Pub. 17 2020 Issue 3

Issue 3 • 2020 19 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S lobbied the Federal Reserve to develop a competitive solution, which leads to the announcement of FedNow by the Feder- al Reserve Board in 2019. An industry update by Governor Lael Brainard in August 2020 confirmed that the Fed is on track to implement their instant payments systems in 2023/2024. The functionality of RTP and Fed- Now is expected to be similar in several core ways: • As the category implies, instant payments are measured in seconds from submitting a payment instruc- tion until good funds are received by the payee/recipient. • Because settlement is immediate, adequate funds held by the business in a bank account are necessary to initiate the payment. • Both payments networks allow a “request for payment” capa- bility that is expected to be a game-changer for bill payments by enabling a service provider to notify their client that a payment is due and a simplified response — with the requisite security — to complete the payment. The challenge with all new payment solutions depends on the basics William Schoch is Pres- ident and CEO of WesPay, the nation’s oldest and one of the largest associations dedicated to helping mem - bers grow and improve their use of electronic payments. He is respon - sible for developing and implementing strategic initiatives to grow the association and provide maximum value to its 1000 members through in - formation, education, and advisory services. He was appointed to his position at WesPay in 2008. In 2016, Bill was the incorporator of WesPay Advisors, a wholly owned subsidiary of WesPay, which provides payments consulting in the areas of payments strategy, process improvement and payments regulation. He serves as a director and the secretary of the WesPay Advisors Board. Bill currently serves on the boards of WesPay, WesPay Advisors as board Secretary, and Na- cha. He also serves on the operations committee of the U.S. Faster Payments Council. He recent - ly served on the board of USA Technologies, the Federal Reserve’s Faster Payments Task Force and the steering committee for Nacha’s Pay- ments Innovation Alliance. Bill is a member of the American Society of Association Executives (ASAE) and the California Society of Associ- ation Executives (CalSAE). He is a frequent speaker on payments-related topics. of supply and demand. We expect both the RTP and FedNow instant payment solutions to be successful in the long-term because of the early implementation of the large banks, which account for a majority of U.S. deposits (supply side). However, we are learning that these solutions’ business adoption is taking time and may require changes in the payables processing stream for established corporations (demand side). We expect business innovation to result in eventual demand and to follow the broad adoption curves realized in other industrial countries globally. There is no lack of opportunity for banks to expand their suite of pay- ment services to consumers and busi- nesses. The faster payment solutions I outline in this article overlap in many regards. Understanding each of the payments networks’ core capabilities and overlaying those with your clients’ needs and the bank’s goals will result in the most successful implementa- tion. Digital services will only contin- ue to raise the bar for service expecta- tions, and payment delivery speed is no exception. n