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Education

port real-time payments. Many of these systems cannot
keep pace with real-time payments because they were
designed to handle card-based transactions. While pro-
cessing card-based payments can typically take hours
or even days, real-time payments must be processed
within seconds and with 24/7 demands.

Some financial institutions and payment processors
have tried to keep pace by continually upgrading their
legacy systems with patches and updates. Yet this has
left them with siloed infrastructures that can't be inte-
grated, lack visibility and leave gaps in the settlement
process. Users complete payments on front-end sys-
tems, but they are not settled on the back end, opening
the door to fraud and risk.

Banks and payment processors will also need processes
and protocols to accommodate real-time payment dis-
putes. As everything happens instantly, processors need
faster ways to research transactions to handle charge-
backs, returns and fraud. When Australia launched its
New Payments Platform in 2018, payment service pro-
vider Cuscal faced several challenges in transforming
its back office to handle real-time payment disputes.
It eventually implemented a modern back-office sys-
tem that accepts real-time investigation requests and
enables clients to meet obligations and respond in real
time.
Banks will also need new methods for consumer pro-
tection and fraud management. Currently, the RTP sys-
tem by The Clearing House and the FedNow service
by the Federal Reserve enable push payments. When
the U.K. launched Faster Payments in 2008, Authorized
Push Payments became a fraud vector, leading regula-
tors to start scam reimbursement.
Additionally, U.S. institutions will have to work on pro-
ductization and third-party integration. In Australia,
Zepto helps merchants resolve disputes in real time,
while Pix in Brazil offers a standard user experience
across all apps.

The coming years will usher in a wave of real-time pay-
ment adoption in the United States, offering benefits for
both consumers and the financial services industry. A
modern software suite not only helps payment proces-
sors and banks handle today's disputes but also helps
them prepare for future payment methods.

Cheryl Fitzgarrald is a senior program director at BHMI, a leading
provider of software solutions focused on the back-office processing
of electronic payments. The company is best known as the creator
of the Concourse Financial Software Suite, a unique integrated col-
lection of back-office products that allow companies to adapt to the
rapidly changing world of payments. For more information, please
visit www.bhmi.com/concourse_financial_software_suite/.

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