Paul Walvik-Joynt, SVP, Commercialization, Mastercard Bill Pay, speaks at EBAday 2023 about key takeaways from the event, innovations in facilitating bill payments and the importance of creating the best possible experience for consumers and businesses.
FedNow chases real-time payments front-runners
The Federal Reserve’s long-anticipated real-time payments system, FedNow, is scheduled to go live next year.
Yet businesses and consumers will probably have to wait years before they can rely on ubiquitous U.S. instant payments, according to industry professionals who have been involved in the project.
The new bank-to-bank payment rail aims to modernize the U.S. payments system and increase its efficiency by allowing payments to be sent and received in seconds instead of days. That eliminates credit risk tied to time lags and allows businesses and consumers to spend and invest their money sooner.
The U.S. trails a host of countries in implementing a real-time system. Such transactions accounted for less than 1% of payments volume in the U.S. last year compared with a 5.7% share in China, according to an April study by payments processor ACI Worldwide in collaboration with the Centre for Economics and Business Research.
That means the U.S. captured just $1.35 billion in macroeconomic benefits from real-time benefits while China netted $18.65 billion in benefits. China and emerging countries such as India and Brazil are racking up the advantages from real-time payments while Western nations, particularly the U.S., are missing out, according to ACI.
“The U.S. market, relatively speaking, is quite far behind other markets,” said Andrew Gomez, a managing consultant at Lipis Advisors in Berlin.
Open payments firm Volt raises $60m
London-based open payments gateway Volt is targeting Asia Pacific and the Americas after securing $60 million in a Series B funding round led by IVP.
CommerzVentures, EQT Ventures, Augmentum Fintech and Fuel Ventures joined the round.
Founded in 2019, Volt offers seamless access to Open Banking payments in Europe, connecting over 5000 banks across the UK and EU, bringing together a new generation of account-to-account payments infrastructure to a single point of access.
The firm has also landed in Brazil and has Australian market entry planned for later in 2023, as well as its sights set on the US market.
Angela Zhu, partner, IVP, says: “As over 70 countries, including the US, transition to RTP systems, merchants are experiencing the immense benefits of instant, secure, and cost-effective A2A payments.
“With the value of A2A payments in e-commerce transactions set to reach $757 billion by 2026, Volt is well positioned to redefine the future of payments on a global scale.”