If you were at the NACHA PAYMENTS conference recently in San Diego and happen to be a financial professional, perhaps you were one of the 390 respondents to a mobile survey request from TD Bank around the subject of corporate payments innovation. This posting in IBS Intelligence provides a brief summary of results. Unlike the recent volume spikes from Zelle in P2P transfers, to date we at Mercator are not seeing or hearing about any massive B2B take up of RTP from TCH (although to some extent there is for Same Day ACH in certain use cases). This poll result would have you think that the B2B instant payments revo is on the come.
Real-time payments is leading change, as nearly half of respondents (42 percent) cited integration of these capabilities within online banking as the technological innovation that will have the greatest positive impact on the industry over the next three to five years.
As we pointed out in a viewpoint paper titled Payments Hubs: Renaissance in 2018, published June 2018, there is a strong connection between the growth of faster payments capabilities and the opportunity for banks to modernize their overall payments approach to infrastructure. We tend to think that is more what the respondents were thinking, as upgrading enterprise payments capabilities in conjunction with real-time payments should pay off in both scale (costs), flexibility (mobile experiences) and reach (cross border) over the next 10+ years.
“One of the largest impediments to today’s payments industry is that change is happening faster than organizations can realistically accommodate it,” said Rick Burke, Head of Corporate Products and Services, TD Bank. “Sending and receiving corporate payments is a complex process and one that it is not yet as nimble as consumer payments. As more CFOs and treasurers use immediate payment schemes in their personal financial transactions, the demand for commercial availability will also rise, and financial institutions and businesses need to be prepared to accommodate that expectation.”
The impact of APIs would certainly seem to be one of the more compelling innovations since already in use across a number of B2B cases, but does not really get a mention in this piece (although we did not see or take the survey). This could be due to the general lack of transparency around APIs, since not really perceived as a product, but as a means to improve experiences. Certainly AI and blockchain are in folks’ minds.
Payments professionals also predict artificial intelligence and machine learning will create positive change (20 percent) in the industry, while more advanced technologies such as blockchain (11 percent) or biometrics (4 percent) are not yet at the forefront.
Two other areas discussed include cryptos, which still get no respect on the B2B side of things since central banks are providing conflicting direction, and financial services institutions don’t want to risk kicking a hornets nest. Lastly fraud/cybersecurity remains front and center as the concern of concerns.
Cybersecurity and payment fraud remain a top concern for payments professionals but saw a slight decline in the survey results. This year, 84 percent of respondents stated that payments fraud will become a bigger threat in the next one to two years, compared with 91 percent of respondents in 2017.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group