The debate on instant access to wages
The impending specter of Brexit and the trade war between the United States and China is rippling far beyond the borders of these countries, affecting many other areas of the global economy. As these political developments introduce new uncertainties and frictions in international trade, financial institutions (FIs) and service providers are working to alleviate some challenges in the space by promoting services for rapid cross-border transactions.
Recently, several FIs have been working to link businesses to the Single Euro Payments Area (SEPA) Instant Credit Transfer System (SCT Inst) to speed up international payments in Europe. Meanwhile, the Reserve Bank of Australia and the Australian Payments Council are considering migrating payment services to ISO 20022, which could further align them with payment messaging strategies in other countries.
The May Faster Payments Tracker ™ explores these and other recent efforts to advance fast cross-border payments, as well as to encourage more businesses to move away from legacy payment rails.
Around the world faster payments
According to reports, 80% of business-to-business (B2B) transactions are still done with paper checks. A company offering to tackle this problem recently raised $ 88 million in funding to bring automated payments to small and medium-sized businesses (SMEs). The company, Bill.com, will deliver the offering through its cloud-based platform.
Digital payments provider Checkbook is tackling another legacy payment method: ACH. The company announced a solution to help businesses move away from ACH in favor of using Visa Direct to instantly transfer money to recipients’ bank accounts.
DBS Bank strives to help traders get their income without waiting for payment. The company launched an app that leverages Hong Kong’s faster payment system and scan and checkout capability, allowing consumers to scan a QR code in-store to pay for purchases directly from their bank accounts. The traders receive the funds immediately.
Bellco Credit Union’s approach to instant winnings
Quick access to compensation can prevent employees from taking financial risks, such as going to payday lenders. It was an important cause for Colorado-based Bellco Credit Union, which decided to offer instant access to income to put staff on a more secure financial footing. However, launching such a service was easier said than done.
In this month’s feature article, Theresa Sanders, Human Resources Payroll Administrator at Bellco, explained the complexity of choosing an appropriate instant income solution, including how the FI took decisions on how much compensation to make available and when. For the full story, download the Tracker.
Deep Dive: Impact of real-time payments on liquidity management
The rise of instant payments is creating new complications for corporate treasurers.
Treasurers need to ensure that their businesses have safe levels of working capital at all times, and the predictability of batch payment systems makes this task easier. However, the instantaneous nature of real-time payment systems can transform the way treasurers calculate cash flow.
This month’s Deep Dive examines the impact of real-time payments on cash management and how treasurers can adapt to operate successfully in this new landscape. Learn more in the Tracker.
About the tracker
The PYMNTS Faster Payments Tracker ™, Powered by Fiserv, is the go-to resource for staying up to date on developments and faster payment initiatives on a monthly basis. The Tracker highlights the contributions of different stakeholders, including institutions and technology providers who come together to make it happen.