.6 Melting curve analysis 14 1.7 Passive reference dyes 15 1.8 Contamination prevention 16 1.9 Multiplex real-time PCR 16 1.10 Internal controls and reference genes 18
Introduction to Real-Time Systems Real-Time Systems, Lecture 1 Martina Maggio and Karl-Erik Arze n 21 January 2020 Lund University, Department of Automatic Control Content [Real-Time Control System: Chapter 1, 2] 1. Real-Time Systems: De nitions 2. Real-Time Systems: Characteristics 3. Real-Time Systems: Paradigms
