The PaymentsJournal podcast

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51:54

"ChatGPT is not that sophisticated yet. So for marketers, what that means is there are real ways right now for arbitrage in this short period of time before ChatGPT gets good enough to say, no, we're only showing the proper result." Mac King from Domaine breaks down why merchants are seeing ChatGPT and Perplexity show up as referral sources in their analytics—and what to do about it. We talked about the terminology wars (GEO vs AEO vs AI search optimization), why AI engines favor content from Google's 10th page, and the Reddit strategies that actually work without getting banned. SPONSORS Swym - Wishlists, Back in Stock alerts, & more getswym.com/kurt Cleverific - Smart order editing for Shopify cleverific.com Zipify - Build high-converting sales funnels zipify.com/KURT LINKS Domaine AI Commerce Suite: https://www.meetdomaine.com/insights/domaine-news/domaine-launches-ai-commerce-suite Mac King on LinkedIn: https://www.linkedin.com/in/mackenziepking/ Mac King on Twitter: https://x.com/MacKing/ Profound (tracking tool): https://www.tryprofound.com/ Shopify Knowledge Base app: https://apps.shopify.com/shopify-knowledge-base SEOFOMO newsletter: https://seofomo.co/ Commerce GPT newsletter: https://www.yotpo.com/commerce-gpt/ WORK WITH KURT Apply for Shopify Help ethercycle.com/apply See Our Results ethercycle.com/work Free Newsletter kurtelster.com The Unofficial Shopify Podcast is hosted by Kurt Elster and explores the stories behind successful Shopify stores. Get actionable insights, practical strategies, and proven tactics from entrepreneurs who've built thriving ecommerce businesses.…

The PaymentsJournal Podcast

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Focused Content, Expert Insights and Timely News

30 episodes

The PaymentsJournal Podcast

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updated a day ago

Series home•Feed

Focused Content, Expert Insights and Timely News

30 episodes

#Business News #News #PaymentsJournal

All episodes

The PaymentsJournal Podcast

1
What’s New at Nacha’s Smarter Faster Payments Conference 8:43

1 day ago8:43

8:43

As dynamic technologies continue to revolutionize the payments space, conferences have become a critical way for payments professionals to stay informed and share their expertise. One of the signature events of the payments space is Nacha’s Smarter Faster Payments 2026 , which will take place in San Diego from April 26-29, 2026. In a recent PaymentsJournal podcast, Stephanie Prebish , AAP, AFPP, APRP, CTP, Senior Managing Director of Association Services at Nacha, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, discussed the wide range of educational tracks and networking opportunities available at the conference—and how attendees can accomplish months’ worth of business in just a few days at Smarter Faster Payments 2026. The Four Pillars Nacha’s conference has become one of the most recognized events in the industry, thanks in part to its educational offerings, which provide an in-depth look at the timeliest topics in financial services. “Our Payments conference is known in the industry as one of the best conferences out there and we’re planning another excellent year of education and networking and fun,” Prebish said. “We’re really just looking forward to it.” With such a full event calendar, it is essential for attendees to come prepared with a plan. That plan should make room not only for networking opportunities and keynote speakers, but also for conversations with vendors on the exhibitor floor. Amid all the activity—and the splendors of San Diego—there is more than enough to keep payments professionals engaged. Still, it is critical for attendees to review the agenda in advance and prioritize the educational sessions that matter most to them. “We just finished up our first-round selections, and the sessions next year are going to be fantastic,” Prebish said. “We are on top of all the big, new, exciting changes that are coming to payments. We’re going to be talking about stablecoins; we’re going to be talking about fraud monitoring; we’re going to be talking about everything that’s happening with ISO 20022. It’s going to be an amazing conference.” Defining the Audience The tracks were carefully curated to span the full spectrum of the payments industry, highlight emerging innovations, shifting regulations, and strategies for mitigating fraud and risk. New next year is a track dedicated to one of the industry’s most talked-about technologies: stablecoins. This track provides a detailed exploration of the opportunities stablecoins present for financial institutions, along with strategies organizations can adopt to harness their potential. There is also a dedicated legal track designed specifically for attorneys working in the payments space. Additional tracks focus on artificial intelligence, compliance and regulations, cybersecurity, and ACH. With such a comprehensive agenda, it can be challenging for attendees to identify the sessions most relevant to their role. To help, Nacha has developed a system designed to guide participants in mapping out the sessions that will deliver the greatest impact. “We’re going to have personas dedicated to who you are in the payments industry, and with every session it will be indicated which persona will be the best choice for you,” Prebish said. “This is going to be really exciting for us because it’s not something we’ve done before, where we’ve defined audiences by session. In addition to the tracks, you can also look at these persona maps and decide where you’re going to be best spending your time.” “Everyone goes to the Payments conference and affectionately calls themselves the rules geek, but that is actually going to be one of our personas—and also payments innovators, payment strategists, and FI leaders,” she said. “We’re really excited about the opportunities that the persona development has given us.” Finding Like-minded Audiences Along with innovations in its educational offerings, Nacha has also enhanced the networking opportunities at Smarter Faster Payments, while keeping long-standing traditions such as the Sunday Social. “We’re still going to have our tried-and-true events like our Tuesday Night Out, which is going to be held on the USS Midway,” Prebish said. “We’ll have our accreditation reception, which next year is going to be super exciting because we’re adding the celebration of our AFPPs (Accredited Faster Payments Professionals).” One of the best ways to maximize these networking opportunities is through the event’s mobile app. Attendees can use the app to locate and join meeting pods on the exhibit floor, see who else will be attending, and connect with colleagues to schedule time for conversations. Another major initiative at Smarter Faster Payments is the development of the next generation of payments professionals. Two years ago, the organizers introduced their next-gen initiative, a “15 Under 40” program designed both to highlight emerging leaders in the payments industry and to foster their continued growth. Across all these events and initiatives, Smarter Faster Payments provides opportunities for payments professionals from every background to connect, collaborate, and build lasting relationships. “We’re doing a lot more in the hall, so we’re going to be working with our Payments Associations and offering what we’re calling a community corner, which is going to be a place for industry groups of like-minded audiences to meet up,” Prebish said. “We’re also going to have Coastal Coffee service in the morning and then we’ll have Pacific Pints beer in our beer garden in the afternoon. There is lots of fun stuff going on in the hall as well as our evening activities.” Hitting the Three Criteria Although the event doesn’t take place until next spring, early registration is now open for exhibitors, and attendees can take advantage of early-bird rates—including discounts for first-time participants and those under 40. As this event has become the industry “who’s who,” Smarter Faster Payments 2026 is now a must-attend for financial services professionals. “When I’m selecting conferences, one of the first things I look at is the sponsor, and Nacha stands out at the top of many of the things offered for the payments community today,” Riley said. “Also, the tracks are important and those are really well applied, and then the networking opportunities. From what I’ve seen at Nacha, this hits all those three criteria for me.” The post What’s New at Nacha’s Smarter Faster Payments Conference appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

1
From Gift to Growth Engine: Exploring the Gift Card Evolution 17:20

2 days ago17:20

17:20

Gift cards have evolved from being a thoughtful, last-minute birthday gift into a mature industry that’s helping companies build loyalty both inside and outside their organizations. Their use cases are expanding rapidly, offering innovative ways for business to not only reward employees but also strengthen their bottom line. In a PaymentsJournal Podcast, Samara Swenson , U.S. Senior Marketing Manager at Prezzee, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed how businesses can tap into this dynamic new landscape for prepaid cards. A Strong and Growing Market According to Javelin, the prepaid market was worth more than $300 billion in 2024 and is expected to grow over 8% annually over the next five years. That figure reflects just the closed loop segment; the open loop side adds an additional $40 to $50 billion, with a similar expected growth rate. Altogether, the industry is projected to reach at least $500 billion by the end of the decade. The B2B segments that Prezzee specializes in are also gaining strength. They account for roughly 15% of the total market, with a comparable 7% to 8% compounded growth rate. Crucially, the B2B segment could expand beyond the current projections as more companies adopt the emerging use cases that are taking shape. Aligning Objectives A full-service gift card program can help organizations align their gifting strategies with specific business objectives, whether that’s employee recognition, customer acquisition, loyalty programs, or incentivizing sales teams. Each objective requires a slightly different approach. For example, for employee engagement, HR leaders can offer highly personalized and meaningful rewards that recognize key milestones, accomplishments, and contributions. For customer acquisition, a prepaid program enables marketing leaders to execute impactful promotions, referral programs, and loyalty initiatives. Sales leaders can use gift cards to motivate teams and reward performance, ultimately driving higher productivity and sales outcomes. New Frontiers in Employee Incentives One of the key areas where gift cards are already very popular is employee incentives. Gifting employees helps them feel recognized and appreciated, and companies that do this often see increased motivation, loyalty, and overall productivity. “What many organizations might not realize is that this positive internal atmosphere naturally extends outward,” said Swenson. “Engaged employees are often a company’s best advocate, allowing companies to channel this energy into external marketing campaigns, customer facing initiatives and sales programs.” Javelin is also beginning to track how many people receive sales incentive through a prepaid program, and early data is showing strong signs of growth. “That’s been a bit untouched in employee incentives, but there are so many great opportunities to go multimodal—maybe have some that is cash, some that might be stock, but also an immediate reward. ‘Hey, you can go out and treat yourself to something because you hit a goal,’” Hirschfield said. “It’s not like you’re sitting and waiting,” he said. “You don’t have to do anything except load it in your wallet or go to a store and say, ‘I’m going to use that.’” Employees who receive incentives are generally happier with their employer. But beyond supporting loyalty at work, card issuers have found that gift cards also foster loyalty among recipients. Javelin data shows that consumers who receive a gift card are more likely to join loyalty programs, become repeat visitors, and even advocate for the brand to friends and family. As a result, these incentives go beyond providing an immediate reward—they can spark long-term relationships. Digital vs. Physical Cards As an electronic gift card platform, Prezzee offers plastic-free gift cards that help companies reduce their environmental footprint, supporting broader corporate ESG commitments. By replacing traditional plastic cards with digital alternatives, businesses can cut plastic waste while signaling their dedication to sustainability. Hirschfield anticipates that digital and physical gift cards will reach an equilibrium by the end of the decade, with a roughly 50/50 split in volume. Gifting is likely to remain popular in physical form, as people often value the tangible experience and gratification of opening a present. “When you have that ability to provide immediate access, you look at employers and employees, especially when they are remote,” said Hirschfield. “A lot of times, the person giving that reward is not sitting with them. That’s where digital factors thrive.” Solving for Unused Balances One emerging and valuable benefit thatPrezzee offers is the ability for businesses to reclaim any unused or unactivated gift card balances, ensuring that no budget goes to waste. Unlike traditional providers, companies only pay for activated gift cards and can also set expiration dates to encourage timely redemption. “From a broad perspective, unused funds (tend to accumulate) at what I call the edges of the value: either at full value or down to the last pennies on the card,” said Hirschfield. “These are mostly the scenarios where someone just forgets to use their card. When you eliminate that fully unused portion, you can provide better bang for the buck for that incentive provider and reduce those pressures on the brand. You don’t have that excess liability on the back end.” Prezzee also provides reporting and analysis tools, enabling businesses to track gift card usage and redemption rates. This data allows companies to continuously refine their strategies, reallocating funds to maximize impact. The combination of transparency and flexibility ensures that every dollar invested in gifting delivers tangible results and measurable returns. “We’ve seen some truly innovative and impactful applications,” said Swenson. “In emergency response situations, Prezzee has enabled organizations to rapidly distribute funds directly to those affected by crisis. Following natural disasters, our partners have provided essential resources to communities within 24 hours. The post From Gift to Growth Engine: Exploring the Gift Card Evolution appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Making Cross-Border Payments Work at Smaller FIs—as Originating Institutions or Correspondent Banks 30:15

9 days ago30:15

30:15

For decades, typically large regional or money center banks served as correspondent banks that enabled smaller banks to offer cross-border payments. It was rare for credit unions, community banks, and other smaller financial institutions to offer cross-border payments. And if they did, it was a money-losing proposition, offered out of necessity to prevent their customers from leaving for larger banks. It’s notable that the problem for originating institutions has become much worse. Over the past decade, the number of correspondent banks supporting originating institutions for cross-border payments has fallen by more than 25%, even as international bank transfer volumes have surged. Small or even medium-sized financial institutions struggle to find a correspondent bank. And even if one is found—the commercial terms, product issues from the opaqueness of these payments, customer complaints about slow delivery of funds and high fees, as well as service from correspondent banks—make the experience painful for everyone involved. But things have changed. New software and new paradigms address “legacy bank systems”, “legacy product thinking”, and “legacy risk” in terms of cross-border payments. And for the first time, smaller financial institutions, credit unions, and community banks can offer their retail customers, SMEs, fintechs, and others cross-border payments that are faster, transparent, and less costly than the “big banks”. Moreover, they’re very profitable as well as easy to implement and support with new paradigms and new tech—and no correspondent bank required. In a PaymentsJournal podcast, Gary Palmer , President, CEO, and Chairman of Payall, and Hugh Thomas , Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed how smaller banks can compete and win in the cross-border space. Fixing the Root Cause Issues at Correspondent Banks What could reduce both the risk and the cost of cross-border payments? Fixing manual workflows is the first step. Digitizing and enhancing a correspondent bank’s ability to manage counterparty risk, transaction risk, and multi-jurisdictional compliance lowers the cost of processing each transaction and improves outcomes. Alternatively, some have introduced stablecoins in an attempt to fill the gap of fewer correspondent banks. But without fixing the underlying risk and compliance issues—they’ve added new risks. “A professor from a renowned European institution tracking various violations or issues with crypto operators in the areas of sanctions and money laundering has noted a marked increase in violations,” said Palmer. “And even though financial institutions may feel somewhat insulated from risk, this hasn’t been fully tested, and the payment system is exposed to manipulation.” Payall has developed end-to-end infrastructure and enterprise software for banks of all sizes and all roles, which removes what Gary calls “ the fear and friction ” from cross-border payments—whether these payments are processed through correspondent banks, new alternatives such as Mastercard Move, or stablecoins. Hugh Thomas observed: “Smaller banks often lack the technical resources to handle the complex demands of cross-border. What’s notable is how purpose-built solutions digitize these processes, lowering costs and opening participation in ways that weren’t possible before.” This means that smaller and medium-sized banks can now safely, efficiently, and profitably become correspondent banks or originating institutions. Banks Are Asking Too Much from Their Employees Millions of times each day around the world, an originating bank employee receives a payment instruction from their core system indicating that a customer wants to transfer funds to the U.S. to make a payment for goods and services. From here, this transaction is manhandled through an overgrown jungle of paper processes across multiple departments at the originating bank and its correspondent bank. It’s each bank’s responsibility to establish reasonable risk controls to mitigate money laundering, terrorist financing, and sanctions violations. Based on the size of the payment and other attributes, employees must decide what data to collect—contracts, invoices, bills of lading, customs declarations, tax receipts, or something else. They must then determine whether the documents are authentic or have been altered or forged. And apply judgment to decide if what’s been provided reflects an economically legitimate transaction. The bank employee also looks for sanctioned people, companies, ports, vessels, and products in this pile of documents, from an ever-changing list of sanctions. Now consider the time, cost, and risk of error involved—even for a few documents/pages. Multiply that by 5, 10, or 50 pages, and the problem becomes overwhelming. And where do they record, share, and store the results—along with all the related data, documents, photos, and more? Not in core systems or digital bank platforms—because it’s impossible—but instead, in paper files, shared folders, and emails. What a mess. It’s a slow, costly, opaque, cumbersome, and risky process. The solution? Digitizing counterparty risk, transaction risk, compliance, and a long list of other previously manual processes eliminates the slow, costly, and error-prone reliance on humans to protect each bank and the payment system. New, Purpose-Built Software is a Game Changer “It’s easy to understand how AI and digitization could transform cross-border compliance,” said Thomas. “Software that automates data collection, verification, and document analysis has the unique potential to reduce risk and change the economics of participation for smaller banks.” Payall’s software digitizes all the originating institution’s rules, data collection, verification, and internal, as well as external, sharing needs. Soon, advanced AI will examine PDFs, audio files, videos, and photos, extract unstructured data—such as names of companies, ports, vessels, people, and currencies—and compare them against sanctions lists. For the first time, an originating institution, even a small bank, can fully digitize its Know Your Transaction (KYT) process for 100% of transactions in real time. Until Payall, these processes could only be executed by a bank’s employees. It’s too much. Also, from the perspective of a correspondent bank working with originating institutions, nothing is more powerful than “see-through”—or 100% visibility into each rule at the originating institution, how it was executed, the supporting data and artifacts, including the results of 3 rd party verification services—orchestrated by Payall. Additionally, correspondent banks configure their individual risk, compliance, or other rules to this incredibly data-rich payment set and take action. Instead of operating on “trust”—validated by occasional audits on as few as 0.0001% of all transactions, months after a payment—imagine the power of complete visibility into the originating institution’s application of their rules, processes, and supporting documentation on 100% of all transactions in real time. And based on this, the correspondent bank can choose to either accept the payment or independently execute additional transaction due diligence, including a new form of Know Your Customer’s Customer (KYCC). This is only possible with new software that enables instant, on-demand multi-country KYC, KYB, as well as specialty KYT. What was previously impossible to see is now not only transparent but can be directly and independently interrogated and decisioned by the correspondent bank—this is Know Your Customer’s Customer reimagined. This is particularly powerful for correspondent banks that support originating institutions from regions flagged by FATF as having material weaknesses in preventing money laundering, executing KYC, or sanctions screening. Also, during periods of geopolitical events, bad actors can infiltrate banks. What’s the outcome? In the absence of comprehensive payment data and knowledge, U.S. correspondent banks are compelled to exit from the region or stop just about all payments. But in doing so, legitimate businesses can’t make payments or get paid, and life-saving remittances are stopped. The result? Chaos as commerce is crippled, and everyday citizens struggle to survive. While the bad actors are stopped, a country can be decimated. “For correspondent banks, Payall enables proactive, data-driven oversight of every transaction, not just retrospective audits or occasional spot-checks. For the first time, correspondent banks can go beyond trust,” said Palmer. “We’ve completely reimagined and redefined Know Your Customer’s Customer so that correspondent banks have 100% see-through into the rules and outcomes of an originating bank partner, and they can directly engage and decision data. This changes everything: it eliminates reliance on inefficient back-office workflows, subjective trust, and guesswork. It creates confidence in the safety of cross-border payments, and gives correspondent banks the control they’ve always needed, but never had.” Payall’s breakthrough software reduces risk to correspondent banks while ensuring legitimate trade is flowing and the most at-risk can still receive life-saving remittances. “This level of transparency and access fundamentally changes correspondent banking,” noted Thomas. “It’s no longer about faith that a partner executed its controls—it’s about verified execution, visible in real time.” Correspondent Banks Have New Competition While new software helps banks overcome legacy systems and legacy risk, Mastercard Move and Visa Direct are new paradigms that address legacy bank product thinking regarding international transfers. Banks and financial institutions of any size can offer cross-border capabilities that no bank has ever offered — such as transfers to mobile money, digital wallets, cash pick-up, and pay to card with Visa Direct and Mastercard Move. In addition to providing novel software for originating institutions and correspondent banks, having pioneered specialty risk and compliance capabilities as well as end-to-end workflow digitization, Payall is certified by Mastercard Move as a technical integrator and processor. The company also supports Monex and recently announced its FedNow Service certification. Gary emphasized, “We’ll never compete with banks, whether they’re originating institutions or correspondent banks; instead, our software and global payments gateway and orchestration capabilities open more possibilities for all.” Mastercard Move and Visa Direct are well-positioned to capitalize on the mass exodus of correspondent banks from cross-border payments in the face of growing retail, SME, and other bank customer demand for cross-border payments. Given the modern, inclusive nature of their products, speed of funds delivery, transparency of payments, and commercial terms for banks—if they can make connecting easy and affordable, major global adoption is likely. Thomas added, “What’s interesting is that new entrants like Mastercard Move and Visa Direct expand payout options, but smaller banks can only plug into them if they have the right software partner. Otherwise, the cost and complexity of connecting make it nearly impossible.” Palmer agreed, noting, “This is where we shine—banks struggle to find resources to connect and operate with Mastercard Move; we eliminate up to 98% of the capex and can launch a bank on Move in weeks.” “You Can Do This” Correspondent banks struggle with effectively and efficiently dealing with the risks associated with how foreign originating institutions, MSBs, fintechs, and other counterparties execute KYC, KYB, AML, and more. But there’s also the financial risk associated with properly maintaining nostro vostro accounts, FBO accounts, or even safeguarded accounts. The ability to perform dynamic sub-ledgering and complex account and currency reconciliation isn’t supported by legacy systems, which rely on manual control mechanisms. This is why banks need new technology to ensure financial integrity, improve outcomes, lower costs, and address the root causes of why cross-border payments have been high-risk, opaque, costly, and slow. “A good example is a small bank we’re working with. They recognize the gap in correspondent banking and understand that our proprietary software can deliver the safety and efficiency they need to operate and win,” said Palmer. “The opportunities are material but realizing them takes the right technology and bank leadership. Banks can now do this.” While originating banks have a different set of risk, compliance, and payment problems, new software and new paradigms address their needs, too. And with the likes of Visa Direct and Mastercard Move, there’s no reason for a credit union, community bank, or smaller financial institution to lose a customer just because they don’t offer cross-border payments. There’s never been a better time for a bank, even smaller financial institutions, to capture their fair share of cross-border payments — with the right software and know-how. The post Making Cross-Border Payments Work at Smaller FIs—as Originating Institutions or Correspondent Banks appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Banking, Reimagined: The Role of ITMs 22:09

10 days ago22:09

22:09

As more people choose to bank online, the role of the traditional branch has undergone a transformation. Once the go-to place for every financial need, the branch is now primarily a hub for more complex transactions that can’t be completed digitally or at an ATM. At the center of this evolution is the interactive teller machine (ITM), which enables customers to connect with a live teller at any time of day, regardless of their distance from a physical branch. In a PaymentsJournal Podcast, Fiserv’s Chris Geganto , Senior Director of Product Strategy, and Craig Demetres , Vice President of ATM Product Management, spoke with James Wester , Co-Head of Payments at Javelin Strategy & Research about how ITMs are driving operational efficiency, lowering costs, and enhancing the customer experience at banks and credit unions across the country. The New Branch The financial institution branch is no longer just a place for simple financial transactions. It now serves as a vital connection point between consumers and the FI’s brand, its people, and its promise. Branches blend digital and physical touch points to deliver the kind of seamless customer journey that financial institutions have worked hard to create. Today’s branches even look different. Instead of a row of teller windows that once felt formal and uninviting, modern branches are open, welcoming spaces designed to foster personal relationships. They’re now tailored to support higher-value transactions rather than routine deposits and withdrawals. And while much of banking has shifted online—or to ATMs to a lesser extent—banks and credit unions still need to provide customers with a meaningful, in-person experience. “We still have a very personal relationship with our bank account, and with our money,” said Wester. “We still want to have a very personal relationship with our bank. Being thoughtful about preparing the branch for that relationship is very important.” Empathy vs Automation One challenge for every financial institution is balancing automation with empathy. Automation is about being fast and convenient—handling routine, rule-based client interactions quickly, consistently, and accurately. It addresses most of what consumers need from their bank, but it can also feel impersonal. Empathy sits at the opposite end of the spectrum. It’s thoughtful and personal, building trust and emotional connection, and ultimately deepening the customer’s relationship with the financial institution. It’s also slower and more cumbersome for the consumer, but there are times when it is sorely needed. Filing for a home loan or opening a small business account, for instance, often comes at a critical juncture in a customer’s life. “Finances really drive the human moments that matter for us,” said Geganto. “When you walk into a branch, you’re freeing your bankers up for those human moments, for those conversations about what matters most in your life.” Automation doesn’t always have to feel impersonal. With smart design and proactive messaging, banks can provide a seamless handoff to advisors so everyone is working with the same information. While consumers may start with an automated interaction, many will transition to a more personal connection. To keep that experience consistent, FIs must be intentional about embedding empathy into the digital journey that leads to an ITM. “Although it’s automated, it’s still a personal relationship between the banker and the actual customer itself that directs them to the actual ITM,” said Demetres. “These small credit unions and financial institutions need to make sure that they still have the person there to interact with the customer, whether it be on video or in person.” ITMs Bridge the Gap An ITM essentially extends the branch experience, expanding service hours and the geographic reach of the branch. It gives consumers the flexibility to conduct transactions on their own schedule, while still providing access to a human when needed. ITMs also unify the digital and physical channels, bringing channel convergence to life. “Your brand ethos is coming through that machine because you have trained your universal bankers who are on the other end of that machine in the engagement model that you spent so much time and effort and money to develop,” said Geganto. “It’s being replicated in a digital fashion.” For any smaller bank or credit union considering an ITM, the first question should be whether the experience can be customized. Can multiple languages be added to support the customer base? Will the voice guidance convey the right tone? Do the visual elements on screen reflect the brand? The automation should feel like a natural extension of the institution, not a generic out-of-the-box solution. Ensuring That the Crew Is Ready Staffing the ITM is a crucial part of the overall model. The team on the other side of the video must understand that the customer is navigating the system on their own but is seeking guidance. They need to be trained to recognize the types of critical situations that would bring a customer to the ITM, as well as to understand the strategy that the financial institution is deploying. They also need to monitor the data being collected closely. Reviewing analytics is a necessary part of making sure the strategy is effective and to identify areas for adjustment. “The banks and credit unions have to make sure they are being efficient while still keeping that human touch,” said Demetres. “They have to see what accounts and transactions are working, while keeping the human involvement.” Keeping the Human Touch ITMs have proven especially beneficial to credit unions and smaller banks that may not have the capacity for a fully staffed branch with extended hours. They can personalize ITMs to their own needs, reinforcing their brand while enhancing the ability to bring a personal touch to customer interactions. Whether a customer needs to complete a simple transaction or a more complex one, whether they require automation or a human touch, an ITM delivers. “First and foremost, it keeps the human in the loop, because finances are freely personal,” said Geganto. “When you remove the person, finances are just finances. You need the personal touch because it’s about helping them through those life moments. For every consumer you do that with, you’re building trust and transforming them into a brand ambassador for you.” Demetres added: “The customer needs to know that there’s always somebody there to support them. ‘Oh, I got this now. I’m never going to have to ask somebody how to use an ATM… how to use an ITM going forward.’ That’s a customer for life.” The post Banking, Reimagined: The Role of ITMs appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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The Invisible Checkout: Embedded Payments Transform Small Business 22:18

23 days ago22:18

22:18

Almost without notice, disappearing payments have shifted from novelty to expectation in small business transactions. A traveler arrives at an airport, books a rideshare, and checks into a hotel—never pulling out a wallet or handing over a card. The transaction happens seamlessly, almost invisibly. The same technology fueling consumer-facing apps is now within reach for small businesses. Research from Worldpay shows that 90% of small businesses consider embedded finance —the integration of financial services, including payments, directly into non-financial offerings—essential to their growth. In a PaymentsJournal podcast, Matt Downs , Group President of Worldpay for Platforms , and Christopher Miller , Lead Analyst of Emerging Payments at Javelin Strategy & Research, discussed how technological advances are making small business payments both more sophisticated and less visible at the same time. “Why are payments disappearing?” asked Downs. “Because consumers want ease. They don’t want to see the friction.” The Sweet Spot While they may see the benefit of disappearing payments, a small business faces a different reality than an independent contractor driving for a rideshare company. For small businesses, payments cannot simply vanish into the background. They need visibility and control—both to verify that transactions have been completed and to manage cash flow. Likewise, consumers may prefer that payments remain somewhat visible when dealing with small businesses, so they can make more informed choices based on factors like price or payment size. The sweet spot is a system where consumer can choose to dip, chip, or use a digital wallet—without having to rethink that decision every time they pay a small business. For the business, it means having access to a payment process that feels sophisticated yet intuitive, flexible yet low-effort to manage. “Building a solution that supports all of those elements is very challenging,” said Miller. “You have to be able to support all the way through the design elements and what the interface looks like, all the way back to the seamless handling of the payment processing itself.” Integrating into New Verticals The concept of delivering targeted lending within verticals is not new, but it has not yet been fully woven into the consumer experience. For example, a veterinary office may have offered a financing plan in the past, but it likely wasn’t something a customer could access through the same website where they booked their appointment. For the doctor, providing a lending product with fast approval that integrates directly into their existing systems can become a meaningful competitive advantage. “If you are a vet, the last thing you want to do is evaluate a bunch of different lending programs and take seven sales calls from seven lending programs to evaluate the right one who can integrate the lending product directly to the patient experience,” said Miller. “The market is looking for a solution that meets the needs with a minimum of risk.” The beauty of a vertical solution is that it is tailored to a business’ individual needs—whether that business is a veterinary practice, a restaurant, or a dry cleaner. To be effective, the software provider must understand the workflow, revenue streams, and nuances of the business, no matter how niche. Payments have evolved not only by becoming more complex, with more options for both payers and payees, but also by becoming increasingly specialized for the unique requirements of each business type. “That’s a whole new spin on finance,” said Downs. “Fifteen years ago, there were pretty good payment options out there for retail and restaurants, although they were pretty expensive until the cloud drove the cost down. But that also allowed more entrants to come in and say, ‘Hey, I want to solve use cases for veterinarians or food pop-up trucks.’” The specialization adds complexity to the process, making an embedded payment solution more of a necessity. “In an ever-evolving landscape of payment acceptance options, the number of merchants who are actually able to manage that on their own and make decisions to add or not add or build in the integrations is vanishingly small,” said Miller. “The idea that a platform is better situated to manage that complexity and that change is kind of a slam dunk.” Building Through AI Artificial intelligence is an important component of these new platforms. It helps companies better understand their customers’ needs and plays a key role in driving technological development. “It allows room for new entrants to come in and shake up weak software companies that weren’t good at understanding their customers at their core,” said Downs. “It’s going to challenge them. It’s going to have an effect on who the winners and losers are in this space. But in the end, the small businesses and consumers will win because they’re going to get better served.” Embedding AI directly into products gives merchants access to the insights that can transform a business. While AI requires large amounts of data, integrating it into a platform allows businesses with limited data to benefit from powerful analytics. For example, a small vet clinic may not have enough payment data on its own clients to accurately assess risk profiles—but AI can change that. While small businesses aspire to be sophisticated payment processers, they also don’t want a separate piece of software for the front office, another for the back office, a standalone banking suite, and so on. This has given rise to the notion of the “everything platform,”—software designed to help companies meet all of their processing needs in one place. With advancements in AI and technologies that can connect and integrate multiple platforms, the ecosystem is now ripe for embedded payments to support small businesses. Very few merchants are capable of managing their payments independently while deciding which integrations to adopt. Embedded payments allow their processes to remain not only customized but also state-of-the-art. “We take the heavy lifting, the operations, the payments, the financial underwriting, liability, everything that comes with adding more on,” said Downs. “We take that off the software company with a goal of just making sure it works for businesses and the consumer.” The post The Invisible Checkout: Embedded Payments Transform Small Business appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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How to Streamline the Onboarding Process and Speed Up Underwriting 18:11

5 weeks ago18:11

18:11

Customers signing up for new accounts and services can feel frustrated by the hoops they have to go through, assembling information and entering it in complicated, sometimes multiple forms, whether on paper or online. What they may not realize is that the process can be just as frustrating for the people working at financial institutions, or other businesses performing underwriting functions. Too often, technology forces both consumers and businesses to adapt to outdated onboarding processes rather than the other way around. In a PaymentsJournal Podcast, Penny Townsend , Chief Product Officer at Qualpay, and Don Apgar , Director of Merchant Payments at Javelin Strategy & Research, discussed how the next generation of onboarding and underwriting procedures could bring greater efficiency and effectiveness for everyone involved. A Siloed Approach to Onboarding Onboarding is a financial services company’s first opportunity to build a relationship with its customers, so it’s vital to make the process as painless as possible. Yet too many companies still make it cumbersome. For example: “When people sign up for a bank account, and want a debit or credit card along with the bank account there are multiple applications they have to fill out,” said Townsend. “If I applied for two or three different services, I likely have to fill in secondary and tertiary applications that don’t copy over the data already fed into it.” Financial services companies have long been a siloed environment, but many organizations are realizing that by connecting their onboarding processes, they can also streamline their internal systems. For example, it’s possible to combine for a business, a bank account, credit card processing, and ACH transaction processing into one application that flows seamlessly through underwriting. The key is to templatize the information and present it in a data-driven, no-code way, creating a unified experience across all financial products. The goal should be to shift the effort of customers bending to how the technology, the vendor and the implementation require data to be input to how can we optimize the experience to reduce repetition and breakdown the silos that existing for different financial products. Creating better customer experience and more transparency and integrity in the data used to manage ongoing risk and compliance. “My team is out there talking to people about how they actually onboard customers,” said Townsend. “Sometimes if some of the data has to change on the application, a new application has to be sent out, creating friction right at the beginning. Some applications are manually underwritten, which means they take the data set, log into the third-party tools, then verify that the data set matches what was on the application. After they’ve done the data verification, they’ll do the physical underwrite, but they’re manually inputting it maybe into two or three different systems for different tracking purposes. “So if you ask me about how automation helps scale onboarding operations, it’s a game changer,” said Townsend. “Move away from the bespoke applications that people have bought in order to solve problems, and start looking more broadly and more holistically. Ask the question, “how can I delight the consumer when they’re applying for something?” By making the onboarding experience as efficient, effective, and speedy as possible.” Bundling the Processes The implications extend beyond onboarding efficiencies. Consolidating multiple workflows into a single system powered by a common dataset not only streamlines operations but also enables businesses to present products together in combinations that align with how consumers prefer to buy them. “If somebody comes in to open a business DDA, you can ask if they would like to set up merchant services at the same time,” said Apgar. “You’re not making them go through a separate application. And what that does for the customer is that it incorporates multiple products into a single buying decision. With a discrete workflow, after they buy product A, you have to ask, now would you like to buy product B? If you can bundle B with A in the combined onboarding process, that makes the buying decision much easier for the consumer.” Benefits Throughout the Organization The onboarding application should be able to accommodate a variety of financial service products, treating each application as structured data that can be validated through automated tools. A simple rules-based engine can then provide a clear red light/green light decision on whether to proceed. The benefits of this approach cascade throughout the organization. As compliance requirements grow more complex, a transparent workflow becomes invaluable. Without technology that consolidates and supports the process, audits are difficult to manage because data is scattered across disparate systems. This structure also supports risk management throughout the customer lifecycle. Because underwriting data feeds directly into the risk engine within the same platform, all information remains consistent and accessible. If an underwrite needs to be revisited, the data and tools are already integrated. By simplifying the process, organizations can improve quality while reducing expenses. “We see that a lot in banking from our clients,” said Apgar. “For whichever product the customer requests, the team gathers the underwriting or risk metrics relevant for that product. If the customer wants a different product, they gather additional data from a different database. Measuring compliance and maintaining viability of the customer relationship requires stringing together a whole chain of information that’s not in an essential spot. There’s a ton of room for increased efficiency.” Townsend added: “One of my dreams is to make that experience be as transparent as possible. We want people to make that critical decision the same every single time, so we can see how that decision’s been made and know that that if I send the same data set tomorrow, the same decisions are actually going to be made.” Adding AI Into the Mix This is where artificial intelligence shines—culling through large amounts of data to find patterns and detect anomalies. It’s challenging to maintain a complete 360-degree view of the customer relationship as it evolves. At this point, any organization that automates underwriting is going to rely on AI and rules-based engines. Every business engaged in underwriting must have a policy reflected in the system in use. Too often, that policy is separated from the actual underwriting process, and people get caught out because they’re not truly following it. The next generation of platforms has the opportunity to bring that policy to life. “When you start to use all of that intelligence and let the actual policy breathe life within the platform, now you get transparency and true predictability,” said Townsend. It’s common for organizations to fall short by expecting underwriters to know everything about the policy and implement it manually. By shifting these elements to the platform, businesses can build greater transparency and predictability while also giving underwriters more space to focus on judgment-based decisions. When AI is introduced as a component, it not only adds options and flexibility but also enables the development of policies that are more adaptive—policies that better serve both customers and underwriters. The post How to Streamline the Onboarding Process and Speed Up Underwriting appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Why Bill Pay Is an Underutilized Touchpoint for Financial Institutions 15:24

8 weeks ago15:24

15:24

Amid the rise of subscriptions and digital services, consumers are juggling more bills than ever. In fact, the average U.S. household now pays around 10 bills each month—a growing list that can be tricky to track and manage. While more consumers are turning to their financial institution for help managing these responsibilities, many banks have continued to direct their innovation investments elsewhere. In a recent PaymentsJournal podcast, Shilpi Mittal, Director of Product Management at Fiserv, and James Wester , Co-Head of Payments at Javelin Strategy & Research, discussed the current state of bill pay, how the service drives customer engagement, and what’s next on the roadmap for bill pay innovation. Not Just a Utility Bill pay services have been a staple at banks for decades. Yet, because most financial institutions have robust, well-established processes in place, bill pay is often viewed as a basic, no-frills offering. “It seems like the state of bill pay is this thing you must offer because people expect it,” Wester said. “But there are so many other ways that people want to pay bills—whether it’s through digital channels or through a third party. Unfortunately, the bill pay product itself is still that basic portal where you go in, you find the company you want to pay, you enter an amount, and it gets paid.” While nearly every bank provides bill pay, it remains an indispensable service—after all, paying bills is an unavoidable part of life for most consumers. What’s more, the rising cost of many household expenses has driven the total U.S. bill pay market to new heights, now valued at roughly $4.46 trillion annually. “That’s not just a utility, it’s a massive consumer touchpoint,” Mittal said. “For years, financial institutions have treated bill pay as table stakes. It just was, so it didn’t get prioritized for innovation and that’s a missed opportunity. Bill pay directly impacts digital engagement, trust, and customer privacy.” A well-optimized bill pay has a strong correlation with customer retention, in part because it fosters regular, ongoing engagement. This consistent interaction creates more opportunities for financial institutions to become embedded in their customers’ daily lives. Once customers are drawn into a financial institution’s digital ecosystem through bill pay, many naturally explore additional products and services. “Be it a mortgage, a car loan, or a credit card—whatever it is—that consumers then say: ‘Hey, this is the place I pay my bills; this is also the place I manage my money; this is the place that I trust for my financial services; let me go look and see where I can find other things,’” Wester said. A Natural Moment of Engagement An improved customer experience is one byproduct of an efficient bill pay service, but there are many other benefits for financial institutions. “We partnered with a major financial institution to study this and found that customers who actively use bill pay maintain much higher loan balances, grow their deposit balances faster, and bring significantly higher net profit and profit growth compared to those who don’t pay their bills through their bank channel,” Mittal said. The impacts go beyond financial metrics. Bill payments drive more frequent logins, especially around due dates. This creates a natural moment of engagement—and if the experience is smooth and intuitive, users will keep coming back. Banks can capitalize on this behavior in several ways. Historically, bill pay has been desktop-first, but in recent years there’s been a strong shift toward mobile payments. A simplified, mobile-first payment flow reduces friction and abandonment, making it essential for every institution—especially those serving younger customers. “Legacy bill pay systems are missing the mark on how consumers, especially younger generations, manage their money today,” Mittal said. “Millennials and Gen Z use global banking five times more than their parents. They expect speed, convenience, and a frictionless experience. If it’s slow or clunky, they will abandon it.” Proactive Nudges and Predictive Reminders Because consumers are juggling more bills than ever, their payments are often scattered over multiple platforms—biller-direct apps, banking portals, and third-party tools. As a result, many are seeking a centralized, intuitive experience that helps them stay on top of their finances. “They’re just not looking for alerts, they want proactive nudges, predictive reminders, and instant confirmations,” Mittal said. “It’s about peace of mind. American families pay $14 billion in late fees. That’s not just a financial hit, it’s a stress multiplier. That is why behavioral insights are so critical. It’s about giving people control and reducing anxiety. When you integrate those into the experience, engagement follows. Consumers feel supported, not just served.” These concerns can quickly mount up. For example, missing a credit card payment can damage a consumer’s credit score, which in turn may hinder their ability to secure an auto loan or mortgage—or raise their borrowing costs. That’s why more consumers are turning to their banks for help in keeping their financial lives on track. While most banks already offer tools that can provide this support, those tools are often underutilized. “We now have all this data with these accounts,” Wester said. “This goes all the way back to the idea that the bank is the center of a person’s financial life. We have all this information and we can now begin to start putting in those predictive and proactive reminders. It can be small things, like the ability to know that you can access your paycheck sooner. Those are the types of things that consumers want to see and are responding to.” “Also, it’s not just getting access to your pay sooner, it’s then being able to pay those bills knowing that you have a due date coming up,” he said. “Being able to apply those deposits to paying those bills, that’s all possible now. But that’s the stuff that we are just not seeing in the way these tools are being built.” Surfacing Real-Time Payments Several factors are reshaping the bill pay paradigm. One key driver is the emergence of real-time payments rails—such as FedNow and RTP—which have raised expectations for instant settlement. “For the longest time, we argued that consumers don’t really care that much about settlement so long as they know that their payment is being recognized,” Wester said. “In other words, if I go to a third-party biller and I say, ‘I am paying you, please don’t cut off my cable or my cellphone,’ that was sufficient. What we are beginning to see now from consumers is that it’s not just the recognition of the payment, but when is it hitting the account?” As consumers become more aware of concepts like cash flow and liquidity, this growing financial literacy will further accelerate demand for real-time payment options. “FedNow is still in the very early stages, but when you look at all the real-time payment networks as a whole, it’s surfacing the need for bringing instant payments to bill pay and aligning it better with consumer expectations,” Mittal said. “I’m hoping it will help speed the process up, primarily from the biller’s perspective.” “There must be biller adoption of real-time payments in bill pay, which is going to be the longest tail,” she said. “It’s going to take us several years to bring everybody onto this journey.” Meaningful, Recurring Touchpoints Along with advances in payments infrastructure, there have also been substantial breakthroughs in bill payments platforms. For example, Fiserv’s CheckFree Next is designed as a one-stop bill pay solution for consumers using mobile devices. The platform recently introduced a processing model that streamlines payment flows and enables real-time bill payments. It also allows small and medium-sized businesses to use virtual cards in place of paper checks. Additionally, consumers can pay bills with credit cards on the platform—offering greater flexibility and the opportunity to earn rewards. “Here is where it gets really interesting,” Mittal said. “We are integrating Zelle, bill pay, transfers and other payment solutions into a single, intelligent, comprehensive payments offering. It’s dynamic, consumer-aware, and designed to meet people where they are. Imagine a system that knows your due dates, nudges you proactively, and helps you plan around your paycheck—all in one place.” “Our vision is to transform bill pay from a chore into a smart financial assistant,” she said. “Bill pay isn’t just about paying bills, it’s about creating meaningful, recurring touch points that build trust, drive engagement, and ultimately grow value for both the customer and the institution.” The post Why Bill Pay Is an Underutilized Touchpoint for Financial Institutions appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Exploring the Factors Driving Continued ACH Growth 11:29

8 weeks ago11:29

11:29

In just the first half of the year, ACH payment volume grew by 5.5% on a daily average basis, reaching roughly 17.25 billion payments. The growth is even more pronounced in terms of dollar value, with the ACH Network processing $45 trillion in the first half of 2025—a 6.8% increase compared to the same period last year. In a recent PaymentsJournal podcast, Michael Herd , Executive Vice President of ACH Network Administration at Nacha, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, examined the state of ACH, the payment types that are driving growth, and the future of the pay-by-bank. Hitting on All Cylinders According to Nacha, the ACH Network is experiencing substantial momentum and is on track to add two billion payments in 2025. The persistent growth signals that the ACH Network is poised to maintain its upward trajectory. “When I look at the metrics and consider ACH, quite often you’re just looking for general growth,” Riley said. “I look at the total volume of payments and that was solidly up, and the dollar value was significantly up. When you compare that to debit volumes in the U.S.—which only grew by 1%—it’s really significant. I see everything hitting on all cylinders.” Continuing Long-Standing Trends This shift is especially notable because it’s spread across multiple payment types. First, there are Same Day ACH payments—transactions that clear and settle on the same day they’re initiated. Volume rose by 15% year-over-year in Q2, putting this format on track to reach 1.3 billion same-day payments this year. “The second area I wanted to call out are business-to-business payments,” Herd said. “B2B volume on the ACH Network increased by over 10%, and this is a long-standing trend in ACH. While there are still pockets of check payments that are in use in the B2B space, I think it’s also clear by now that ACH is the predominant payment method in B2B. They tend to be much larger dollar payments and so that boosts the dollar volume that is moving through the ACH.” The third area seeing increased activity is consumer payments, which were up nearly 6% year-over-year. Together, these three segments have significantly expanded overall ACH volume and reinforced its role in the broader payments landscape. “It’s something that’s really been built into the economy,” Riley said. “When I think of myself as a consumer working professionally since 1980, I don’t think I’ve seen a physical paycheck since then. One way or another, I’m probably doing seven or eight in or out transactions on ACH just personally in a month, so I can imagine how those numbers stand out.” Growth Across the Board Within each of these segments, new use cases for ACH are continually emerging. For example, in the B2B payments space, ACH is gaining traction in healthcare claim payments—transactions made by health insurance payers to medical providers like hospitals, doctors, and dental practices. This area has seen a year-over-year increase of 10% in ACH usage. “I think there’s a pretty clear use case and benefits there for medical providers to get paid electronically, instead of waiting for a check to arrive in the mail,” Herd said. “I think that’s a clear benefit where even a standard ACH is a much faster payment than that check that will follow at some future date. We’re seeing strong growth there in that B2B vertical.” On the consumer side, the growing popularity of subscription-based services has led to broader adoption of ACH for recurring payments, including bill payments and donations. Consumers also frequently rely on ACH for account transfers, both one-time and recurring. The rise of online bank accounts, digital wallets, and other fintech solutions has further fueled the use of ACH for these types of transfers. Collectively, these segments and use cases also present strong opportunities for the continued growth and adoption of Same Day ACH. “We’re still seeing good growth in Same Day ACH across all the major ACH use cases,” Herd said. “That includes Direct Deposit of payroll and other consumer disbursements. It also includes consumer payments to businesses and other kinds of account transfers, and B2B payments.” A Unique Factor Amid this adoption, a significant development will impact the ACH Network this year: an executive order signed in March instructing the U.S. Treasury to eliminate paper check disbursements. With limited exceptions, the order directs a full transition to electronic payments for federal disbursements by Sept. 30, 2025, to the extent permitted by law. “It’s been a long time coming,” Herd said. “We should see additional migration of some volume of federal government check payments to ACH. Financial institutions should be assisting existing account holders that still receive federal government checks with options on how to enroll to receive those payments by Direct Deposit.” “One other lesson is that with no checks, there can be no check fraud,” he said. “That’s been a driving reason for the federal government to pursue this policy—paper checks have become probably the single largest source of fraud committed within the space of federal government payments.” Another major factor influencing the ACH Network is the growing adoption of pay-by-bank and open banking technologies. In this emerging model, consumers no longer need to manually enter their routing and account numbers for each transaction. Instead, they simply authorize a business or organization to securely access their banking information directly from their financial institution. “That should make enrollment for ACH easier and more seamless to the consumer, particularly in an all-digital or a mobile-first environment,” Herd said. “Many younger generations of consumers who’ve never had a checkbook don’t know what those routing and account numbers are.” “This is a method that should overcome that barrier to being able to enroll to use ACH payments, so we’re going to see that continue to expand,” he said. “Nacha currently has a work group that is looking at potential benefits and risks of using pay-by-bank in the marketplace.” Decades in the Making The transition from paper checks to digital payments has long been a topic of discussion in payments circles, with the shift unfolding over several decades. However, there are signs that this momentum is now accelerating. “In the federal government space, it’s been official policy to mandate the use of electronic payments since 1999,” Herd said. “In fact, one of my first assignments when I joined Nacha was to participate in the in the campaign around EFT ‘99 use. Without getting into all the dirty laundry, it’s taken a long time to get to the point where just about 99% plus of federal benefit payments are made using Direct Deposit or Direct Express card.” “There’s that last mile to go to get as close to 100% as possible, so it’s exciting to think that may actually happen,” he said. The post Exploring the Factors Driving Continued ACH Growth appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Amid Surging Stablecoin Use Cases, Payouts Stand Out 22:39

10 weeks ago22:39

22:39

The passage of the GENIUS Act in the U.S. has brought stablecoin interest to a fever pitch in recent months. However, even as more of the world’s leading organizations consider launching stablecoin, the use cases for these fiat-backed assets are still being unlocked. In a recent PaymentsJournal podcast, Nabil Manji , SVP, Head of Fintech Growth and Financial Partnerships at Worldpay, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, highlighted payouts as one of the most intriguing applications for stablecoins—a model that could offer dramatic benefits for merchants. At the Heart of Dovetailing Trends In addition to regulatory clarity in the U.S., there has been global momentum toward more transparent digital asset regulations. For example, the European Union recently passed its Markets in Crypto-Assets (MiCA) legislation. This improved regulated environment has made the space more attractive for both traditional financial institutions and corporates to explore digital assets. These organizations are considering stablecoins for several reasons, including payments, corporate treasury management, and yield generation. The combination of regulatory clarity and institutional interest has dovetailed with broader payments trends to bring stablecoins into the spotlight. “What I think makes the timing almost a perfect storm in a positive way is in many markets around the world, we’ve had domestic real-time payments,” Manji said. “The big outlier has been the U.S., where up until recently with RTP and FedNow, there hasn’t been relatively ubiquitous real-time payments.” “Very quickly, the world’s largest economy and the participants in it, are going to grow accustomed to having real-time payments for domestic use cases through those payment rails,” he said. In addition to the surge in real-time payments, cross-border e-commerce has continued to grow significantly, driven by factors like marketplace shopping, the gig economy, and social media commerce. Consumers increasingly expect these trends—real-time payments and cross-border transactions—to converge, and they don’t understand why an adequate solution isn’t yet available. Stablecoins are among the leading contenders to fill this gap because transactions are instant, efficient, and borderless. While their surface-level utility as a digital representation of the U.S. dollar is a game-changer, it’s only the beginning of what the technology can do. “It’s becoming clearer, even to savvy payment folks, that it is different from what we have had in the past,” Wester said. “That was one of the misconceptions for a while, it was ‘Don’t we already do something like that?’ Well, not really. Once you begin to understand what stablecoins can do in terms of being a programmable digital bearer instrument, that idea becomes very powerful, and people begin to explore what they can do with it.” The Two Lenses While payment acceptance has traditionally taken precedence, payouts are at the heart of many merchants’ business models. These companies are searching for ways to make real-time, inexpensive payouts to beneficiaries, which could include employees, vendors, customers or other third parties. These payouts are often high-frequency and low-value—such as those a marketplace might make to its sellers or a gig company to its workers. They could also include an airline reimbursing a passenger for disrupted travel plans, or an online gaming company paying out winnings to a user. Often, these merchants need to make payout in a relatively high number of currencies and geographies. Additionally, many of the best candidates for stablecoin payouts serve unique customer bases. “You layer on top of that the type of customers of theirs that would want to receive a stablecoin instead of fiat currency,” Manji said. “Then you layer on top the recipients that are in places like countries that have volatile currencies, or countries that the population is underbanked or unbanked.” “Also, populations where they’ve got a relatively young age skew and people that want something like a stablecoin, because they’re comfortable with investing and generating yield on a stablecoin or operating something like a crypto wallet,” he said. “Those are the two lenses where this makes sense to offer to customers.” Cutting Through the Complexity Though stablecoin payouts may seem like a no-brainer given the regulatory environment and consumer familiarity, many merchants are still concerned about the implications of adopting cryptocurrency for payouts. “One of the problems with payments people is we’re fascinated with payments, thinking everybody else is fascinated with payments too, and they’re not,” Wester said. “They just want to make sure that their money moves. We started talking about blockchain, digital assets, cryptos, stablecoins and how cool it is from a technology standpoint. All they did was look at it and say, ‘Wait, how are payments done? This sounds complex.’” However, advancements in technology have made global payouts using stablecoins virtually indistinguishable from payouts in fiat currencies. For example, on Worldpay’s platform, a merchant can fund their account in various fiat currencies. They can then initiate a payout request via an API call or by uploading a batch file containing hundreds or thousands of payments requests. Alternatively, they can log into the online portal to submit a one-off manual payment. Regardless of the method, the payment instruction determines which currency should be deducted from the merchant’s account and which currency should be paid out to the recipient. “For example, they may say, ‘Use some of my USD balance that I funded you to payout one of my marketplace sellers in Turkish lira,” Manji said. “We have connections in our platform to payout in over 130 currencies in over 180 markets, of which approximately 80 are on real-time payment rails. We can, in most cases, execute a relatively instantaneous payout to a beneficiary in countries covering most of the world’s GDP.” The addition of stablecoin payouts to the platform means that Circle’s USDC has essentially become the 131st payout currency—making the adoption of stablecoin payouts as simple as the click of a button. “There’s no new integration; there’s no new platform; there’s no new logic,” Manji said. “All we’ve done is in the field in the API where you put the destination currency, instead of putting something like Turkish lira or Argentinian peso, you just put USDC. Instead of sending us an international bank account number or a routing number and account number, you send us a wallet address and we take care of it from there.” “So, the merchant doesn’t need any crypto wallet,” he said. “They don’t need to hold USDC. They don’t need to touch USDC. They don’t need to know what chain the customer’s wallet is on. They don’t need to screen the wallet. We take care of all of that for them.” Across the Spectrum This functionality can be a game-changer for merchants, but it is just the beginning of the road for stablecoins. Once organizations become accustomed to stablecoin payouts, they will begin to recognize other benefits, such as the ability to automatically execute transactions. “The people who seem to light up the most when you talk about programmability are corporate treasurers,” Wester said. “They’re like, ‘I can do a lot of stuff that right now is either a manual process or an inefficient process.’ I think that is going to be an area where we’re going to see a lot of development.” The recent surge of stablecoin-related news has led some to wonder when the hype might fade. However, the efficiencies and capabilities of stablecoins are likely to keep them at the forefront of the financial services industry for many years to come. “There is this increasing interest from traditional financial institutions, from the payment ecosystem, from our clients, and from consumers to start using stablecoins in a meaningful way,” Manji said. “I think there’s this real interest now—across the spectrum—that’s giving us a lot of excitement in terms of how we’re thinking about the space and how we want to invest.” The post Amid Surging Stablecoin Use Cases, Payouts Stand Out appeared first on PaymentsJournal .…

The PaymentsJournal Podcast

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Share and Share Alike: The Promise of Cyber Fusion 20:43

10 weeks ago20:43