By NEACH
Wrestling Payments is a podcast for professionals working at banks, credit unions, and FinTechs who are responsible for managing ACH and payment operations. In each episode, members of NEACH guide
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EPISODE SUMMARY
In this episode of Wrestling Payments, host Joseph Casil talks with Steve Wasserman from Photon Commerce about the growing importance of ISO 20022 and its impact on the global payments landscape. Wasserman delves into how this emerging standard is transforming instant payments and financial messaging by providing a more structured and data-rich approach to payment transactions.
Wasserman explains the benefits of ISO 20022, including its ability to support more detailed payment information and enable faster, automated processing. He highlights how this standard is being adopted across payment systems worldwide, such as FedNow and RTP, and how it improves interoperability between financial institutions, paving the way for global payments integration.
The conversation also covers the future of instant payments, the role of AI in fraud detection and compliance, and how businesses can leverage ISO 20022 to streamline their processes. Wasserman encourages payment professionals to embrace the standard to stay competitive in the evolving financial landscape.
GUEST-AT-A-GLANCE
Steve Wasserman
Technology Architect
Photon Commerce
LinkedIn
Noteworthy: Specializes in ISO 20022 and instant payment innovations, with years of experience in fintech.
KEY INSIGHT
ISO 20022 is Revolutionizing Global Payments
ISO 20022 is transforming how payment systems operate globally. Steve Wasserman explains that this emerging standard allows for a more structured and data-rich messaging format, which enables better automation and transparency in financial transactions. ISO 20022 is being adopted by systems like FedNow, RTP, and SWIFT, helping institutions streamline operations and enhance interoperability. The added benefit of detailed remittance information means businesses can automate straight-through processing, reducing errors and manual intervention.
Request for Payment Solves Key Payment Issues
One of the key features of ISO 20022 is its support for "Request for Payment" functionality. Wasserman explains that this capability allows businesses to request payment from a payer without needing to rely on traditional debit mechanisms. The payer can schedule or approve payments, providing more control and reducing the risk of failed transactions. This innovation is especially useful for businesses that need flexibility in payment timing, making it easier to meet deadlines without incurring late fees or dealing with business interruptions.
AI and ISO 20022 Enhance Fraud Detection
Steve Wasserman highlights how ISO 20022’s structured data format works seamlessly with AI to boost real-time fraud detection and compliance capabilities. Because ISO 20022 includes rich, detailed data fields, AI tools can analyze transactions more effectively, identifying patterns that signal fraudulent activity. This integration of AI helps financial institutions respond faster to potential threats while enhancing their ability to comply with regulatory requirements. Wasserman underscores that as the financial ecosystem grows more complex, the combination of AI and ISO 20022 will become increasingly important for maintaining secure, efficient payment systems.
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EPISODE SUMMARY
The U.S. payment system stands on the verge of a monumental shift. The Federal Reserve is proposing 24/7 operations for the National Net Settlement System (NSS), the backbone of payment finality. This means no more "lights out" on weekends; wires, ACH, and other payment types could flow around the clock.
In this episode of Wrestling Payments, Joe Casali wrestles with this complex topic alongside Sean Carter, President & CEO of NEACH. Sean acknowledges the upsides: reduced settlement risk, increased liquidity, and alignment with global standards where 24/7 payments are becoming the norm. However, he also points out significant concerns, particularly for financial institutions.
Staffing for round-the-clock operations, ensuring downstream applications like online banking and core systems are ready, and bolstering fraud prevention measures in a faster-paced environment are just some of the hurdles. Sean highlights the potential impact on smaller institutions, questioning their ability to adapt without significant burdens. Will this proposal revolutionize payments or leave some players struggling to keep up? Tune in for a crucial discussion.
KEY INSIGHTS
24/7 Settlement: A Game Changer with Growing Pains
While round-the-clock payment processing offers advantages like reduced risk and global consistency, it presents a massive operational challenge. Smaller financial institutions, in particular, face concerns about staffing and technology upgrades to handle the constant flow of transactions. The industry needs to address potential burdens and ensure a smooth transition, not a mad scramble to keep up.
Beyond the Network: Downstream Readiness Is Crucial
Successfully implementing 24/7 settlement goes beyond connecting to faster payment networks. Financial institutions must ensure their core systems, online banking platforms, and customer-facing applications are all equipped to reflect real-time transactions accurately. Otherwise, businesses and consumers could face confusion, errors, and a lack of clarity about their finances.
Optional Participation, Inevitable Pressure
The Federal Reserve proposes making 24/7 settlement optional for financial institutions. However, competitive pressures could render this option meaningless. To avoid falling behind, institutions may feel compelled to participate, even without adequate preparation. This highlights the need for industry-wide collaboration and support during the implementation process.
EPISODE HIGHLIGHTS
The ACH Question: Will Faster Settlement Mean Weekend Transactions?
Timestamp: [00:16:00]
While the initial focus is on National Net Settlement, the potential impact on specific payment systems like ACH is a key consideration. Sean notes that 24/7 settlement could open the door for weekend or late-night ACH processing, which presents its own set of challenges. NACHA, the governing body for ACH, will need to address rule changes, return timelines, and the definition of a "banking day" in an always-on environment.
"So we've been trying really hard to tell our members this is not an ACH piece. Right. This would be something that the ACH network could then entertain and would have to go through their own rulemaking process, which NEACH would be a part of obviously, as a direct member and voting member of NACHA."
A Tale of Two Coasts: Time Zones and the Same-Day Settlement Puzzle
Timestamp: [00:20:00]
This shift could potentially level the playing field and offer greater flexibility for processing transactions.
"The same happens with the same-day windows today. And those would be pushed back. There would be potential if the hours are expanded, where maybe on the West Coast that becom
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[Podcasters note: In this episode we show our real passions for payments and appear not as CEO & EVP, but more as "two guys from Boston" as we tackle the alarming rise of scams and financial fraud.]
Joe Casali and guest Sean Carter, President & CEO of NEACH, dissect the recent "Chase Bank Glitch" where individuals fell prey to check kiting schemes. They discuss the importance of financial literacy, especially among younger generations, to combat scams that fund harmful activities like human trafficking.
Sean and Joseph emphasize the need for impactful awareness campaigns that connect fraudulent actions with real-world consequences. They explore the effectiveness of campaigns like "Don't Drink and Drive" and "Smokey the Bear" as models for conveying the gravity of falling victim to scams.
The episode concludes with a call to action: Listeners are urged to contribute ideas for combating financial fraud and to educate themselves about common scams. They highlight the availability of resources like the Federal Reserve Bank's Scam Classifier as a starting point for understanding and preventing scams.
Guest-at-a-Glance
Name: Sean Carter
What they do: President & CEO
Company: NEACH
Noteworthy: Sean has worked with NEACH for over 30 years. He is an accredited AAP and NCP advocating for financial institutions in the payments space.
Where to find them: LinkedIn
KEY INSIGHTS
The "Chase Bank Glitch" Exposes a Need for Basic Financial Education
The recent "Chase Bank Glitch" scam, where individuals attempted to exploit a non-existent banking error for financial gain, underscores a critical need for basic financial education. This event revealed a lack of understanding surrounding check kiting, a simple yet illegal practice. Educating individuals, particularly young people, on fundamental financial concepts can empower them to identify and avoid such scams. By equipping them with this knowledge, we can disrupt the cycle of fraud that preys on financial naiveté.
Successful Awareness Campaigns Connect Actions with Real-World Consequences
To combat scams effectively, awareness campaigns need to move beyond simple warnings and instead draw a direct line between fraudulent behavior and its real-world consequences. This connection resonates more deeply than simply stating facts or urging caution. Just as "Don't Drink and Drive" highlights the tragic results of drunk driving, scam prevention campaigns must effectively communicate the devastating impact of fraud on individuals, businesses, and society. By understanding these tangible repercussions, potential victims are more likely to internalize the message and protect themselves.
Financial Institutions and Consumers Share Responsibility in Preventing Fraud
While financial institutions play a crucial role in fraud prevention, consumers must also take responsibility for protecting themselves. The conversation highlights a potential imbalance where banks often bear the brunt of reimbursing victims while individuals may not always face consequences for their actions. Finding a balance between consumer protection and accountability is crucial. Financial literacy empowers consumers to make informed decisions, while clear communication from institutions can help prevent them from falling victim to fraudulent schemes.
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Episode Summary
In this episode of Wrestling Payments, host Joe Casali from NEACH sits down with Rusiru Gunasena, the head of the RTP network at The Clearing House, to dive into the evolution and current state of real-time payments in the U.S. Rusiru highlights the journey of RTP since its launch in 2017, emphasizing its growth and the increasing adoption among financial institutions. He shares insights on the network’s milestones, including handling billion-dollar days and expanding its reach to over 650 institutions, primarily community banks and credit unions.
Rusiru also discusses the various use cases that are driving RTP's success, such as B2B transactions, account-to-account transfers, and instant wage access for gig economy workers. He explains how RTP's real-time settlement and 24/7 availability offer significant advantages over traditional payment methods, making it an essential tool for modern financial transactions.
The conversation touches on the importance of interoperability with other networks, including the newly launched FedNow, and the ongoing collaboration with the Federal Reserve. Rusiru concludes by encouraging financial institutions not yet on board with RTP to start with a receive-only approach to experience the benefits of real-time payments.
Guest-at-a-Glance
Guest: Rusiru Gunasena
What he does: Vice President, RTP Product Management & Strategy
Company: The Clearing House RTP
Noteworthy: Rusiru Gunasena: Leader in real-time payments, overseeing the RTP network at The Clearing House, with extensive experience in payments and fintech.
Where to find Rusiru: LinkedIn
Key Insights
Real-Time Payments Transforming Financial Transactions
Real-time payments (RTP) are revolutionizing how businesses and consumers handle transactions. With its 24/7/365 availability, RTP allows for instant settlement, eliminating the delays and uncertainties associated with traditional payment methods like checks or ACH. This immediacy benefits both businesses and consumers, ensuring that funds are transferred and accessible in real time. The RTP network’s ability to support high-value transactions, now up to $1 million, opens up new possibilities for various sectors, including B2B transactions, insurance payouts, and instant wage access for gig economy workers.
The Growing Importance of Interoperability in Payment Networks
As new payment networks like FedNow enter the scene, the need for interoperability between these systems and established networks like RTP becomes crucial. Interoperability ensures that institutions and customers can transact seamlessly across different platforms, enhancing the efficiency and reach of real-time payments. While RTP was the first to market, ongoing collaboration with the Federal Reserve and other stakeholders is vital for aligning features and ensuring that the benefits of real-time payments are universally accessible, regardless of the network.
Request for Payment: A Game Changer for Bill Payments
The introduction of the Request for Payment (RFP) feature within the RTP network is set to transform bill payments. Unlike traditional methods where payments might be delayed or susceptible to fraud, RFPs allow consumers to receive and authorize bill payments securely through their bank’s channels. This feature not only enhances security but also gives consumers greater control over their payments, allowing them to authorize transactions only when they are ready. As this feature evolves, it is expected to bring significant improvements to the way businesses and consumer
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EPISODE SUMMARY
In the latest episode of Wrestling Payments, host Joe Casali is joined by Kevin Olsen, the Senior Vice President of Innovation and Strategy at Pidgin. They dive into the intricacies of onboarding the FedNow payment system, emphasizing the challenges and strategies involved. Olsen highlights the essential steps for a successful onboarding process, including the importance of knowing one's OAL (Officer Authorized List) and the significance of thorough testing to ensure a seamless transition. The conversation touches on the rapid adoption of FedNow, with Olsen noting the impressive number of institutions already onboarded.
Olsen also explains the operational and strategic considerations for financial institutions adopting FedNow. He discusses the necessity of involving key personnel such as IT, treasury, and authorized contacts from the outset to streamline the onboarding process. The discussion extends to the practical aspects of managing exceptions and ensuring continuous operations, even during weekends and holidays. Olsen reassures that while the system is designed to minimize exceptions, institutions must be prepared to handle rare cases without disrupting service.
The episode concludes with a look at the broader implications of instant payments and the potential for future developments in the payments landscape. Olsen provides insights into managing liquidity and security concerns, especially for high-value transactions. He emphasizes the flexibility of the FedNow system in accommodating various use cases and operational needs. Casali and Olsen's engaging dialogue offers valuable perspectives for financial professionals navigating the evolving world of instant payments.
GUEST-AT-A-GLANCE
Guest: Kevin Olsen
What he does: SVP Innovation & Strategy
Company: Pidgin
Noteworthy: Kevin Olsen, Senior Vice President of Innovation and Strategy at Pidgin, is known as the Payments Professor. He has extensive experience in onboarding financial institutions to payment systems like RTP and FedNow.
Where to find Kevin: LinkedIn
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Welcome to another episode of Wrestling Payments.
In this episode of Wrestling Payments, host Joe Casali dives into the transformative world of faster payments, focusing on the development and implementation of instant payment systems in the U.S. and globally. Casali discusses the journey from traditional ACH payments to the more advanced Real-Time Payments (RTP) and FedNow systems, highlighting the technological advancements and the growing adoption of these faster payment methods.
Joe explains the benefits and challenges of implementing faster payments, emphasizing the need for financial institutions to educate themselves and their teams about the nuances of these systems. He shares insights into the regulatory environment, technological requirements, and the critical role of understanding standards like ISO 20022 in ensuring seamless payment processing.
The episode also explores the practical implications for consumers and businesses, illustrating how faster payments can enhance liquidity, reduce settlement times, and improve overall financial efficiency. Casali's engaging storytelling and expert insights make this a must-listen for anyone interested in the future of payments.
To hear this episode and many more like it, listen here or subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts.
For show notes, transcripts, and other resources visit www.wrestlingpayments.com.
Host: Joe Casali, EVP, NEACH
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In this episode of "Wrestling Payments," host Joe Casali welcomes back Nanci McKenzie for a follow-up discussion on third-party relationships within the financial industry. Nanci, an independent consultant with extensive credentials in banking and risk management, shares insights from her session at PMC 2024. She emphasizes the evolving nature of third-party relationships, particularly the regulatory changes and guidance updates from agencies like the OCC, FDIC, and the Federal Reserve Board of Governors.
Nanci and Joe dive into the specifics of interagency guidance approved in 2023, which now includes fintechs and offers consolidated advice for banking organizations. They discuss the critical aspects of these regulations, such as consumer data protection, compliance requirements, and the implications of third-party relationships on risk management. Nanci highlights the importance of identifying and managing risks associated with third-party vendors, stressing the need for comprehensive information security programs and regular audits.
Towards the end of the episode, the conversation shifts to data privacy and the potential complications arising from the CFPB's new rule under the Gramm-Leach-Bliley Act. Nanci points out that financial institutions must ensure their third parties comply with these regulations to safeguard against data breaches and financial crimes. Joe and Nanci conclude by acknowledging the increasing complexity of compliance and the ongoing need for vigilance in managing third-party risks.
To hear this episode and many more like it, listen here or subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts.
For show notes, transcripts, and other resources visit www.wrestlingpayments.com.
Host: Joe Casali, EVP, NEACH
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In this episode of Wrestling Payments, Joe Casali and Kevin Olsen continue their discussion from the International Payments Alliance meeting by Nacha, diving into various topics surrounding payment systems and regulations.
They start by addressing the move in Germany to eliminate checks and explore how the reduction of paper transactions could simplify banking systems. Kevin points out that while checks have been a long-standing payment method, most use cases for checks can be replaced by instant or recurring payments, except for scenarios where checks are deliberately not meant to be deposited.
The conversation then shifts to comparing the regulatory frameworks and roles of service providers in the US and Europe. Kevin highlights that in Europe, service providers often have more direct regulatory oversight and higher requirements compared to the US. He discusses the implications of such differences on the efficiency and responsibilities of these providers.
Finally, they dive into the concept of Central Bank Digital Currencies (CBDCs) and the digital euro, reflecting on the controversies and discussions around privacy, technology adoption, and regulatory challenges. They note the contrasting approaches and advancements in digital payment systems between the US and other countries, emphasizing the potential and complexities of moving towards a more digital financial ecosystem.
To hear this episode and many more like it, listen here or subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts.
For show notes, transcripts, and other resources visit www.wrestlingpayments.com.
Host: Joe Casali, EVP, NEACH
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In this episode of "Wrestling Payments," host Joe Casali sits down with Kevin Olsen, also known as the "Payments Professor." The discussion kicks off with Kevin's signature introduction and his enthusiasm for making payments engaging. They delve into their experiences at the Nacha Payments Alliance international meeting in Berlin, where both were deeply impressed by the city's historical significance and the intense professionalism of its business community. Kevin shares his personal experiences of exploring Berlin with his son, highlighting the city's rich history and its mix of architectural styles.
The conversation shifts to the core of the episode: the insights and learnings from the Nacha Payments Alliance meeting. Joe and Kevin reflect on the valuable networking opportunities the event provided, allowing them to connect with key decision-makers in the global payments industry. They discuss the significance of the meetings, particularly the discussions on fraud prevention, and the innovative approaches being taken to tackle fraud globally. Kevin emphasizes the importance of the Payments Innovation Alliance meetings and how they bring together leaders from various countries to share their approaches and solutions to common problems in the payments landscape.
Finally, Joe and Kevin explore specific topics discussed during the meeting, such as the implementation of the Legal Entity Identifier (LEI) and the concept of verification of payee. They express their admiration for the collaborative efforts seen in Europe to enhance payment security and efficiency and ponder the potential challenges and benefits of adopting similar measures in the United States. The episode wraps up with reflections on the importance of such international collaborations and the shared goals of improving the payments industry worldwide.
To hear this episode and many more like it, listen here or subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts.
For show notes, transcripts, and other resources visit www.wrestlingpayments.com.
Host: Joe Casali, EVP, NEACH
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Today, June 15, is National Elder Abuse Awareness Day.
The Wrestling Payments podcast was started to discuss "wrestling" with payment topics. Topics like technology implementation and AI, but perhaps we've become so numb to the problems of Elder Financial Abuse and Human Trafficking, that the issues have faded into the background. I ask the Industry, how can we do better?
In this episode of Wrestling Payments, Joe Casali talks with Andrea Higgens, a Criminal Elder Abuse Investigator from the San Mateo County District Attorney's Office, and Patty Presta, Director of Education at NEACH. Andrea shares her 25 years of law enforcement experience, focusing on elder financial abuse and the critical role of financial institutions in preventing these crimes. Patty adds her insights from decades of advocacy and education on elder abuse prevention.
Andrea discusses the importance of suspicious activity reports (SARs) and how they can help law enforcement track and prevent elder abuse. She emphasizes the need for financial institutions to educate their frontline staff on identifying and reporting suspicious activities. Patty highlights the significance of cross-reporting to Adult Protective Services (APS) to ensure timely interventions.
Throughout the conversation, Andrea, Patty, and Joe explore real-life examples of how collaborative efforts between financial institutions and law enforcement have successfully protected elders from financial exploitation. This episode sheds light on the complexities of elder financial abuse and the continuous efforts needed to safeguard vulnerable seniors.
GUESTS AT A GLANCE
KEY INSIGHTS
The Role of Financial Institutions in Elder Abuse Prevention
Andrea Higgens emphasizes the crucial role financial institutions play in preventing elder financial abuse. She highlights the importance of suspicious activity reports (SARs) and cross-reporting to Adult Protective Services (APS). By identifying unusual transactions and collaborating with law enforcement, banks and credit unions can help protect vulnerable seniors. Andrea stresses the need for frontline staff to ask open-ended questions and be vigilant in detecting signs of abuse. She also suggests financial institutions host educational events for customers and their families to increase awareness and preventive measures. Empowering bank employees with knowledge and tools to identify potential abuse can make a significant difference in safeguarding elders from financial exploitation.
The Power of Cross-Reporting to APS
Andrea discusses the impact of cross-reporting suspicious activities to Adult Protective Services (APS). When financial institutions notice unusual transactions, they can trigger an investigation by APS, leading to timely interventions. She shares a success story where a bank's prompt cross-reporting helped uncover a significant financial abuse case. The abuser had liquidated large sums of money and taken ownership of the victim's home. Thanks to the bank's quick action and collaboration with APS and law enforcement, the victim's assets were recovered, and the abuser was prosecuted. This example illustrate
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