Key barriers to RTP adoption and how to Title Slide Arial 34 Bold - Attila Csutak - Real-Time Payments Summit
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Key barriers to RTP adoption and how to overcome them? Title Slide Arial 34 Bold Attila Csutak RTP Summit, NYC November 14, 2019
Key barriers to RTP adoption and how to overcome them? Attila Csutak November 14, 2019
Themes and topics to today’s discussion
What is Real-Time Payments?
What is the clearing and
settlement network landscape?
What kinds of vendor offerings exist?
Key barriers to RTP adoption and how
to overcome them
3What are Real-Time Payments?
Party A Bank A Bank B Party B
R|T|P
Core Infrastructure
Initiate Initiate
payment to good funds
Party B guarantee Send Funds
transaction message of immediately
incoming available for
payment spend or
transaction withdrawal
4Market Developments Milestones The Path Forward Pilot Launched Nov 13, 2017 Commercialization - Speed deployment of RTP origination Average transaction speed
Clearing and settlement network landscape
Zelle The Clearing House RTP
Created to be the chartered financial New payment rail built to conform to the Fed
institution answer to FinTech P2P payment Faster Payments Effectiveness Criteria
networks
Suitable for all payer/receiver use cases
Owned by the top six US banks (P2X, B2X, G2X)
Accessible by over 350 banks Q4 - 2019 Designed to send value-add messages
Q3 2017
Q2 2017
Provides clearing messages, today along with payments
settlement handled via ACH but it will be Provides both clearing and settlement
settled over RTP in the future International standards and security
Investigating business application beyond
the B2C model
6Vendor offerings
Platform providers Service providers
Provide connectivity to clearing/settlement networks Client-facing product is ready-made by the provider
Enable flexible client facing products to be built Key doesn’t directly connect to the clearing /
settlement network
Similar to existing payment gateways
(e.g. ACH, Wire) Examples: Fiserv, CheckFree, PopMoney, FIS Bill Pay,
and PeoplePay
Examples: IBM FTM, Dovetail Universal Payments,
FIS Open Banking Framework, ACI – UP Immediate
Payments, VoIPay
7Rails and network alignment
Faster payments ACH Cards Closed loop Distributed ledger
Applications & services
Direct Deposit
Direct Debit
API engine
Leverages the
Infrastructure layer
card & ACH rails
(competing rails)
for bank
Same-day transactions
ACH
(riding the
RTP rail since
Q2-2019)
Bank controlled
8
Bank accountsPoints to consider when implementing a Real-Time Payment platform
Technology innovations
Worldwide trends
What is driving
the faster Customer expectations and demographics
payments
environment in
the U.S.? Merchants expectations
FinTech
Industry momentum
9Important considerations on how to integrate new payments
capabilities (RTP)
Customer expectation
Cost of operations/implementation/standards
Core platforms, project implementation, ISO20022
Fraud risk management to customers.
What is driving Time to market on mobile/e-wallets while
focusing on real-time services.
the faster
payments
Revenue growth
environment in Strong business case to drive revenue
the U.S.?
Ability to integrate with legacy systems
Zelle like payment functionality via mobile app or online banking?
Education must address two key barriers:
1. widespread lack of understanding of what “real-time payments” really is
2. how it represents change to the status quo, and a lack of awareness on the benefits of RTP
10Reflections on U.S. adoption
Innovator Early adopter Laggard
FinTechs Central bank
banks banks banks
Pro-active RTP RTP acceptance Evaluate Most are Federal Reserve
adoption to to retain & grow whether providing Bank decided to
demonstrate market share, pursuing RTP comprehensive develop RTGS –
market analyze whether and / or Zelle, solutions, and will have to
leadership, has direct or indirect but they want to through their provide structure
ability participation offer through “core” partnership around this new
to influence the makes business indirect they have with rail,
evolving RTP case for your participation banks offer publish regulatory
standards and client base secondary guidelines and
protect large services like the make
customer base ‘Push’ and “Pull’ it affordable to
services and every size
other faster financial
payment institution
solutions
11KeyBank and Real-Time Payments
RECEIVE 2018
Consumer Commercial Public Sector
• Urgent / emergency • Urgent / emergency • Urgent / emergency
• Refunds • Refund payments • Inter-government transfers
• Entitlement programs • Subsidy • Standard government receivables
• Loan disbursement • Commerce
• Corporate disbursement • Supplier / vendor payments
• Legal • In-house partner /
• Account-to-account transfers subsidy payments
• Legal settlements
• Corporate disbursements
• Trade processing
Send capabilities available in 2020
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