Payments initiatives reflect growing need for speed

Strategic initiatives aimed at lowering electronic transaction times reflect a growing interest in faster electronic payment transactions in public and private sectors, payments analysts have noted. Some attribute heightened awareness of transaction times to efforts at implementing EMV (Europay, Mastercard and Visa) technologies following the Oct. 1, 2015, liability shift. Others credit an ongoing scourge of high-profile data security breaches for the retail industry’s interest in real-time payments as a deterrent against fraud.

The Clearing House President and Chief Executive Officer James Aramanda said his company has focused on payment safety and security for 160 years, first with the development of “a central clearing house, then the paper check, followed by electronic payments, and now it is working to ensure digital payments safety and security for future generations.”

Aramanda further noted TCH’s Real-time Payments for the U.S., an initiative designed to enable consumers and businesses to transmit instantaneous payments and messages from their accounts at participating financial institutions.

Faster switches

Paul Stoddart is Managing Director of Strategy, Products, Marketing and Business Development at VocaLink, a global payroll, bill payment and ATM service provider to banks, governments and corporations. The company facilitates real-time payments in numerous regions, according to local regulations, including the United Kingdom, Sweden, Singapore and U.S.-based TCH. Last year VocaLink processed more than 11 billion transactions. Stoddart has observed a growing number of national and regional efforts to implement real-time payments online and in brick-and-mortar stores.

VocaLink disclosed Sept. 27, 2016, that it has partnered with ACI Worldwide, which the companies reported processes payments for more than 51,000 companies worldwide. The solution will combine VocaLink’s Immediate Payments System with ACI’s UP Immediate Payments solution to create an end-to-end, pre-integrated payment solution designed to accelerate transaction times and merchant boarding.

“Together, we will be able to offer the market-leading, real-time payments system to a far greater number of banking customers, and allow millions of people use of the most efficient payments system,” Stoddard said.

Craig Saks, Group President, Strategic Products at ACI, added, “By providing our customers with a pre-certified solution that is already tightly integrated with the VocaLink IPS real-time payment system, we can simplify the challenge of real-time enablement that customers face and significantly reduce the integration required; this ensures that they are able to offer real-time payments to their customers as quickly as possible.”

Faster chips

Faster payments have also been a priority for smart-card chip and device manufacturers. San Francisco-based Square Inc., which processes payments on its own hardware platform, reported Sept. 26 that it has reduced the speed of its chip-card readers, reducing average transaction times from 5.7 to 4.2 seconds. Its closed-loop system of software and hardware enables Square engineers to optimize the entire system, the company stated.

“We’re committed to saving time for our sellers and the customers they serve,” said Square’s Hardware Lead Jesse Dorogusker. “Conversations with business owners should be about the delicious cheeseburger you ate or the new haircut you just stopped in for, not the amount of time it takes to pay for them.”

Dorogusker noted more than 75 percent of cards processed on Square are chip-enabled, compared with 40 percent during the same period in 2015. A new reader, designed to process contact and contactless EMV cards, is in high demand due to growing use of mobile wallets that rely on near field communication schemes. Mobile wallet usage has spiked during festivals and event venues, he added.

The Federal Reserve published a white paper in January 2015, titled Strategies for Improving the U.S. Payments System, to explore various approaches to upgrading traditional payments infrastructures in response to improvements in high-speed communications technologies. The authors stressed the need to balance speed with security and oversight.

“High-speed data networks are becoming ubiquitous, computing devices are becoming more sophisticated and mobile, and information is increasingly processed in real time,” the authors wrote. “These capabilities are changing the nature of commerce and end-user expectations for payment services. Meanwhile, payment security and the protection of sensitive data, which are foundational to public confidence in any payment system, are challenged by dynamic, persistent and rapidly escalating threats.”

Editorial Note:

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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