Breaking Down The Faster Payments Construct

Set aside 13 minutes for the newest installment of the Countdown to Same Day ACH podcast series.

In this episode, Jan Estep, president and CEO of NACHA, talks to Karen Webster about the overlaps, complements, and implications of all the capabilities under the faster payments umbrella.

Ms. Estep says the best way to think about “faster payments” is as an umbrella for payments initiatives designed to speed up the systematic movement of payments.

“That way,” Estep said, “faster payments sits over the top, and Same Day ACH or real-time payments are options underneath that. Both are about moving payments faster than they are today.”

To that end, Estep said, real-time payments and Same Day ACH are distinct, but complementary, in this construct. They also come with real differences, depending on where you are in the world.

For example, Same Day ACH will move money between all bank accounts in the U.S. three times every day, supporting both debits and credits when fully deployed. In other countries, however, real-time payments have traditionally only supported credit or what are sometimes referred to as “push payments.”

Alternatively, Same Day ACH is designed to support all ACH payments, both credit (push transactions) or ACH debit payments (those which pull money from an account after authorization.)

The adoption of these new platforms is going to be very interesting both on a personal and business level. Businesses are going to be the most fascinating to watch. Will this spur additional businesses to move from check-oriented processes?

If you attended the RDC Summit two weeks ago, the feeling was that improvements in check risk mitigation and clearing enhancements might just offset the adoption rates more than the experts think.