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Insights and Expertise
ChapterTitle

The shift toward To meet this demand, banks, retailers, and payment
processors are investing in technologies that support real-
unified payment time payment processing.
However, despite the growth of instant payments, legacy
processing transaction services must still be supported. According
to Statista (see https://bit.ly/4cePPBe), real-time payments
accounted for approximately 1 percent of overall payment
transactions in the United States in 2024, and is predicted
to grow to 5 percent by 2028.
This underscores the continued importance of supporting
legacy payment methods even as real-time payments gain
traction.

Front-end authorization systems have largely evolved to
accommodate both card-based and account-to-account
real-time payments.

However, legacy payment back-office systems—
responsible for functions such as reconciliation, fees
assessment, settlement and dispute management—remain
largely batch-oriented and are not designed to support the
rapidly evolving payments ecosystem.
Moving toward unified payment processing
By Cheryl Fitzgarrald
BHMI Many payment processors face challenges due to legacy
back-office systems that cannot support real-time
merging payment methods are rapidly pro- payments. Managing multiple systems for legacy and real-
pelling payment processors into the era of time transactions leads to inefficiencies, higher costs and
real-time payments. Unlike traditional systems operational complexity.
E where processing took days, today’s payment
authorizations, fund transfers and settlements are often The solution lies in adopting a unified payment processing
happening instantly. platform that seamlessly supports both legacy and real-
time transactions.
However, batch processing remains a critical part of
the payments landscape, requiring payment services Below are three key components to consider for a unified
companies to manage both real-time and batch transaction payment processing environment:
data sources simultaneously. As a result, they must
adopt payment back-office systems capable of efficiently 1. Continuous loading and processing of data: A
handling both traditional card-based transactions and unified processing environment should automatically
emerging real-time account-to-account payment methods. ingest and continuously process both legacy and real-
time payments data. This enables immediate process-
Importance of supporting legacy ing upon data arrival, ensuring efficient back-office
and instant payments operations while providing a comprehensive enter-
prise-wide view of all payment activities.
Legacy or batch payment processing has long been
the standard for card-based transactions, aggregating Companies that adopt continuous processing systems
authorized transactions over a set period—typically will also benefit from 24/7 availability and a scalable
a few hours or at the end of the business day—before infrastructure.
consolidating and processing them in bulk.
2. Support for ISO 8583 and ISO 20022: A unified
But the adoption of instant payments is growing at a rapid system should support both ISO 8583 and ISO 20022
pace. According to the Global Instant Payments Market message formats. ISO 8583 has long been the founda-
Report 2024 (see https://bit.ly/41W4uOv), the total value of tion for card-based payments, offering speed and re-
instant payments is projected to increase from $22 trillion liability. Meanwhile, real-time and cross-border pay-
in 2024 to $58 trillion by 2028, representing a growth of ments increasingly rely on ISO 20022, which provides
approximately 161 percent over the four-year period. enhanced data capabilities.

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