Payments on Fire™

Fast payments will move the US payments market. But to get there, we need fintech to expose those capabilities. Zelle, the RTP Network, Same Day ACH, push to card, and eventually FedNow all need providers that connect up to those rails. For an enterprise or its software developers, a single integration to all sure would be easier. In this Payments on Fire® episode featuring Dwolla, you’ll hear: A practitioner’s view of how ACH and RTP differ and are being used? Why B2B digital payments are growing and what you need to know what’s enabling that growth Learn what a provider must do to bring multiple payment systems to its enterprise customers. It isn’t simple Take a listen to this conversation with Dwolla’s Brady Harris and Adam Steenhard as they talk about realtime access to fast payments (and more) with Glenbrook’s Elizabeth McQuerry and George Peabody. Come to the Payments on Fire® website for: Expanded show notes Video Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Curious about how fast payments systems like Zelle, the RTP Network, and FedNow work? Many fast payments use cases aren’t about speed. Find out why. Fast payment systems are national “must haves” around the world. Take a listen to this conversation with Glenbrook’s Elizabeth McQuerry and ACI Worldwide’s Craig Ramsey. Come to the Payments on Fire® website for: Expanded show notes Video snapshot Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Glenbrook’s fintech payment series continues with this look at Veem in a deep convo with Marwan Forzley, CEO. Curious about how fintechs solve client problems? Fintechs aren’t just about payments; they blend commerce enablement into their offerings The payment solution that solves the data problems - as well as moves the money - provides the most benefit to the customer Did you know that fintechs don’t do anything new? They just do it better. Take a listen to George and Veem’s CEO Marwan Forzley as they talk about how Veem built its international payment network for small and medium business (SMB) customers. Listen to Marwan describe the commerce services and integrations Veem has done to drive traffic over the network. Come to the website for: Expanded show notes Podcast transcript The complete catalog of Payments on Fire® episodes The Glenbrook Education schedule  

Curious about how fintechs solve client problems? Fintechs aren’t just about payments; they blend commerce enablement into their offerings The payment solution that solves the data problems - as well as moves the money - provides the most benefit to the customer Did you know that fintechs don’t do anything new? They just do it better. Take a listen to George and RoadSync’s CEO Robin Gregg as they take a deeper look into how fintech’s solve specific problems for specific industry segments. RoadSync provides payments and commerce services to the logistics and trucking industries. Come to the website for: Expanded show notes Video clip Podcast transcript The Payments on Fire® episode catalog The Glenbrook Education schedule

How do you secure bank to bank transfers between counter parties when the payment system itself lacks strong authentication? Can you balance the cost, speed, and security of transactions across multiple payment networks? In this episode of the Payments on Fire® fintech series, join Glenbrook’s Nicole Pinto and George Peabody as they speak with Eli Polanco, CEO and Founder of Nivelo. Her company offers risk scoring for ACH transactions to improve payment success rates and reduce fraudulent transactions. Listen as she speaks to her entrepreneurial experience and insight into the evolution of bank-to-bank payments. Show notes include: A look at the ACH and its advantages Useful links to other sources Podcast transcript Video snapshot The Payments on Fire® episode catalog The Glenbrook Education schedule  

There's a huge shift on the horizon. Want to learn about the state of cryptocurrencies in payments today? What about the entrepreneur’s journey in leading edge fintech and payments technology? Take a listen as Glenbrook partners George Peabody and Yvette Bohanan talk crypto, Diem, CDBCs, and the evolution of digital money with Ran Goldi, CEO of First Digital Assets Group. Goldi’s entrepreneurial story and experience with VC are well worth hearing as are his predictions for digital money’s future. Show notes include: A deep dive into cryptocurrency evolution Links to other sources Podcast transcript Video snapshot of Goldi's elevator pitch The Payments on Fire® episode catalog The Glenbrook Education schedule

Prepaid cards are the “apps” of the card world. Join George and Fiserv’s Head of Prepaid Dom Morea as they introduce prepaid’s twin modalities - open loop and closed loop - and then dive into how the gift card industry has morphed into a far broader set of uses cases. And plan to return for the next episode as they discuss open loop’s evolution. Card payments have four modalities: Charge Cards. There are charge cards that are a form of very short term credit, you pay off in full the monthly statement Credit Cards add the option of revolving all or a portion of the debt obligation and, if you do, you pay interest on those charges Both of these are products that we buy as consumers or businesses. And we’re paying with money we don’t have at the moment of the transaction. They are “pay after” products. Debit Cards. Debit Cards, on the other hand, are a feature of a specific checking account. It draws on funds that are available right now. It’s a “pay now” method. As soon as the issuer authorizes the transaction, a hold for that amount is placed on funds in your account. Prepaid Card. The final modality operates in “pay before” mode. That’s the prepaid model where funds have been placed in an account to be spent at a later date. Like debit, prepaid draws on funds that are already in place. In most cases, the prepaid funds owned by an accountholder are pooled in a single bank account. Prepaid is used in two different manners Open loop prepaid cards are network branded (think Visa and Mastercard). They can be used anywhere the network’s cards are accepted. The second approach is closed loop. This is the domain of the gift card where a merchant has pre-sold an obligation to provide goods or services up to the value in the prepaid account. Prepaid Use Cases Abound Prepaid is big business. Go into any chain drugstore and you’ll see a rack with both open and closed loop prepaid cards for sale. For years, the physical footprint of that “prepaid mall” has been the most profitable square footage in the store. The prepaid world has some very interesting dynamics. Unlike credit card products that may be issued to millions of cardholders and used for all kinds of purchases, a prepaid program may only serve a few thousand and may be locked down for special purposes. The Apps of Cards That’s why we think of prepaid as the “apps” of the card world. Prepaid lends itself to some very specific use cases and program types. In this first of two interviews with Dom Morea, Fiserv’s Head of Prepaid, we cover closed loop prepaid and some of the new and growing use cases Fiserv has supported, often driven by COVID-19. Here’s Dom discussing B2B use cases for closed loop prepaid programs: Read the Transcript  Expert payments industry commentary The latest Payments News Subscribe  COVID-19 Payments Industry Impact eBook

In our payments education workshops, we make the point that today’s fintechs rarely do something entirely new. At the macro level, our activities and the transactions they produce haven’t changed. We buy food and clothing. We pay rent. But where and how we do these things has been transformed by technology. A Great Time to Be a Fintech Fintechs are the newer, nimbler businesses that are most often changing how we do things. We buy tickets online, get takeout using our mobile phones, and file insurance claims via an app. Fintech entrepreneurs are busting old processes with much improved user experiences and “value for money” propositions. It’s a great time to be a fintech. The building blocks are in place. Powerful cloud-based capabilities are common. APIs connect these tools. Rich data and machine learning generate specific, actionable insights. iOS and Android give smartphones super powers. Business models like payment facilitation help some fintechs. You can even become a bank. Multiplayer Fintech Builds a Winning Service Individual fintechs are partnering with others to develop and deliver compelling new services. This is multiplayer fintech. Think of it as the fintech supply chain. The direct provider of services to the customer uses the specific payments capabilities of other fintechs to expand and strengthen what it delivers to its customers. This approach lets the provider get to market faster with better capabilities than its competitors. That builds a competitive moat for a period of time. And expands the company’s revenues through a broader range of services. Not Always Easy in B2B The ability of these fintechs to displace incumbent vendors and processes (“How we’ve always done it”) can be hindered by the target company’s size and reliance on legacy systems. Their complexity presents a barrier. Dismantling it can take a lot of time and change management process support. For mid-sized firms, however, the choice to shift to cloud-based service delivery is fast becoming a no-brainer. The work from home imperative has only accelerated the decision. Prospering Despite COVID We all know that the Travel and Hospitality industries have taken a COVID-inflicted beating. But not every company serving those needs has suffered. TripActions, focused on corporate travel, just raised $155M at a $5B valuation to help enterprises analyze travel and expense data. Join TripActions’ Robin Gandhi and George as they talk about how TripActions has prospered in the last year with its travel expense management service that makes both the COF and the employee smile. TripActions has employed those building blocks and partnerships with firms like Visa, Stripe, and Modern Treasury. Using the multiplayer fintech approach, TripActions now has a service that has rewritten how an enterprise manages its travel and expense management processes. For the employee, the hated expense report submission process can be virtually eliminated. TripActions’ services could not have been built even five years ago. Without today’s technical building blocks and those partner-provide capabilities, TripActions could not have built its services and hit the market as it has. It’s a good time to be a fintech. Here’s Robin talking about multiplayer fintech:  Read the Transcript at the Payments on Fire® website Expert payments industry commentary at Payments Views The latest Payments News. Subscribe here Read our COVID-19 Payments Industry eBook  

GPay is Google’s app for payments, financial services, rewards, and, is expanding its capabilities, its partnerships, and its ambitions. Join Glenbrook’s George Peabody and Yvette Bohanan as they talk GPay with Steve Klebe, Google's head of GPay business development and Google's Processor and Partnerships work. Fairly recently, Google’s payments services were a disjointed collection of point solutions. Today’s GPay is far more than a rebranding job. Listen between the lines to what Steve has to say. The implications are many. Way More Than a Wallet A lot has happened since Steve joined us in July 2019. GPay has added incentives and loyalty more deeply as well as added expense management with automatic receipt discovery when sent to your Gmail account or via the camera. The incentives can turn into real money. In the U.S. Google has teed up its Plex bank account offerings in partnership with Citi and Stanford FCU (other FIs to come) for launch in 2021. You can already add bank accounts to GPay through Google’s partnership with Plaid. GPay is becoming a very competent user interface to the banking services offered by the FIs themselves. Google provides the UX and the data that matters. The bank does what it does. Does this disintermediate the banks or give them a new channel through which they can offer their services? We will decide but personal experience suggests the GPay interface has a lot going for it. Google has added these new capability and consolidated others under the single GPay roof. Its ambitions now go beyond simply being a repository for payment credentials and loyalty cards with a sprinkling of P2P payments on top. Exercising Open Banking One of the major payments and fintech trends for 2021 is open banking, the ability of third parties to access accountholder data. PSD2 has driven this in Europe and India’s Unified Payment Interface (UPI), both pushed by mandate, enables a vigorous open banking ecosystem in that country. Google Pay, formerly Tez, has been a huge success in India. Of course, market pressure is the driver in the U.S. Google is now exploring the potential for GPay to assume the role of "super app" along the lines of WeChat Pay or Alipay. Yes, that’s a big leap but there are hints of its ambitions. For example: Google has built over 100 HTML games optimized for low bandwidth networks and low memory smartphones, all targeted toward supporting its NBU (Next Billion Users) effort. GPay will be one of the presentation surfaces for these GameSnack. Fairly recently, Google’s payments services were a disjointed collection of point solutions. Today’s GPay is far more than a rebranding job. Listen between the lines to what Steve has to say. The implications are many.   Read the transcript Find more podcasts at Payments on Fire® Read expert payments industry commentary at Payments Views Read the latest at Payments News. Subscribe here Read our COVID-19 Payments Industry eBook

A Global Phenom Realtime Retail Payments (RTRP) systems are a global phenomenon. These systems exist or will soon in over 50 countries around the world. Some have been in operation for decades. The UK’s Faster Payments system, operated by Mastercard’s Vocalink unit, has been in operation for over ten years. Still others are still in the design stage. These account-to-account systems (A2A) have gained in regulator popularity because: They are fast. The receiver has near instant availability They are push payment systems. Transactions don’t take place unless the sender has enough money to fund the transaction. In other words, authorization takes place before the transaction User authentication is up to the financial institution These systems operate year round, 24x7 They are inexpensive. Transaction pricing is fixed, regardless of the value of the payment itself They have rich data carrying capability Some include a new message type called Request for Payment, essentially a digital invoice message that prompts the payer to send money and smooths account reconciliation. Still New to the US Most Americans still have no idea there’s a new national payment system in operation. Or that a similar one will begin operation in a few years. Wallets like Venmo and the Cash App abound. But an entirely new set of payment rails? That happens once in a generation. Some of those Americans, on the other hand, may have experienced what a system like this can do. Zelle is a fast push payment system that moves money between banks accounts. But Zelle is more of a directory-enabled messaging layer. The money movement between banks relies on older payment rails like ACH and wires. New Age messaging and user experience; old fashioned settlement. Key RTP Characteristics Payments geeks, like Payments on Fire® listeners, know that the Real Time Payments Network takes a different approach. Operated by bank processor, The Clearing House, the RTP Network leaves management of the user experience and the use case up to the bank, the processor, or the provider serving a particular industry. The RTP Network provides: The messaging between the sender and the receiver and each of their banks Nearly instant availability of the funds into the receiver’s account (by network rule) 24/7/365 operation (ACH and wires take a break after working hours) Instant settlement between the sending and receiving financial institutions In short: the RTP Network provides the plumbing and pipes. What it looks like and how it’s used is up to another stakeholder. Members of the network are financial institutions who either expose the RTP rails themselves or sponsor third party access so that those entities can make use of them. Nothing groundbreaking there. An RTRP with RTGS One of the impressive features of the RTP Network is that interbank settlement, the movement of funds between the sender and receiver banks, happens in realtime. The two banks settle their positions instantly. Settlement happens in realtime for every transaction. That’s what a realtime gross settlement (RTGS) does. Contrast that with a system like Zelle that provides instant messaging among the stakeholders but typically leaves the final movement of monies between banks to an overnight batch process via ACH. And this is net, not gross, settlement. The amount includes all of the day’s transactions. The RTP network achieves its RTGS capabilities using the following technique: RTP requires each member financial institution to pre-fund monies sufficient to handle its transactions. The money to operate the system has to be in place ahead of time. This eliminates settlement risk between the banks Each FI’s monies are pooled in a single pooled account, owned in common by the RTP Network’s member financial institutions. This pooled account is held at the the Federal Reserve The Clearing House maintains a ledger that tracks every transaction, that debits and credits FI pairs in realtime for each transaction Each Member FI is responsible for making sure it has enough funds to cover each of the transactions initiated by its accountholders. Each FI uses another open loop payment system, FedWire, to move monies into and out of its share of the pooled account as needed. A Maturing System That’s a lot of background to help US contrast this system against the other four mostly digital systems in the U.S. (If you’re not clear on that, join us for the best in payments education at a Glenbrook Payments Boot Camp®) The RTP Network is in its fifth year of operation. In this Payments on Fire® episode, Steve Ledford updates us on: The growth in member financial institutions The growth in transaction volume The expanding set of use cases Who is using the RTP Network How COVID-19 accelerated usage in new use cases So, take a listen. Here’s Steve talking about those new COVID-driven use cases. For a snapshot of how the faster payments phenomenon is growing in the U.S. here is the 2020 Faster Payments Barometer. Read the episode transcript Find more podcasts, visit Glenbrook's Payments on Fire® site Read expert payments industry commentary at Payments Views. Read the latest at Payments News. Subscribe here. Read our COVID-19 Payments Industry eBook