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INNOVATION CONFERENCE 2017
FASTER PAYMENTS – AN INSIDERS VIEWSteve NogaloGM Payments, NCR Financial Services, NCR
Javier Guerrero
Faster Payments Lead, Americas, Edgar, Dunn & Company
Please use theInnovation ConferenceEvent App to check-in to this session S688NCR Innovation Conference 2017: Confidential
2
Agenda
NCR Innovation Conference 2017: Confidential
What exactly are “Faster Payments”
Global Experience & Driving Forces
The US Approach – Federal Reserve
State of US Market
The Journey Ahead
How do you define “Faster Payments”
NCR Innovation Conference 2017: Confidential 3
1. What is the most important feature? 0%
2. Available 7x24x365 0%
3. Immediate funds availability 0%
4. Immediate clearing/settlement 0%
5. Irrevocable 0%
6. Immediate Confirmation 0%
POLL OPEN
4NCR Innovation Conference 2017: Confidential
Depending on your needs, there can be
many definitions of Faster Payments
Immediate credit: The funds become available in the
payee’s account immediately (within a few seconds) of
the payment being initiated by the payer.
Irrevocability: Once the payer has initiated the
payment, they cannot cancel it.
Certainty of fate: When the payer initiates the
payment, they are informed immediately (within a few
seconds) whether the payment has successfully
reached the payee’s account or not.
Faster Payments Defined
Faster Payments: Pieces to the Puzzle
5NCR Innovation Conference 2017: Confidential
Infrastructure Layer (Rails)
Accounts
API Layer
Application & Services Layer
6NCR Innovation Conference 2017: Confidential
Global Experience
Regulators
Improve market
efficiency and
competitiveness
Lower settlement risk
in banking system
Expand participation
in formal economy
Technology
Mobile first
Drive toward global
standardization
Low cost compute –
less need for batch
Internet of Things
Customer Demands
Convenience
Access to funds
Low cost
New Market Entrants
Alternative payments
Non FI participants
FI imperative to
protect role in
payments and
position of bank
account as central
Driving Forces Behind Faster Payments
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NCR Innovation Conference 2017: Confidential
Mission: “identify and evaluate alternative approaches for
implementing safe, ubiquitous, faster payments capabilities in the
United States.”
Effectiveness Criteria
Goals & Recommendations
Challenges & Opportunities
Call to Action/Next Steps
https://fasterpaymentstaskforce.org/wp-content/uploads/faster-payments-task-force-final-report-part-two.pdf
The Federal Reserve Faster Payments Task Force
The US Approach
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NCR Innovation Conference 2017: Confidential
Support continued collaboration
Pursue Federal Reserve Settlement Service
Explore need for Federal Reserve as a service provider
Promote adoption of standards including invoicing and remittance
Work to reduce fraud risk and advance the safety, security and
resiliency
https://fedpaymentsimprovement.org/wp-content/uploads/next-step-payments-journey.pdf
Next Steps in The Payments Improvement Journey
The Federal Reserve
9
What role should the Federal Reserve play?
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POLL OPEN
1 Coordination, collaboration & governance 0%
2 Service provider & operator 0%
3 Both 0%
Make Faster
Improve speed of existing payment systems
Same Day ACH
Check 21
Dwolla
Good Funds
Existing Payments, Immediate funds availability
Zelle
DCD
New Payment Rails
Build new payment rails, networks and/or payment types
The Clearing House
Ripple
Alternative Accounts
Virtual accounts that enable payments
Venmo/ PayPal
Alipay
State of US Market
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Expand Existing Networks
New types of payments on existing network
Visa Direct
MasterCard Send
Different Solutions to The Challenge
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The Clearing House: Real Time
Payments
Developing a brand new “rail” for US for
clearing and settling between accounts
at financial institutions
First new US rails in 40+ years
Greater impact on systems and rules,
so expected to take longer achieve
ubiquity
TCH and Zelle
Zelle (Early Warning): Promise to
Pay
Clears through existing ACH network
and debit network
Easy to deploy and driving for rapid
ubiquity
Push payment, real time notification,
funds available in minutes
At What Stage is Your Faster Payments Journey?
NCR Innovation Conference 2017: Confidential 13
POLL OPEN
1 We have a clear strategy in place 0%
2 We are in the process of implementing 0%
3 We have a good offer in market 0%
4 We haven’t really started yet (be honest) 0%
Most have Faster Payments strategy in place
Most in process of implementing both RTP by TCH and Zelle
by EWS
Most are integrating as direct participants into RTP / Zelle
Relying on commercial side for monetization
Adoption of Faster Payments by US Financial Institutions
14NCR Innovation Conference 2017: Confidential
Top 25Financial
Institutions
Medium and Small FIs
~ 50 -55% of DDAs
Wide range of progress regarding Faster Payments
Long tail of FIs (10,000+) do not yet have a Faster Payments
strategy
Business plan / ROI is neutral at best (if consumer focused)
Feeling forced to adopt FP to compete with large FIs and
FinTechs
~ 45 -50% of DDAs
15NCR Innovation Conference 2017: Confidential
Banks and
non-banks
Faster Payments Will Have a Fundamental Impact
Options
Client Expectations
Return on
Investment
Key Decision Criteria:
Features: speed, security, messaging standards, etc.
Technology robustness/maturity
Likelihood of becoming ubiquitous
Use cases supported
Expected client satisfaction
Financial viability/business case
Roadmap for future
Which Faster Payments Initiative to Support?
16NCR Innovation Conference 2017: Confidential
Start with the Customer Value Proposition
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Typical Use Cases of Faster Payments
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Getting Ready For Faster Payments
19NCR Innovation Conference 2017: Confidential
Getting Ready For Faster Payments
20NCR Innovation Conference 2017: Confidential
Getting Ready For Faster Payments
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Getting Ready For Faster Payments
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Getting Ready For Faster Payments
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How NCR Can Help
NCR Digital Banking Customers
Large and Medium FIs
NCR is focused first on solutions that we believe will gain
market adoptions fastest – Zelle
P2P service initial use case
Roadmap session will provide details on timing
NCR Authentic for Faster Payments
Integration of existing channel applications
Orchestration, transformation and routing to internal systems
Faster Payments gateways
Creation of customer experiences – use cases
Digital Design Services
You can earn 10 points toward the
Innovation Game right now!
Please go to “Schedule” in the
mobile app, find this session, and
take a short survey to provide
feedback.
Surveys will remain open for 2
hours.
Check in code is S688
24NCR Innovation Conference 2017: Confidential
Please give us your feedback!
INNOVATION CONFERENCE 2017
THANK YOUSteve NogaloGM Payments, NCR Financial Services
Javier Guerrero
Faster Payments Lead, Americas, Edgar, Dunn & Company
NCR Innovation Conference 2017: Confidential