Amid a rapidly evolving digital landscape, cybercrime continues to be a persistent and growing threat for financial institutions, which need to remain vigilant and proactive in safeguarding their systems and customer data.

In a recent PaymentsJournal podcast, Patti Reid, Vice President of Card Risk Solutions at Fiserv, and John Buzzard, former Lead Analyst for Fraud and Security at Javelin Strategy & Research, delved into how financial institutions can contend with fraud threats by closing vulnerabilities, detecting multichannel fraud, and mitigating consumer friction.

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Current Trends in Financial Fraud

Technological advancements have contributed to the heightened sophistication of fraudster attacks—and fraudulent tactics have become so complex that they’re increasingly difficult to detect and prevent. Businesses must contend with phishing emails, fake websites and social media profiles, and identity theft, to name just a few.

“One of the things that we’re seeing an increase around is identity fraud,” Reid said. “Identity fraud is becoming more common for criminals because they have access to the information that we’ve traditionally used around authenticating.

“Victims are being preyed upon by criminals pretending to be the financial institutions. Additionally, data breaches have increased significantly around this and all of the traditional means of authenticating—either by being victims being scammed by criminals or the criminals going to the dark web and acquiring those means.”

Automation is also being used for nefarious purposes. Whether by sending thousands of phishing email messages at once or launching bots to detect vulnerabilities, automation is a powerful form of attack that occurs so swiftly that organizations have no time to react before damage is done.

“Criminals are very organized, but they’re also leveraging automation sometimes before legitimate financial service providers are, as is the case with things like bot attacks and scraping websites and trying to just assimilate information and put a dollar value on it,” Buzzard said. “And then they’re just obviously selling it back and forth to one another.

“The consumer is turned into this unwitting, involuntary mule of information and sometimes even money that’s moving back and forth. And it’s not their fault.”

Unified commerce is table stakes—but often misunderstood. For a truly compelling customer experience, retailers need to adopt a truly unified solution that brings their business’s backend closer to their customer.

Whether a customer is shopping in-store, online, or via their mobile device, unified commerce guarantees consistent pricing, promotions, and inventory levels—and establishes a fully integrated customer journey. 

During a recent PaymentsJournal podcast, Max Kirby, who works in Comms and Strategy at Stripe, Dil Hussain, Co-founder and CEO at Dines, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, dug into unified commerce, its role in the customer journey, and how it can enhance the overall consumer experience. 

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Understanding Unified Commerce 

When merchants first hear of unified commerce, the idea of omnichannel strategy also comes to mind—particularly as both involve developing a cross-channel shopping experience online and in-person. However, it’s much more than that, Kirby explained. Unified commerce means meeting customers where they are, throughout various channels and at any stage of the buyer’s journey. 

“I think people miss that it’s about bringing the front office and back office together,” said Stripe’s Kirby. “Unifying commerce means unifying both the customer’s commerce experience and the merchant’s commerce infrastructure.

“Merchants today want to sell direct to the customer, but also through retail partners. Maybe they’re an online marketplace, they may want to set up a loyalty scheme, they may want to offer membership subscriptions, and no matter the interface, they want to have a really coherent experience with the customer. So that’s how we think about unified commerce.” 

Through unified commerce, merchants can gather and connect all the essential data points as well as customer interactions, revealing a comprehensive view of their customers. Hussain, a Stripe client, explained it this way: “Unified commerce is about bringing all the data, all the information, all the kind of personalization that a customer may have remotely or on-site in a retail o...

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.

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ACH is a Booming Market

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,

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.

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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 Security in Payments

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 w...

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.

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The Rise of Government Mandates and Standardization Efforts

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,

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.

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The Increasing Benefits of Gift Cards

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...

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.  

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The Origins of Real-time payments 

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,

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.

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Leveraging a Hybrid Journey to Create a Seamless Customer Experience

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.

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.

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Strategies for Offering Business Card Programs

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.”

Business Cards Offer an Attractive, Longer Payment Cycle

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.

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.

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What’s Driving Increased Check and ACH Fraud

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.