The importance of enabling real-time payment capabilities is evident in the investments leading fintech companies are making in money-transfer capabilities. But the infrastructure being knitted together behind the scenes shouldn’t be overlooked.
Fiserv’s acquisition of Cashedge in 2011 brought two things to the company. Cashedge possessed the technology and experience necessary to enhance Fiserv’s money movement product strategies. Cashedge also provided Fiserv with the leadership acumen necessary to identify and build alliances, which are keys to creating high value, competitive products for this segment.
Money transfer products unable to move funds in real time will not compete in the future when consumers begin using these products to make true personal payments rather than bill payments. As a cash displacement strategy, real-time is a table stakes feature.
Initially, the service is available to financial institutions that offer Popmoney and are members of the Accel payments network or the STAR® Network, a potential reach of hundreds of financial institutions and tens of millions of consumers. STAR is a First Data company and a leading debit network. Over time, Popmoney will expand its connectivity options through other networks and connection points, making the service available to growing numbers of financial institutions and consumers.
The EFT networks, which include FIS/NYCE, PULSE, Shazam, and First Data/Star, are moving towards a more collaborative working environment, spurred by the competitive environment created by the Durbin Amendment and the industry’s need for ubiquitous connections between financial institutions in the United States.
Unlike other countries where the financial institution space is much smaller and more consolidated, the U.S. has a big problem to solve when it comes to account-to-account access. Our ability to support direct debit and credit transfers in a real-time payment environment has been hampered by its dependence on the ACH system. Industry leaders like Fiserv, which own and control EFT network assets, are finding the solution to this problem in collaborative strategies and the market will benefit as a result.
Click here to read Fiserv’s press release.
