PaymentsJournal

In the first half of 2023, the ACH Network saw consistent transaction volume growth, handling 7.7 billion payments valued at $19.7 trillion in Q1—a 6.4% increase over a year prior, and a processing 7.8 billion payments transferring $20 trillion in Q2—a 4.3% and 2.9% increase respectively. The steady rise underscores the ACH Network’s indispensable role in various financial operations, including payroll, tax refunds and business-to-business payments.

In a recent PaymentsJournal podcast, Michael Herd, Senior Vice President of ACH Network Administration at Nacha, and Elisa Tavilla, Head of Debit at Javelin Strategy & Research, discuss the current state of ACH, offering insights into its trajectory and impact.

In March 2022, the dollar limit for Same Day ACH payments increased to $1 million from $100,000. This change led to a noticeable rise in the use of Same Day ACH for higher-value payments.

“The value of Same Day ACH payments for the first half of 2023 reached almost $1.2 trillion, which is more than 50% higher than the previous year,” Held said.

The higher transaction limit has influenced various areas, including payroll and consumer disbursements. Insurance companies, for example, have found it beneficial for making larger insurance payouts, including homeowner claims.

The new limit has also been advantageous for businesses making vendor payments and inter-business transfers. Such transactions often involve larger sums, and the increased limit has allowed for wider adoption of Same Day ACH.

“People are also showing a lot of interest and enthusiasm for faster payment options, including both Same Day ACH and other rapid payment systems,” Tavilla said. “There are numerous areas where these faster payments are valuable, like healthcare, payroll and real estate. It’s clear that the increased transaction limit has opened up more opportunities for businesses to make the most of these faster payment methods.”

And the demand for faster payments is set to continue to grow.

“Various payment systems will likely experience simultaneous growth, especially as transactions move away from checks,” Herd said. “It’s a reasonable forecast considering how many businesses are already accustomed to using ACH. While they become acquainted with alternatives like FedNow and RTP, they will likely begin by utilizing ACH, a method they are familiar and comfortable with.”

Healthcare organizations are increasingly leveraging ACH—and this adoption is driven by the need for efficiency and convenience in processing medical bills, insurance claims and reimbursements.

“People are adopting digital methods to split bills, share expenses and transfer funds among friends and family,” Herd said. “The ease of ACH transfers is contributing to this trend, making it more convenient for individuals to manage their finances seamlessly.”

Unlike retail, where payments happen at the point of sale, healthcare payments often occur after care is given. Although electronic bill payments have been common for decades, medical practices still use paper for these transactions. But the pandemic accelerated the shift to digital, with more insurance providers encouraging electronic form submissions and reimbursing providers through digital payments. But that shift is not complete throughout the industry.

“Healthcare organizations have documented the potential savings in administrative processes by transitioning from paper-based transactions to electronic methods,” Herd said. “In 2023, there remains a significant opportunity to embrace electronic submissions and payments in the healthcare industry.”

A similar shift is also occurring in the business-to-business (B2B) sector. “Efforts over the years have led to making electronic B2B payments more convenient and user-friendly than checks,” Herd said. “The need to adapt during the pandemic pushed businesses to use ACH for B2B transactions instead of checks.”

Even though some employees are returning to their workplaces, the shift back to checks hasn’t happened. Once a switch to ACH is made, it tends to stick.

These trends suggest that payment systems such as ACH will shape the landscape of payments in the coming years.

Although the use of checks is diminishing, it remains active. And those still using checks should reconsider, Herd stresses, particularly because of fraud.

“When it comes to the ongoing issue of check fraud, my advice is quite straightforward: Stop using checks,” Herd said. “The irony lies in the fact that while check usage has decreased, check fraud has remained a persistent problem. Financial institution filings about check fraud have doubled in a year, and checks are the payment method most impacted by fraud.”

To reduce vulnerability to fraud and unauthorized payments, it’s best to look at electronic payment methods, such as recurring electronic debits, which offer greater security and efficiency.

“From a consumer’s standpoint, I’ve noticed news stories about thieves stealing checks from mailboxes,” Tavilla said. “It’s a bit like the scenarios portrayed in ‘Catch Me If You Can,’ which we might assume were things of the past. But check fraud remains an issue.”

For financial institutions dealing with check fraud, Nacha offers a helpful tool called the ACH Contact Registry, which provides contact information for the personnel responsible for check payments at various financial institutions. This resource helps resolve check fraud cases effectively.

The ACH network is steering the course of financial transactions toward greater efficiency and security. The growth in transaction volume during the first half of 2023 cements the ACH Network’s pivotal role in powering a multitude of financial operations. The industry’s embrace of electronic methods, guided by ACH’s stability and security, continues to transform the payments industry, particularly in the healthcare sector and with B2B transactions.

Security is a top concern at checkout for many consumers. In a recent survey, TrueLayer spoke with 4,000 European shoppers and found that nearly two-thirds (64%) prioritised security over all other factors.

But there’s a limit to that cautiousness. Although businesses need to protect customers and foster trust,  some security measures can cause friction, which in turn can drive customers away.

Finding the right balance can seem daunting. But without the proper measures in place, businesses risk losing customers to competitors that offer a much more seamless payments experience.

During a recent PaymentsJournal podcast, Michael Brown, Head of Commerce at TrueLayer, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, discussed how merchants can make customers feel secure during the payments process, including the use of familiar logos to provide consistency and open banking solutions to reduce friction.

These are just a few of the ways merchants can better live up to their customers’ payment expectations. For more information, read TrueLayer’s latest report, The Payments Experience Playbook: what really matters to your customers.

Customers want to feel safe when making a purchase, and for the most part, consumers feel safe paying with brands they’re already familiar with. In many cases, smaller businesses struggle to establish that trust. One option is to leverage familiar and established payment methods.

“Using logos from well-known banks at checkout can make customers feel secure,” Brown said. “Since people often use these logos in their mobile banking apps, seeing them at checkout gives an extra sense of safety.”

Keyes also noted that recognisable logos help consumers know what to expect from a payment. “Paying on every single website is different, so any kind of consistency you can offer can really help with conversion and can really create a better experience,” Keyes said. “Otherwise, consumers can get lost and frustrated.”

Open banking can also help establish that trust.  Consumers use online banking daily, so by offering open banking payments, merchants can leverage that trust and familiarity at the checkout. Strong customer authentication (SCA) is also built in to these payments, protecting customers while offering a smooth experience.

Because security is so important, many customers will accept and even welcome extra steps at checkout—especially when purchasing of high-ticket items. But as always, too much friction can lead to lost sales.

“In the UK, 60% of consumers say a slow and frustrating checkout experience would stop them from shopping with a merchant again,” Brown said. “This is especially concerning for online businesses that rely on repeat customers.”

Authentication, the process of verifying payments, is a big reason for this friction. Measures such as SCA have made this even more challenging, particularly for businesses that mostly accept credit and debit cards for payments.

“Around 56% of merchants have seen their card payment success rates drop due to these authentication requirements, and for 36% of them, the drop is quite significant,” Brown said.

Bigger merchants with well-equipped payment teams have found ways to lessen this impact. It’s the smaller businesses, which can’t focus as much on optimizing their checkout processes, that really struggle to maintain their conversion rates in the face of new authentication requirements.

Over the past couple of years, many payment options have emerged at checkout, and today, consumers expect their preferred option to be readily available. At the same time, merchants are working to figure out how many payment methods they should offer.

“Our research found that about 63% of ecommerce merchants believe having five or fewer payment methods is ideal,” Brown said. “But it’s not as simple as just picking five and sticking with them. Consumer habits and the market are always changing, and merchants must stay flexible.”

This can get rather complex. International businesses may need to offer various payment methods in different markets, and these methods each need to work on different devices and platforms, all while keeping costs low.

Having too many options isn’t a good thing, either. “You want to avoid what’s often called the NASCAR problem—slapping checkout buttons all over and confusing consumers,” Keyes said.

Determining the right number of payment options should vary based on the customer base and the cost of items sold. “If a merchant sells expensive stuff, offering installment or buy now pay later plans could be important,” Keyes said. “But for a merchant selling smaller items, this might not matter as much.

Overall, the checkout process needs to strike a balance: it should be secure enough for customers to trust yet smooth enough to guide the customer to complete the sale.

“Customers don’t really care if a business is small or big, they want a smooth shopping experience,” Keyes said. “If a smaller merchant’s process isn’t up to par, customers might switch to a bigger one with a better process. Small businesses need a plan to tackle these new changes and payment methods to keep their customers happy.”

Alternative payment options can help merchants do this. For example, open banking payments can help improve conversions by making customer authentication quicker. In Europe, new regulations, such as the Payment Services Directive (PSD2), require verification for online transactions. With open banking, customers can authenticate their info through their banking app, reducing friction.

Retaining customers is important, too. After spending effort and money to get consumers to make their first purchase, merchants need to make subsequent visits seamless and enjoyable.

“Once you spend all those marketing dollars acquiring that customer and you get them to do that first-time payment, the next time they come to visit your site you want to make sure that the checkout experience is smooth—so they keep returning and you can really extract that lifetime value out of that customer,” Brown said.

“Ultimately, we have to remember why merchants are doing this,” he said. “This is about enabling sales, driving those high conversion rates, and delivering that lifetime value.”

With more than 100 countries mandating some form of e-invoicing, the move to streamline tax collection and improve overall economic efficiency is well underway. Navigating the changing landscape, however, isn’t simple. The lack of standardization around e-invoicing makes it a challenge for international businesses.

In a recent PaymentsJournal podcast, Marco Eeman, Managing Director at Billtrust, and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, explored how much e-invoicing has changed and how businesses can best adapt to mandates and new requirements.

A turning point for e-invoicing occurred when governments began mandating it. Compliance with local legislation became non-negotiable for businesses seeking to operate in countries that imposed such standards. Governments found that e-invoicing regulations not only facilitated tax collection but also promoted greater economic transparency and growth.

In 2014, the European Union initiated a directive with the aim of establishing a unified pan-European standard for e-invoicing, known as the OpenPEPPOL (Pan-European Public Procurement Online) project. The directive set a deadline for all EU member states to implement the use of this technology by the end of 2018, affecting more than 100,000 public administrations and agencies throughout Europe.

However, the directive left each country to determine its own approach to building an e-invoicing solution. As a result, companies trading with government and public sector agencies in different countries had to implement their own solutions to comply with the new regulations and maintain efficient operations.

Collaborations between governments and e-invoicing service providers have resulted in some level of standardization, simplifying invoicing for businesses that operate within the EU. However, achieving a single global standard remains a challenge due to diverse tax laws and regulatory frameworks.

“Electronic invoicing and the regulations related to it are all about taxes,” Eeman said. “Different countries have different tax laws, and they may compete to attract businesses with lower or more favorable tax rates.”

Countries as varied as Singapore, Japan, Australia, and New Zealand have joined the global e-invoicing movement, adopting models akin to the European standard. As the number of mandates increases, so will the market for e-invoicing service providers. However, the growth of electronic invoicing is driven not only by government regulations but also by the relationships between suppliers and buyers.

“Large buyers in industries like retail, oil and gas, and utilities have significant purchasing power and influence,” Eeman said. “They often require their suppliers to follow specific invoicing methods, which may include using certain portals or digital formats.”

To achieve a clear understanding of invoicing across different parties, the adoption of widely used standards such as Universal Business Language (UBL) is essential. UBL ensures that specific terms have consistent meanings, facilitating the importing and processing for businesses. The focus on sending and receiving high-quality data results in more efficient processes, especially the handling of accounts receivable on the suppliers’ side.

“In the world of business-to-business (B2B) transactions, the focus is on making the invoicing and payment process frictionless and data-driven,” Bodine said. “The goal is to reduce manual efforts, ensure quick payments for suppliers, and enhance overall efficiency. This approach is particularly crucial for B2B interactions.”

The complexity of achieving a universal standard underscores the need for collaboration with knowledgeable partners that can navigate the variations and provide valuable insights and solutions.

An invoicing service provider such as Billtrust can play a crucial role in enabling efficient data transmission between businesses. By complying with various standards set by governments and buyers, invoicing providers can facilitate smooth transactions, reduce manual efforts, and enhance overall efficiency in the B2B realm.

“Even with the idea of having a standard, the reality is that different industries and regions have various implementations of standards,” Bodine said. “For example, the ISO 20022 standard has 40 different implementations worldwide, making it challenging to establish a single universal standard. This complexity highlights the importance of partnering with experts in the field who can navigate these intricacies.”

In some countries, tax avoidance is rampant—and e-invoicing can help. Certain countries have taken a proactive approach by implementing the “clearance model” or “continuous transaction controls” for e-invoicing. Suppliers submit invoices to the government, which then forwards them to the buyers after recording the applicable taxes. This approach grants governments greater control over tax collection and offers insights into buyer-supplier relationships.

E-invoicing leaves a digital “paper trail” for transactions, which can be used for tracking and making sure everyone is accountable. Those looking to avoid taxes commonly use cash for payment, but by mandating e-invoicing, governments can—in theory—put a damper on that.

“Italy was one of the early adopters of electronic invoicing in Europe,” Eeman said. “Italy realized that in some industries, collecting taxes could be challenging, especially when cash was commonly used. So they decided to implement electronic invoicing to close the VAT (value-added tax) gap and make their economy more efficient.”

Brazil and Mexico soon followed suit.

“These countries used electronic invoicing along with faster payment methods to make their business processes much more effective and streamlined,” Eeman said.

The global e-invoicing landscape is evolving rapidly, with an increasing number of countries mandating electronic invoicing. While a single global standard remains challenging, adopting best practices and collaborating with stakeholders is key. Rather than seeking separate solutions for each country, businesses should seek a unified global solution to effectively streamline their invoicing processes.

Gift cards continue to grow in popularity in the United States, with roughly 75% of consumers having purchased a gift card within the past 12 months, according to recent data from BHN (Blackhawk Network) research.

For the sixth year in a row, BHN has joined forces with NAPCO Research to conduct a comprehensive benchmark study, examining the gift card programs of more than 100 merchants in the U.S. Based on 175 criteria, the report assesses their in-store, online and mobile gift card offerings, including the consumer purchase and recipient experience. This year a limited assessment of 25 digitally ascendant brands was also included.

During a PaymentsJournal podcast, Sarah Kositzke, Sr. Global Market Research Manager at Blackhawk Network, Andrew Solomon, Vice President of Sales at Blackhawk Network, and Jordan Hirschfield, Head of Prepaid at Javelin Strategy & Research, discussed how businesses can build—or evolve—their gift card programs.

The 2023 Merchant Gift Card Omnicommerce Evaluation examined gift card programs across various platforms, including physical stores, websites, and mobile apps. By evaluating criteria such as accessibility, options, and recipient experience, the study revealed crucial insights for merchants seeking to optimize their gift card initiatives.

The U.S. gift card market is expected to reach $260 billion by 2026. The digital gift card market is also seeing significant growth and is expected to reach nearly $135 billion by that same year.

“Digital gift cards continue to be the most requested gift for 16 consecutive years,” Solomon said.1

Although the rise of digital gift cards is undeniable, a significant portion of gift card purchases still occur in-store at physical retailers, including grocery stores, convenience stores, and pharmacies. When it comes to the types of gift cards customers prefer that is also shifting toward versatile options like Visa or Mastercard gift cards and multi-branded gift cards that offer a range of choices of where to shop/dine.

“Blackhawk’s findings align with our research and reveal similar patterns,” Hirschfield said. “Third-party retailers, including big-box stores, supermarkets, and online retailers, continue to be popular destinations for purchasing gift cards, whether for personal use or as gifts for others.”

Gift cards also can expose consumers to new stores.

“During the holidays, we discovered that almost a quarter of gift card recipients received a gift card to a new place they hadn’t tried before,” Kositzke said. This means gift cards not only allow recipients to explore new products at stores they already know and love, they also open the door for consumers to explore entirely new brands and retailers.”

Gift cards can also help strengthen loyalty programs. Across various industries, belonging to a loyalty program increases spending and encourages the self-use of gift cards.

“Blackhawk’s report found that around four in 10 people tend to use gift cards for themselves, similar to what we have observed,” Hirschfield said. “Loyalty programs provide ongoing benefits and create a lasting relationship with customers, rather than being a one-time use experience.”

For merchants looking to start or improve a gift card program, there are some best practices to consider. When it comes to the placement of gift card fixtures in stores, for example, it’s important to consider consumer behavior, particularly when many consumers tend to pair a gift card with another gift item.

“Strategically placing the gift card displays near related items can make it convenient for customers,” Kositzke said. “For example, place them near the greeting card section and near chocolates and flowers, which are commonly paired with gift cards.”

Solomon agreed that it’s important to think about the size, appearance, and placement of the fixtures in a physical store. “Can you make them more eye-catching with colors and lighting? Consider using special displays or holiday-themed shippers at checkout. Pay attention to the marketing and theme around the gift cards and make the carrier (the packaging) feel special and different for holidays,” he said.  

“On the digital side, focus on creating a great mobile experience,” he added. “Innovations like unwrapping the gift card in a mobile setting can enhance the user experience. We actually had to add in rewrapping the gift card because people like unwrapping and rewrapping it.”

Lastly, don’t forget about loyalty programs, which play a significant role in today’s retail landscape. Retailers can attract customer loyalty by offering incentives like earning points when they purchase multiple gift cards. This not only encourages customers to choose that retailer but also provides them with additional benefits, such as fuel savings or rewards.

“Mobile apps are a key driver in enhancing loyalty programs,” Hirschfield said. “They allow customers to easily link physical gift card purchases and load their balances digitally, creating a seamless experience. By offering instant rewards and bonuses, such as a $5 digital gift card, customers feel valued and motivated to try new products or indulge in extras.”

Digital gift cards are gaining ground. According to the NAPCO research, there’s now roughly a 60/40% split between physical and digital cards, with digital gift cards growing in popularity.

“Currently, the average value of digital cards is slightly lower, around $30, compared to physical cards,” Hirschfield said. “However, what’s interesting is that people are using digital cards just as much, if not more, than physical cards. When it comes to unused balances, the median remaining balance for physical cards is about $1, which can be difficult to use. But for digital cards, the median remaining balance is zero, meaning people are able to use the full value of their digital cards.”

According to Solomon, it’s crucial to focus on a few key aspects to ensure a successful digital program:

“Digital channels also allow for higher initial gift loads compared to physical cards. Moreover, digital options are beneficial for those who can’t travel during the holiday season,” Kositzke said. “It ensures that gifts can be delivered safely and easily, making it a great alternative for sending presents to others.”

The gift card industry is experiencing significant growth, and this presents valuable opportunities for merchants. The BHN and NAPCO research emphasize the importance of enhancing the recipient experience, offering multiple payment options, and leveraging digital platforms to cater to consumers’ evolving needs. Furthermore, digital gift cards are a convenient and effective solution for corporate incentives, particularly for businesses with dispersed employees. By embracing digital channels, merchants can expand their customer base and provide a seamless gift-giving experience.

1 Source: *NRF and Prosper Insights & Analytics 2022 Consumer Holiday Survey

Click HERE to receive the full 2023 Merchant Gift Card Omnicommerce Evaluation report.  

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Loyalty reward programs have long been primarily the province of credit cards, but rewards for debit programs are emerging as a big opportunity for financial institutions to stand out in this competitive space.  

During a PaymentsJournal podcast, Jeri Scheel, Senior Director of Product Strategy at Fiserv, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, spoke about the advantages of offering loyalty reward programs for credit and debit cards—and how financial institutions can benefit from taking this two-pronged approach.

Credit and rewards programs have been synonymous for quite some time, and those programs are one of the first things customers seek when they apply for a new credit card. Rewards have become an expected feature and are no longer just another perk for card issuers to offer.

“Whether it’s consumers or businesses, a credit card is expected to have rewards,” Scheel said. “But the real opportunity for financial institutions is to think about how to tie in rewards on the debit side because it can really set them apart from their competitors.

“They’re a differentiator and determine which card gets top-of-wallet status. In fact, research has shown that 68% of people with a credit card have more than one, 90% of those have a go-to (card) that they use most often. And a majority, 71%, of multiple card users choose their credit card for the opportunity to accumulate rewards.”

These data points highlight how much rewards are table stakes for credit—and how financial institutions can leverage that information when thinking about rewards within the debit space.

But launching a rewards program for debit in a haphazard way, such as simply applying a cut-and-paste credit rewards program, is not the right approach. Financial institutions must be more strategic.

“Finding a way to make it work well on the debit side of the house is important,” Riley said. “When Dodd-Frank was coming out and after the Great Recession, a lot of the interchange went away. Therefore, all those programs died up quickly. A lot of debit issuers have found it hard to make that work on that side of the house.”

The most important way to determine whether a loyalty program for debit cards will benefit financial institutions is to look at spending patterns.

“For the debit side of the house, what we have seen is debit users spend more than credit card holders just in general, regardless of rewards,” Scheel said. “Debit card holders without rewards spend about $13,000 a year. Credit card holders in the same period only spend $4,000. The dollar value you’re starting at is already higher.

“The percentages are greater on the credit side, but the total dollar value is better on the debit side. In the debit space, if I’m spending $13,000 a year without rewards, just offering a rewards program may increase my spend by 25%, which is certainly nothing to shrug at, but it takes me up to $16,000 a year growing that interchange on the debit side.

“And then if you get them to redemption—which shows that they’re engaged in the program— their average spend for the year is $21,000, almost double where you started with no rewards. That’s how financial institutions can really drive usage and spend and ultimately revenue and stickiness for their cardholders.”

Retention is crucial and should be the main focus for financial institutions. As Riley pointed out, it’s about more than booking an account. It’s having a lasting relationship with the customer and being able to get into the vertical integration of the household budget. “Having that balance of credit and debit with that relationship is good,” he said. “Being able to harmonize where the reward strategies are will have a long-term play in how that account performs with the institution.”

Similar to how merchants must provide a variety of payment method options to keep and retain loyal customers, card issuers must offer a variety of redemption options.

“Loyalty participants are engaged in a loyalty program due to how they can redeem,” Scheel said. “Roughly 40% of folks have said they pick a rewards partner because of where they can redeem their points. Another interesting stat is 60% would prefer to use their points at the point of sale instead of cash back, so cash is always king. But offering a differentiation of redemption options and making them relevant to your cardholders is absolutely critical.”

Most cardholders seek out the best rewards program before applying for a credit card. And in the end, consumers earn points because they want to eventually use them.

“Whether it’s a trip to Hawaii (or something else), we save up,” Scheel said. “Travel redemptions tend to be very high in Q3 and drop off in Q4, and that’s because people are traveling in Q4, so they book the travel in Q3 with their points. Conversely, gift cards tend to be purchased more often around Q4 because they’re shopping for the holidays.”

The growing trend that card issuers must be aware of is where consumers prefer to use their redemptions. Use at the point of sale is growing in popularity, Scheel said.

“We experienced a shift in Q4 last year of about 6% of the redemptions that typically had been for cash had shifted over to pay with points,” Scheel said. “People prefer to be able to spend at a place where they were going to spend anyway, but getting that extra benefit of using their points instead of always having to use cash.”

Establishing card loyalty programs within the debit space holds a lot of opportunity, as the spending value tends to be considerably higher. By adding a rewards program, spending amounts can increase even more dramatically.

Financial institutions should examine their card portfolio holistically and look across the different sectors to target market each.

When it comes to forming key partnerships, it is important to offer a wide range of redemption options. You should also be free to market and communicate these available options to your customers regularly.

Real-time payments through the RTP® network have gained significant traction, presenting valuable opportunities for businesses to optimize cash flow and improve their operational efficiency. As the the FedNow® Service expands availability in 2023, the impact of instant payments is set to grow even more. Industries such as payroll and transportation have been early adopters, leveraging real-time payments to accelerate wage access and speed up payments for sales.  

In a recent PaymentsJournal podcast, Adam Carter, VP of Faster Payments, Global Treasury Management at U.S. Bank, and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, explore the specific sectors and use cases driving the adoption of real-time payments and the transformative potential they hold for businesses in the coming years. They also address a surprising finding: Contrary to expectations, real-time payments have fueled transaction growth without displacing traditional payment methods like ACH and wire transfers.  

When banks were getting ready to launch real-time payments through the RTP network, they believed it would mostly be used for business-to-business transactions. But after the network launched, they realized that assumption was wrong. “Instead, there was a significant amount of -business to consumer and even person to person activity,” Carter said. “They didn’t anticipate how innovative fintech partners would be in using the network to improve their clients’ experience with services like digital wallets.”  

In many cases, younger people are driving the adoption of RTP.  

“While we do believe that older generations will also catch up and start using these services, initially, it was mainly younger people who embraced them because they are used to this kind of instant interaction,” Carter said. “There definitely seems to be a demographic factor at play here.” 

With the rise of the gig economy, getting quick access to wages has become the norm. Even employees working in large retail stores can now access their daily wages through various earned-wage providers.  

“It’s not just about Uber; that’s just a good example,” Carter said. “After working a few hours as an Uber driver, you can access a portion of your earned wages with just a few clicks and have it in your account instantly. This allows you to use the money right away for things like buying groceries or filling up your car with gas, helping you on your financial journey.” 

In recent years, the real-time payments space has grown enormously. Services like Zelle, Visa Direct, MasterCard Send, and the upcoming Fed Now Service have brought about shifts in customer habits when it comes to financial interactions.  

Previously, customers would keep money in separate accounts and wallets without frequent or fast transfers between them, as traditional methods like ACH transfers took several days. However, with the emergence of real-time rails, customers can now move funds much faster and in different ways from before. Digital wallets, once used occasionally for personal transactions, are now being utilized by small businesses that require immediate access to funds for operations and purchases.  

“The ability to move funds instantly has made these services more consumer-friendly,” Carter said. “Moreover, the introduction of real-time payment systems has led to overall transaction growth, with many transactions being entirely new and not cannibalizing existing methods like ACH and wire transfers.” 

According to Bodine, there was an initial belief that real-time payments would replace ACH and wire transfers. “The prevailing wisdom has now shifted to the coexistence of different payment methods,” Bodine said. “The original expectation of instant payments overtaking ACH and wire transfers has been proven wrong.” 

Early adopters of real-time payments can be seen in three key industries. First, the fintech sector has leveraged real-time payments for various services, including digital wallets and similar platforms. These were among the initial adopters, and they have experienced significant growth.  

Second, industries related to payroll have embraced real-time payments for accelerated wage access, employee reimbursements, and travel expenses. The immediate availability of funds has proved a valuable benefit for consumers.  

Third, the transportation industry, particularly in freight movement and trucking, has seen a notable adoption of real-time payments. Timely disbursements play a crucial role in this sector, and real-time payments enable efficient and just-in-time delivery of funds upon the arrival of freight at its destination. 

Bodine relates a good example of how real-time payments have taken off in his home state of Indiana. 

“In my agricultural area in Indiana, where checks were commonly used, I’ve noticed that small businesses, such as agricultural suppliers and tractor maintenance providers, are now accepting real-time payments, via iPhones,” Bodine said. “Another example: Beverage companies delivering to stores, like 7-Eleven, are starting to receive real-time payments instead of issuing checks. 

“It’s fascinating to see how real-time payments are infiltrating the traditional check and cash systems in these areas.” 

Carter concurred and provided an additional example of how RTP is infiltrating markets with an example from a U.S. Bank client, Driveway.com. 

“Previously, when Driveway acquired or sold vehicles, they would give customers a check,” Carter said. “With real-time payments, customers can now process the payment request while the driver is present, and the funds instantly appear in their account.”  

The ability to see the money in their account immediately adds to the positive experience of the transaction. Furthermore, Bodine notes that there is also satisfaction in being able to send funds immediately.  

“Similar to the mentality behind using cash, people want the reassurance that the services they’ve received are paid for in real time,” Bodine said. “Instant payments provide a social and psychological aspect where individuals feel a sense of security and immediacy in completing transactions.” 

Different instant payment services, like the RTP network and FedNow Service, are expected to coexist to meet the growing demand for fast and convenient transactions. The Federal Reserve has developed the FedNow Service as its own instant payment solution. The FedNow Service began roll out in July 2023 and will expand availability over the next few years. Instant payment services will likely involve servicing both payment rails.  

Cross-border payments are also set to expand, with the key to success lying in collaboration between banks and networks.  

“Building a real-time network within a single region, such as North America, is relatively straightforward due to the integrated economy,” Carter said. “But expanding beyond that requires careful consideration and partnerships with networks in different countries.” 

The current interest rate environment is also a boon to the adoption of real-time payments. “Real-time transactions enable customers to retain their funds for longer, allowing them to leverage and earn interest on their cash longer before making payments,” Carter said. “This shift has led to businesses considering a transition from traditional ACH payments to real-time payments, as it allows them to maximize the value of their funds by extending their days payable outstanding.” 

In the next year or two, instant payments will have a transformative impact on businesses. Businesses need to understand how the movement of money in real time will affect their back-end operations and be prepared to adapt their processes accordingly. 

“A significant percentage of businesses (around 56%) are already planning to use instant payments by the end of 2024, and the remaining businesses should begin working on implementing it as well,” Carter said. “However, integrating instant payments into existing business processes and procedures will require careful consideration and potential adjustments.” 

From a banking perspective, it is crucial for institutions to be prepared to receive instant payments. Regardless of the size or type of bank, being on the instant payment rails in receive mode is essential.  

“Customers will seek out banks that can facilitate instant payments, and banks that fail to provide this service may risk losing customers,” Bodine said. “Therefore, banks should prioritize developing strategies to enable instant payment receipt and subsequently focus on implementing the capability to send instant payments as well.” 

As younger generations embrace the convenience and immediacy of real-time payments, businesses and banks must adapt to integrate these systems and meet customer demands. Collaboration between banks and networks, the expansion of cross-border payments, and the potential for longer fund retention for interest rate benefits further highlight the transformative potential of real-time payments. It is crucial for businesses and banks to understand and prepare for the impact on their operations and stay competitive in the evolving financial landscape. 

One of the most significant shifts in the payments landscape is the digital-first revolution. Digital payments have become pervasive, making financial transactions faster, more secure, more convenient, and more efficient.

During a PaymentsJournal podcast, Erika Dietrich, Vice President, Global Fraud Prevention Risk Services at ACI Worldwide, and John Buzzard, Lead Analyst for Fraud & Security at Javelin Strategy & Research, shared what it means for merchants to adopt a convenience-first approach for payments and the role of 3D Secure.

Consumers today continue to seek ways to purchase products, pay their bills, and even obtain banking services through digital methods. These capabilities are continuing to expand into other purchases.

“I recently purchased a car, and the only thing that I did physically in person was drive the car,” Dietrich said.

“The legal agreement, the loan, as well as the insurance and DMV, it was all done over my mobile phone. Everything is becoming very, very digital.”

To keep up in this convenience-first environment, merchants must ensure they are offering the payment methods consumers wish to use—whether that’s Apple Pay, BNPL, or real-time payments.

Additionally, with customers desiring more digital transactions with less physical contact, it is vital that all data is authenticated to verify the identity of the customer.

But with the advent of any new technology, a lot of testing occurs and much remains a work in progress. That’s why it’s crucial that continued improvements are made and customer satisfaction is achieved.

With the growing consumer demand for the newest payment methods, orchestration is a powerful tool to streamline the payment development process. By using orchestration, companies can leverage their current infrastructure, develop new workflows, and create new integrations to support new payment technologies in a more cost-efficient manner.

“One of the things that I find incredibly annoying is what I call the duplication of inconvenience,” Buzzard said. “When you enter an IVR and you enter your date of birth and your social, you’ll eventually find yourself, sometimes during a customer journey, in front of a representative of that company. And then it’s all repeated again.”

“And it might even be repeated to the extent that you as a consumer are wondering, ‘Does this company have their act together?’ It’s important to not just think of seamless client experiences like this platitude or verbal cliche that we can slip into sometimes, but it’s really important.”

With more payment transactions occurring digitally, an inevitable rise in fraud has followed. 3D Secure offers an extra layer of authentication for debit and credit card transactions. To complete a transaction, a customer is asked to provide proof of identity via a temporary PIN, an SMS code, or a unique password.

“If 3D Secure is not implemented correctly, it can certainly cause cart abandonment if the consumer doesn’t want to go through the friction process,” Dietrich said.

“It is important that merchants are adopting and utilizing sophisticated tools such as your behavioral components, your device components, your geographic location, IP address to collect that information to ensure that the consumer doesn’t have friction, doesn’t have to put their password in because all of that compelling information reduce the friction for that end user.”

Although 3D Secure plays a vital role in protecting online transactions, Dietrich noted that 3D Secure is not so much about detecting and preventing fraud but about inputting qualifying data points to enable a fast approval process. With banks adopting new APIs to collect this qualifying information from the merchant and the consumer, the issuer and the acquirer have full confidence that the customer is who they claim to be.

As technology moves forward, the implementation and adoption of these solutions by businesses will become table stakes.

“It’s just the way that business must be done now to create that ultimate experience that keeps people coming back,” Buzzard said. “Sometimes people say a cult-like movement to use or patronize business. This is part of it. You can’t lock the door on good customers. The whole focus is to keep the bad guys out and let the good guys in.”

With merchants setting their sights on expanding their customer base and boosting revenue by taking their online business globally, they will need to accurately determine the digital identity of the consumer. They must also ensure that the data has been evaluated in real-time, using various fraud prevention tools.  Some of these tools can include Behavioral Analytics, Device ID,  authentication tools, soft credit checks, and machine learning.

Doing so will help merchants protect themselves from common fraudulent acts, including those that may occur when new accounts are open or through account takeovers.

Although there are various solutions for verification being deployed in the United States, these current systems have a long way to go to make the process more efficient.

“I had a different way to authenticate and verify who I was with my insurance company,” Dietrich said. “I had a different method for the loan agency and a different method for the DMV. Now myself, as a consumer, I went through three different authentication and verification processes for those different platforms through those providers. One was voice, one was a PIN, and one was my biometrics, my face.

“Going through that experience, it would be ideal if there was an easier or more consistent way that this was done across all of those platforms. But that utopian society may not occur for us anytime soon, but let’s see what our future holds for us.”

Buzzard believes that when it comes to mandates and execution, it could be too little, too late.

“The parade just kind of passed us by, by the time you meet a mandate,” he said. “Technologists have to take a really big paintbrush and dream a little further out to kind of encompass what’s going to happen because it worries me when we just keep meeting the minimum without thinking about what else is happening in the world.”

“Things that are happening outside of the United States will eventually come here. We’re rather slow in the adoption process, but as we see other things happening, we’re going to get both those problems and great solutions mixed together.”

As consumers increasingly embrace and adopt digital payments, merchants must be keen to provide the methods they prefer to ensure consumers have plenty of choices, thereby building trust and brand loyalty.

As the expansive digital payment landscape grows, bad actors are always on the lookout for the weakest link and how to profit from these blind spots. Although government mandates have been indicated to protect merchants and consumers from the latest fraud attacks, that’s simply not enough. Attacks are increasingly more sophisticated, leveraging the latest technology. Merchants must also balance the importance of ensuring that genuine customers enjoy a seamless experience. This requires a solution that can verify a transaction in milliseconds. It’s all about striking a balance.

Even then, consumers will still need to be authenticated before purchases are approved. However, that authentication must not give way to friction. It is a delicate balance, and only time will tell how the payments industry will navigate the tricky waters of authentication and fraud prevention. ACI’s fraud management solution uses digital identity services and leverages behavioral attitudes, as well as AI features to offering a 360-degree panorama, using its analytics platform.

Fraud prevention is not just about protecting consumers in this ever-complex landscape, but it gives merchants the opportunity to capitalize without losing on returning consumers. As merchants enter different realms of businesses and go beyond borders to attain new customers, their fraud solution should compliment their business activities. A solution which is agnostic of a consumers preferred payment method, region, channel, and understands the power of data orchestration and leverages AI to detect, decide, and deliver—in real-time.

It’s a mistake for financial institutions to not offer commercial and small-business card programs. If businesses don’t obtain the desired card program from their current institution, they’ll seek it elsewhere—and this not only jeopardizes the immediate relationship but also opens the door for competitors to capitalize on the opportunity.

During a recent PaymentsJournal podcast, Bob Zeena, Head of U.S. Credit Solutions at FIS, and Albert Bodine, Head of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed how offering commercial and small-business card programs as part of a financial institution’s comprehensive service offerings can lead to new business and increased profits.

When card programs are offered, it’s important to have a dedicated strategy that considers a company’s customers and how to best serve them.

“If your customers primarily consist of small businesses, you should consider a card program that is similar to consumer cards,” Zeena said. “This could include rewards-based features that allow smaller businesses to make transactions easily, whether it’s in-person (card present) at places like Home Depot or online (card not present) at platforms like Amazon.”

However, for larger or midsize businesses—such as commercial enterprises—the approach is different. According to Zeena, organizations will need to provide compelling reasons for their customers to choose their card program over alternatives.

“Consider the three R’s for commercial and small-business cards: rewards, rebates, and reporting,” Zeena said. “You may offer all three or a combination of them to make your program attractive.”

Small businesses value having a longer period to pay their bills rather than instant payments that take money out of their accounts in just a few seconds. It’s important for financial institutions to remember this, especially as they develop strategies for the SME sector.

“Working capital is a key concern for small businesses,” Bodine said. “They want to manage their cash flow effectively, which means having the flexibility of extended payment terms.”

Although instant payments may be popular, working capital is a vital component for small and larger businesses.

“Card programs can be a great solution because they typically offer a pay-in-full option within a 30-day window,” Zeena said. “However, for smaller small businesses, a revolving credit product may be more suitable. It’s essential to consider working capital as a crucial factor in your offerings because that’s what your customers will be looking for.”

Once a card program is established, businesses will want to measure its success, and a few factors bear consideration.

Because financial institutions benefit from the revenue generated through interchange fees, they can measure success by focusing on purchase volume. However, as Zeena notes, it’s important to go beyond revenue.

“Implementing a card program opens up opportunities to expand the overall payments strategy of the institution,” Zeena said. “One option is to offer an integrated payables product, which combines various payment methods like ACH, checks, and wire transfers, all supported by a file feed system.”

By presenting these additional payment solutions to business clients, the institution increases its value proposition and customer retention. The more payment options available, the stronger the relationship with customers and the less likely they are to switch to a competitor.

“Customers today seek choices in payment methods, and the entire payables ecosystem is expanding,” Bodine said. “Offering ACH, wire transfers, and other payment options alongside a card program doesn’t necessarily mean cannibalizing the card business. Instead, we’re observing growth in all payment instruments as customer preferences diversify.”

When it comes to the payments spectrum, financial institutions earn the most revenue from card transactions. However, although card payments are prioritized due to their revenue potential, it’s crucial to acknowledge that not everything can be transitioned to cards, Zeena said.

“ACH and check payments still have their place and are widely used by many businesses,” he said.

A well-rounded strategy considers all payment methods and allows for smart supplier enablement efforts to drive spending in the desired direction. Ultimately, card payments take the lead in terms of revenue for financial institutions.

Many financial institutions haven’t fully embraced small-business or commercial card programs. Small businesses are a great entry point for financial institutions, and even consumer banks have many small-business customers. Commercial programs are more complex, but larger institutions are recognizing their importance and either considering or already implementing them.

“The key message is not to let another financial institution or third party take away your customers by not offering a simple yet effective tool for managing their business expenses,” Zeena said.

It’s surprising to see how little penetration there is in this area, but it’s a significant growth opportunity.

“There are partners, such as branding and processing partners, as well as consultants who can assist with credit underwriting and other aspects,” Bodine said. “Don’t be afraid of it, but instead, consider the potential revenue and the competitive advantage it brings to your institution.”

With the rise of digital banking and online payments, the use of checks has undergone a massive shift. In 2021, the Federal Reserve processed 14.5 million checks per day, a dramatic drop from the daily 26.7 million daily it processed 10 years earlier.

The average dollar amount of checks went up during the same period—from $1,187 in 2011 to $2,395 in 2021.

With mail theft on the rise and more ways that fraudsters are modifying existing checks to display their names, checks are more vulnerable than ever to fraud even as their use declines.

During a recent PaymentsJournal podcast, Steve Bartels, Senior Director of Solutions Consulting at Q2, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, discussed how financial institutions must let their business clients know they are doing everything possible to protect them from fraud and address their needs.

Mail theft is on the rise, contributing to the surge in check fraud. Beyond the theft of checks directly from mailboxes, there have been instances of stolen mail trucks.

In some cases, the ease of modifying checks contributes to the rise in fraud. Many criminals are able to simply wash and modify the payee name on the check and alter it.

“In 2021, we saw a huge hockey stick growth in check fraud, and Q2’s Positive Pay system has about 600 banks across the country using Positive Pay,” Bartels said. “In 2021, we stopped and identified about $350 million in checking ACH fraud, and in 2022 it was more than double at $720 million. I looked at the first quarter numbers of this year, it was closer to $200 million in the first quarter. So we’re certainly still on that increasing track of fraud.”

Amid the increased check fraud—and with fewer checks being processed by the Federal Reserve—checks aren’t on their way out just yet.

“The death of the check is greatly exaggerated,” Riley said. “Checks will be around just like cash will be around for many years to come. And to show you how relevant it is, start looking at faster payments. Right now, clearances are starting to go in through so quickly on checks, whether they’re ACHs or physical checks. Certainly, that route comes into play, and that’s really one of the areas that attracts fraudsters. There’s lots going on in the space, and everybody’s looking at things like faster payments, but it’s those little nooks and crannies that really can be a risk area for people with financial institutions.”

A 2023 AFP Payments Fraud Survey found that Positive Pay is the solution used by most organizations to protect against check and ACH fraud. Bartels believes many choose this solution because their customers are more intimately acquainted with check and ACH transactions. Essentially, they’re more likely to have insight into the checks they wrote and what ACH payments or debits should be posted to their accounts.

“One of the best ways to find fraud on your account is to reconcile your account every day,” Bartels said. “And one of the features that we have in our Positive Pay system is the ability for corporates to go through and do daily account reconciliation.

“Positive Pay systems take the financial institution’s back office out of the entire process. When you can push those decisions and that research down to the individual corporate or business entities, it’s a lot easier for banks and credit unions to let those folks do that again because they are much closer to their own payment activity.”

As many organizations tackle budget cuts, paying for another solution such as Positive Pay may not be an option. But taking it on now may help businesses in the long term.

The way Bartels explains it to his credit union and banking customers is that instead of thinking of Positive Pay as an expense center, they should see it as a revenue generator and a way to increase customer awareness and build brand loyalty.

“Financial institutions are actually requiring their business clients to adopt Positive Pay, especially if they’ve had fraud on their account,” Bartels said. “And if they don’t want to do that, then to sign a waiver that in fact a fraud does occur, that the bank’s not going to be held responsible for it.”

Said Riley: “It’s more than just money here, too. When you get into where the Federal Reserve looks at for safety and soundness in general, there’s seven characteristics, and one of them is reputational risk, and you don’t want to be out on a perch by yourself and having to contend with those problems.”

Despite the declining use of checks over the past decade, they are still an important form of payment for businesses and consumers. With the increased prevalence of check and ACH fraud, it is more important than ever that financial institutions implement solutions such as Positive Pay to protect and mitigate against fraud. Riley reiterated that checks are not going anywhere, but they do need attention and tools that are current to be able to address the challenges of the current payment landscape.

Learn more about using fraud management as a revenue generator and competitive differentiator.

Open banking holds significant promise for changing the financial system for the better. With the ability to access and share their own financial information, individuals gain greater control over their data while enabling more efficient and tailored financial services. For banks, it has the potential to reduce security risks and open up new product ideas in the field of identity verification.

During a recent PaymentsJournal podcast, Caitlin Sinclair, Director of Proposition Development in Financial Crime at GIACT, an LSEG Business and James Wester, Co-head of Payments at Javelin Strategy & Research, provided insights into the state of open banking, the challenges it faces, and the potential for self-sovereign identity to revolutionize data control. They also spoke about how businesses can use open-banking tools more effectively, as well as the new consumer products open banking is likely to enable.

Although open banking does not have a fixed definition within the industry, in simple terms it allows individuals to access and share their own information held by financial institutions.

In some regions, government and regulatory bodies have played a large role in promoting open banking. The push for U.S. open banking has mainly been driven by industry and commercial interests.

Open banking in the United States involves a few key players. There are the traditional banks that hold the data that open banking enables consumers to share with third parties of their choice, such as fintech companies. There are also third parties such as smart budgeting apps, insurance providers, and neobanks. And let’s not forget the connectivity provider, which facilitates the interaction among the third-party services, the bank account, and the account owner.

“Open banking initially started with banks and international initiatives, like those in the UK, aimed to create a more level playing field and empower individuals to determine what they want to do with their banking data,” Sinclair said. “This has led to the emergence of useful tools such as smart budgeting apps and dynamic fintech apps that help individuals manage their finances more conveniently.”

Open banking is a form of democratization in financial services, and it allows individuals to leverage the information held by banks without necessarily going through traditional banks for every interaction. Instead, they can benefit from tailored financial services provided by third-party companies that excel in user experiences.

For consumers, the term “open banking” may not mean much, even though around 80% of consumers are likely to have used it.

“Open banking is just a method or tool that allows consumers to access third-party services or verify payment details,” Sinclair said. “What’s important for consumers to know is that open banking operates based on their consent. No one can access their data without their explicit permission. And consumers should have the ability to easily withdraw their consent if they feel it’s no longer necessary or applicable to the third parties involved.”

The challenge lies in making customers aware of the risks associated with open banking, especially if they are not familiar with the concept. Providing clear information about the workflow and purpose of data sharing can increase customer buy-in.

“Education about potential risks is increasingly important in the U.S., where the development of open banking has been more industry-led rather than regulatory-led,” Sinclair said. “However, the Consumer Financial Protection Bureau is expected to introduce guidelines and parameters to inform users about data usage and consent control.

“The success rate of connecting accounts and receiving information through open banking can vary greatly, with factors like understanding the rationale behind data connection playing a significant role. By designing workflows that help customers comprehend the reasons for sharing their data, we can build confidence and increase their willingness to participate.”

Although it seems likely that open banking will continue to flourish, some factors—including economic ones—could derail its progress.

“Companies operating in the fintech space have realized the importance of having a solid business plan that generates revenue from customers and allows for long-term sustainability,” Wester said. “This realization has been a wake-up call for some companies that initially relied heavily on funding without a viable profit-generating model.”

Another factor could be regulatory changes or pushback, but according to Sinclair, as long as the major players offering open-banking capabilities have designed their products with data privacy in mind, they should be resilient.

“Looking ahead, the emergence of concepts like self-sovereign or permissioned data sharing, associated with distributed or self-sovereign IDs, could also impact open banking,” Sinclair said. “However, permission-based information sharing is likely to become the norm in the medium term.”

Open banking is just the beginning of a broader evolution where data is not siloed but shared responsibly. The fundamental principle behind open banking is that consumers take control of their own data and decide how and where it’s shared.

“We are only scratching the surface of what’s possible with data sharing,” Wester said. “Web 3 technologies allow us to share specific pieces of information, fueling new experiences in areas like virtual or augmented reality and transforming how we buy, rent, and access goods and services. The potential for new and exciting developments is vast.”

Sinclair shares Wester’s optimism, particularly around the personal control of data that underlies open banking. One direction where this might lead is the concept of self-sovereign identity, where individuals have control over their own digital identities. This identity could be customizable to the role the consumer is adopting.  

“This means that you can have different personas or roles, like your work self, your parent self, or your regular self, each with associated data and information,” Sinclair said. “This allows for greater flexibility and personalized experiences across various sectors, not just banking.

“Imagine being able to connect your social interactions or even healthcare information to your self-sovereign identity and being able to share specific data on a permission basis when needed. It’s not just about banking or financial services, but about creating a broader ecosystem where this buildable identity can be utilized.”

Another positive of self-sovereign identity is that individuals can potentially separate and share only the specific pieces of information that are necessary without revealing everything.

“When you buy a beer, you don’t need to share your entire driver’s license with details like your weight or hair color,” Wester said. “You could provide just the relevant information, like your age, in a binary yes/no form. That way, you have more control over your identity and can tailor it to different contexts.”

Personal data is often stored in multiple places by different companies, which can be risky. If a single company holds everyone’s information and experiences a security breach, the consequences could be severe.

Sovereign identity is different. Instead of one company having everyone’s data, different pieces of information can be held separately and accessed only with the owner’s permission through specific channels. This will be helpful to individuals in terms of controlling their data and reducing the administrative burden. For customers, part of the selling point is a user experience that enables efficient and secure access to financial information, minimizing friction.

“In the future, the hope is to move away from archaic methods like passwords and find more convenient and secure ways to authenticate and manage personal data,” Wester said. “This would eliminate the hassle of remembering multiple passwords and streamline user experiences.”

The shift in data management has commercial benefits as well.

“The current model of data silos and fragmented security measures is unsustainable,” Wester said. “Companies don’t want to bear the high liabilities associated with data breaches or mishandling customer information. They will likely recognize the need for a more secure and responsible approach to data management.”

The concept of self-sovereign identity holds promise, allowing individuals to customize their digital identities and share specific information on a permissioned basis. This shift toward responsible data management and enhanced user experiences will not only benefit consumers but also drive businesses to adopt more secure and responsible approaches to data protection. The future of open banking is poised to revolutionize the way we interact with financial services, laying the foundation for a more transparent, efficient, and personalized ecosystem.

In a recent white paper, GIACT (an LSEG business) explores the current uses for open banking products and their impacts to date, explores future applications, and helps firms understand how they can use the emerging suite of open banking tools to improve outcomes—for their organization and customers. Download now: https://lseg.group/OpenBankingWP