Call them what you will – Instant Payment Systems, Fast Payment Systems, Real Time Payments – or by their brands UPI, RTP® and more – these payment systems are experiencing success around the world.

As the US stands weeks away from launching FedNow, we decided to take a closer look at the success of one of the hottest newcomers to the instant payments scene – Brazil’s Pix.

As it turns out, there is much to be learned from success.

Launched in November 2020, in just 2 years Pix had processed R$13 Trillion. Remarkable as that statistic is, it is more impressive when you realize that within 7 months of its launch, Pix was processing more volume than credit documents (DOC), electronic transfers (TED), and bank slips combined. By February of 2022, Pix had overtaken debit and credit card transaction volumes. By December of 2022 Pix broke a record – processing more than 100 million transactions in 24 hours.

If that is not enough, it looks to be accomplishing what many countries hope for with a new fast payment system – Pix has moved the needle on the financially underserved, shifting from 50% of the population being unbanked to 75% of the population using Pix.

In this first episode of a 3-part series, Yvette Bohanan sits down with Cici Northup, Joanna Wisniecka, and Elizabeth McQuerry to discuss the “state of play” for fast payment systems and the key questions to ask about what the future holds for all of us as the world enters a phase of transformative modernization.

Yvette Bohanan:

Welcome to Payments On Fire, a podcast from Glenbrook Partners about the payments industry, how it works, and trends in its evolution.

Hello, I’m Yvette Bohanan, a partner at Glenbrook and your host for Payments on Fire. This episode is the first of a three-part series on Pix, Brazil’s fast payment network, now going into its third year. We’re kicking off the series with this episode looking broadly at what is happening around the world with fast, sometimes called instant or real time payments. We know credit push transfers between bank accounts with near immediate finality have been around for a long time, but they were mainly in the realm of wholesale payments, transactions between central banks and large financial institutions. Moving from wholesale to retail payments with adoption by consumers and businesses was challenging. But in 2008, that started to change. In response to EU regulations and with the help of new technology, we saw the launch of the UK fast payment system, or FPS, at the beginning of a foundation phase, with countries creating multi-year modernization roadmaps that incorporated fast payment systems in their long-term strategies.

If you’ve been following the launches around the world, you’ll know that this foundation phase for fast payments is moving into a transformative stage. Adoption by consumers and businesses is accelerating. New capabilities like request to pay are supporting new use cases, and regulators are seeing some advantages of these systems, whether it’s in greater financial inclusion, or simply allowing account holders to have more control over the movement of funds in their accounts. So joining me for this first episode are Joanna Wisniecka, one of Glenbrook’s senior leaders with deep expertise in fast payments and many other things.

Joanna Wisniecka:

Hi, Yvette.

Yvette Bohanan:

Cici Northup. Hi, Joanna. Cici Northup, one of our associate partners who has led projects addressing multiple dimensions of fast payments, including governance, operating rules, risk management. Cici, welcome.

Cici Northup:

Thanks, Yvette.

Yvette Bohanan:

And Elizabeth McQuerry, a partner at Glenbrook who has been helping countries with their fast payments system strategies for a number of years. Elizabeth, welcome.

Elizabeth McQuerry:

Thanks, Yvette.

Yvette Bohanan:

Yeah, hi.

Elizabeth McQuerry:

Great to be here.

Yvette Bohanan:

So welcome to all of you. Thanks for joining me on this episode. Let’s get started. Elizabeth, we’re talking a lot about these systems these days. Can we start just by defining success in this space? Sometimes you hear about UPI, you hear about Pix, and they’re considered massively successful. So my question is, by what measure? How do regulators, system operators, financial institutions, how are they all measuring success?

Elizabeth McQuerry:

Yeah, absolutely. I think the massive part speaks most directly to just usage, right? Uptake. So volumes of payments, how many transactions are going through the system, how many financial institutions are also participating here, how many use cases have been incorporated into the system, which really speaks to how the ecosystem grows, right? If we don’t have commerce use cases, we don’t have businesses in the payment system. And both Pix and UPI have been very successful in bringing in both of those, both consumers, as well as businesses, and government for that matter. Because as we know, governments make and receive a lot of payments, so they’re important participants in the system. And I mean government is a payment acceptor or originator not-

Yvette Bohanan:

Right.

Elizabeth McQuerry:

… a regulator in that case. But of course, regulators may have a different view on what massive success is. It might be that they found or digital payment system as opposed to cash. And certainly, I think a lot of regulators are concerned about promoting financial inclusion, right? So how many more people are using this digital instruments and having a safe place to store their cash, maybe building a credit score, access to other small credits, that sort of thing. And on a really kind of… It’s multifaceted, if you will. So it’s not just one thing or the other. And I think just one other thought, that massive success was really about becoming a way that we pay, becoming a part of our daily life. And until you reach that, you probably… You may have some success, but the massive part may not come, right? It needs to be secondhand, right?

Yvette Bohanan:

That’s right. That’s right. Yeah. Moderate success is kind of a meh here. We want massive, but it’s hard to get.

Elizabeth McQuerry:

Absolutely.

Yvette Bohanan:

So lots of ways to measure it. All the different stakeholders have to be involved. They’re all going to look at it differently. When we talk about modern modernization plan, so in incorporating regulatory updates or a regulatory nudge to jumpstart adoption, how important are the nudges to a system success? I don’t know. Joanna, you’ve kind of played around in this space for a while. What’s the role of regulation here? How strong? How weak? What’s happening?

Joanna Wisniecka:

Yeah. And maybe part of my answer will be informed by having been a regulator in the past. So I-

Yvette Bohanan:

Yes. Joanna, I didn’t want to call you out here, but you self-identified.

Joanna Wisniecka:

I did. I did self-identify.

Yvette Bohanan:

And here we are.

Joanna Wisniecka:

Of course, I think regulators do play a super important role. There’s still a part of that in me. And really, they can play that role in different ways, enabling, building, and operating the system. So quite directly, they play a role. Let me just play maybe a few ways that they do that. So in the case where they’re actually playing the operator role, they can drive the design of these systems and take actions to encourage adoption that’s quite direct. So a couple of examples of this, we have a lot of focus here on Brazil’s Pix and that’s operated by the central Bank of Brazil. And they’ve really set the tone from the start by developing Pix as a public good. And they mandated that the large institutions had to use it, so that’s quite direct. Pricing is another area where not only do they have influence, but they actually can directly direct it.

So one is in setting fees for the participants in the systems, so the ones that are directly members. In some cases, they go beyond that, and they actually set guidance or pricing, guidance more appropriately, for what participants can charge the end users. So Pix is the perfect example for P2P transactions. So person to person transfers, those are free in Pix. And UPI as well, and NDSUPI. For those types of transactions, there are some change happening there for the merchant side, Elizabeth highlighted also the use of the systems by governments, public agencies. That can directly bring volume into the system and contribute to their success. So during COVID, we saw that there was an increased use of the systems by government agencies to enable fast distribution of social payments. A couple of weeks ago, I think this is notable, when FedNow announced its launch for this year, for July, one meaningful part of an announcement is that the US Treasury will be one of the participants right from the start, right from the pilot.

I think that’s not a subtle nudge for others to really pay attention. The US treasury is using the system. That’s a signal. And of course, there’s the maybe more traditional role of regulators, and that’s developing regulations and policies that more broadly can create an ecosystem that supports these systems and their ability to thrive and range of regulations there, making it easier for end users to actually use digital financial services. That can be through requiring national ID through allowing for EKYC, which makes it easier for end users to open accounts. Licensing is pretty direct. What types of institutions have access to these systems directly? Broader safety and soundness rags. So what are some of the consumer protections that are in place, for example? So those are just some examples, but I think they play a massive role.

Yvette Bohanan:

Yeah. Yeah. No. Okay. So Cici, I want you to chime in here. You’ve traveled all over the world helping countries establish their fast payment strategies and getting them from thinking about this to moving into implementation. So what, in your mind, sets countries apart that realize big benefits from these initiatives and those that kind of struggle to see the potential, the massively successful metric versus that moderately successful?

Cici Northup:

Excellent question, Yvette. I think, as Elizabeth mentioned, there’s sort of many lenses through which you can describe success. Success is not binary. But if you sort of default to the sort of classic way that we think about success, so volume, how many transactions are flowing through the system, there’s a number of enablers that can sort of help a country experience success. And we’re consultants, we can’t help but put a framework together. So when I think about this. I often like to think about it from sort of a macro to a micro perspective. So at a macro environment, what are the market characteristics of the country that you’re in? How available is ICT infrastructure? How available is road infrastructure? How many people have access to accounts? Some of these really basic… ID is another one that comes up. A lot of these sort of core basic market characteristics can really sort of support or thwart success.

The second, sort of moving down to our more micro, is enabling policy and regulation. Joanna mentioned a number of things regulators can do to help ignite and catalyze these systems. Having a champion is a really important thing that we’ve seen, having sort of a policy champion, and then seeing regulation that doesn’t sort of prevent the system from behaving in a way that we want it to behave. There’s other regulations that can also support success, things like appropriate consumer protection policies, tiered KYC policies. A lot of these can be very influential as to whether we see volume in the system or whether it’s sort of a take some time to jumpstart. Sort of again, sort of moving down towards our next micro from market characteristics to policy and reg, the system design has a lot of influence as to whether we see uptake or not. How costly is the system for the institutions to participate in?

We like to reference Brazil, and I can’t help but do it again here. From what I understand, it’s like less than a US cent per 10 transactions for each financial institution connected. That really, really low cost participant fee allows the institutions to make the business case for low cost end user payments, which is often a necessity to either, A, bring people on who are new to digital payments, or B, switch people over from habituated payments behavior that they may be accustomed to. So that system design decisions can be very influential. And then of course, to no surprise, the institutional readiness and institutional factors play a role, as well as end users. And how familiar with digital financial services are our end users, how habituated are they to certain payment methods? How much do they like certain payment methods? All of these play a very sizable role. So for better or for worse, a typical answer is it depends, and you need to look at it through a lot of different lenses.

Yvette Bohanan:

Yeah. And so when we are looking at some of the changes that are taking place in countries that go from this implementation phase, laying the groundwork, they have something stood up, they have at least one case. Typically, it’s a person to person kind of transaction at a minimum. And we’re moving into this transformation where they’re adding capabilities, where they’re trying to build out their use cases. What other big aha moments are you seeing as these countries sort of shift gears into this transformation stage? Joanna, have you observed anything that was sort of particularly interesting?

Joanna Wisniecka:

Yeah, and you’re starting to highlight some of these already. What’s interesting with UK fast payments really being the kind of typically reference pioneer in 2008, we now have more than a decade of insight of how systems may evolve. And one of the things that we’re seeing. Ultimately, this is all about adoption, right? So that’s been mentioned already. What does success look like? Getting more volume, more use of the system and also more users, new users in the system. So that’s kind of getting to that financial inclusion perspective. So how has that been done? What have been some of the approaches? And you already mentioned the expanded use cases. So many systems build actually for the ability to be able to support multiple use cases from the start. Not all, but the foundational use case that really contributes to the initial volume are those person to person transfer.

So that’s the I send money to a friend to pay for my half of dinner, really the person to person. The other use cases tend to grow in volume over time, like the person to business payments, so your typical consumer pay for purchasing goods, making a bill payment to a company, and government payments as well. So what’s really important there and what we’re seeing is that there are enablers or there are ways to make those use cases more accessible to end users. And so some examples of that are QR codes, and that’s something we’re seeing in many countries. It really, as an example, makes payment at the point of sale potentially easier by scanning a QR code to initiate the payment. That’s not exclusively for merchant payments, that can also be for person to person, but it’s sort of an additional overlay. It’s an additional way to make those payments easier for end users.

Request for payment is another one. It’s another functionality. So it in itself is not the initiation of the payment, but it’s a way for billers to essentially send an invoice, send a bill to customers to make it easier then for them to initiate the actual payment. And we’re seeing successes of these enablers in place. So for example, one that’s to me particularly striking, and yes, we’re going to bring up Pix again, is that use of Pix at merchants is now higher than debit cards. Now, that’s pretty significant. There are other things that we’re paying attention to and we’re seeing. I would not say this is quite an enabler, but it is a trend we’re seeing, that as part of the evolution as volumes increase, there is also a component of fraud or fraudsters attracted to doing what they do best. And so the systems themselves are focusing more on the safety and security of the services that they provide, both through encouraging stronger risk mitigation at the participant level, but also supporting participants in that, so building more functionalities into the platforms to support them in managing fraud.

Maybe looking ahead a little bit, I will be curious to see where kind of the next frontier is of expanding use cases and enabling use cases. And one that I’m particularly paying attention to is the cross-border payments use case. So we’re mainly talking about fast domestic here and how those have evolved. I’m curious to see what the next frontier is in linking the systems, enabling cross-border within the systems and where that takes us. So what is the next decade going to look like?

Yvette Bohanan:

Yeah, so it’s kind of interesting just to reflect on this conversation so far, this notion of people being used to paying a certain way. And then you all could almost turn that insight out though. Couldn’t you say the level of dissatisfaction of those options that they have, even if they’re habituated, can really spur adoption, right? But we’re also saying… Joanna, I’m hearing you say that safety and soundness and trust has to be part of this too, and then there’s economic factors that you have to consider. So you lay the foundation. And then when you really want transformation, you’re revisiting all of these things all over again as you expand use cases and really develop this out. So UK been at it for a long time, and they’ve had some successes, and they’ve had some things that have kind of fallen flat too, right? And that’s normal and to be expected. You don’t just hit it out of the park every single time.

So it is kind of instructive to look at what’s been around for a while and then where things are headed. And they’re all in different phases of transformation. I’m curious, Elizabeth… Joanna’s bringing up the next big thing, right? It’s cross-border. And it’s top of mind. We have the BIS with Project Nexus. We have a lot of countries testing this. We’ve had RTP testing with Europe over the last year, year and a half. There’s a lot of work being done by the Monetary Authority of Singapore to connect fast payment systems cross-border in that region. What do you see happening here for cross-border with fast payments?

Elizabeth McQuerry:

Yeah, truly impressive, what is happening. And it’s not really a joke, but it seems though that you know wake up in the morning and you read about Singapore connecting to another country. Today was Malaysia and QR codes, right? That’s pretty impressive. Only a month ago, it was to India. And it seems like… And I think there’s no doubt that the pace of change in the cross-border space instant and otherwise is accelerating. Lots of building blocks have been put in place. I also think if we take a step back and think about this for a moment, other building blocks have been getting us here, right? So certainly SWIFT gpi is the big step in this direction, and even other elements like the Federal Reserve has been connected to Mexico’s Bay system, their instant payment system for a number of years. So ADH on one side, instant on the other countryside.

So little bit like that quote that we all know from William Gibson and the Glenbrook Payments Boot Camp, something like… Of course I’m going to get it slightly wrong here now, but it’s all around us. We just don’t really see it until it’s here in a more visual way. And now it’s really here in a more visual way. And certainly the Monetary Authority of Singapore has taken a true leadership position here working on these various bilateral connections within the region. And I understand that they’re also doing major supporter of what’s happening in the larger multilateral explorations that are going on with Project Nexus. And my original read of Project Nexus was, it’s an impressive endeavor by any measure, but honestly, it was putting together things that have been talked about in the industry for quite a while. Of course, doing it had never been done. So that’s a other thing.

But the recent report, even just in the past couple of weeks that they put out a sort of status update and changes or enhancements, edits effectively to their model, pretty impressive, where they’re talking about not creating a super structure, if you will, but bringing each country together really with their own unique starting points, right? And some of those unique starting points are very important for success. I think we find that fast payments victims have done best, so thank India, thank Brazil, where there are not only traditional banks in the system, but there are other non-bank authorized providers there. And so now Project Nexus is saying that these players can be part of this, not just a bank to bank connection. It’s and whatever the country is comfortable with. And that’s huge. And I think we’ll see that as being… I have to think it’s going to be an element of success. Particularly when we want to think about cross-border payments, it’s something more than, or beyond invoice payments, right?

What about remittances, family payments, and just other things that people do? It’s not all container shipment of widgets from country A to country B, and the transparency that goes along with it. So can you tell that I’m excited about this.

Yvette Bohanan:

I think you’re onto something here. I think you’re onto something here. And I think a lot of people… In the industry, a lot of people looking for a better way to do things globally, global commerce and building global commerce, and simplifying global commerce across all these use cases is just… Everyone wants it. If everyone can agree on one thing here, it’s we can make this better, right? We need to make this better. And like you said, it’s the ideas have been around for a long time, but putting it together and actually taking action. And I think what’s exciting is you’re seeing action. For the first time, you’re seeing meaningful action, and you’re seeing countries now hitting their stride with the systems, and they have the capability to actually do something. It seems in the realm of possible, instead of, oh my gosh, we can never do that with what we have back here in at the central bank or at the commercial banks or whatever, at this provider.

So yeah, time to be excited. We say that all the time, but it’s actually true here. We’re at a very interesting intersection. Let’s talk about economics, right? Part of the shift here, part of the mental shift is not just about the technology, it’s not just about the understanding and the excitement. It’s people make money moving money. There’s money to be made in this industry, and the revenue streams shift when you do something at this scale. So which way is the wind blowing when it comes to generating income with these systems, Joanna. Where do the pools move to?

Joanna Wisniecka:

Great question. This theme seems to be coming up already in this conversation on its own, but we mentioned the P2P use cases is typically kind of the foundational one. And we’re really seeing a movement towards making those types of payments low cost, and as we’ve said in some cases, no cost at all to end users. So the revenue is typically not going to be coming from those types of transfers. Now, that’s not to say that there is no revenue in payments, there are opportunities and other use cases. So typically, what we’re seeing. And even in the systems that are very committed to low cost to viewing payments and those systems as a public good, there is an opportunity for certain use cases for participants to earn revenue. And that tends to be the person to business or business related payments, whether again, that’s merchant payments, payments for good and services, bill payments, your typical maybe B2B payments.

And there are opportunities beyond payments, right? So payments and a typical end user financial institution or whatever participants there are in the systems, payments are really the first touchpoint, right? So the transaction accounts initially being used for payments, that’s really the starting point. It’s the starting point of the relationship. And once those relationships are established, there are often revenue opportunities from other services that can be provided. So for cash out services, for example, for lending, for insurance, for a number of financial services that can be provided, those can certainly generate revenue. And so back to the original point of what success and pointing to volume, well, as more users begin to use these systems and are attracted to the digital financial services, the revenue pie grows. So it’s not just that there’s kind of a shift in where the revenue’s coming from. The pie itself is getting bigger, and so there are opportunities.

Yvette Bohanan:

And we do see that in these really massively successful environments. You see stakeholders standing up and saying, “Yeah, I can see what’s happening here.” And it is a big mental shift because entrenched revenue streams are hard to let go of. So there’s the habitual usage pattern over here of end parties, and there’s this sort of entrenched revenue stream, and you’ve got some real strong anchors here that you’re trying to break away from. So we often get the question in our workshops that goes something like this, will we ever get rid of a core payment system? There are six now. And when you look over the horizon, I’m curious, you do so much work in this space, do you see a time when fast payments will replace or actually eliminate other systems where there’ll be a true shift in volume, a true retirement? And are there places in the world where you’re seeing this as a strategic objective?

Cici Northup:

So great question, Yvette. I want to answer this by sort of grounding us in some thinking related to our core payment systems, which is that they are critically important to the success of how an economy operates. And each of them serves different purposes, use cases and goals. So they are each individually playing a very important role. I also want to add that each one of these systems is constantly innovating. The cards systems are a great example of this. They are constantly evolving to better meet the needs of their constituents and end users. So the idea that one new system may suddenly sort of thwart volumes through another is sort of shocking to me as someone who’s been in the payment system for 10 years. So in short, I think the answer is no. That being said, this question, people do take the time to think about how to answer this question, and I do think it’s worth discussing.

So an example from some work I did about five to seven years ago, I was working actually with some folks in a country that were designing and implementing a fast payment system. And in the early stages of thinking about how to bring this system to life, a question came up, which was, can we simply upgrade our ACH system? We have an ACH system, it works well. Why can’t we just use that? Ultimately, this country decided not to go that route because of this sort of notion that I mentioned. Different systems serve different use cases and goals, and have different design elements that sort of tailor specifically to those needs. And they recognize, for their country and their users, they did need these two discrete systems to exist in parallel.

That being said, we were recently in discussions with some folks in Australia who are in… The ecosystem wide stakeholders are in a public dialogue about whether or not they should retire their ACH system and shift all ACH volumes over to NPP, their fast payment system. So I faced this question five to seven years ago. For that country context, it wasn’t well suited. Fast forward to today, another country is exploring this, and it may be well suited for them. So I think these core systems are critically important. It’s an excellent question, but it’s not one to take lightly, and I don’t suspect that it is something that we would see take place rapidly where fast systems would be the only core system, as an extreme example, on our slide of core systems.

Yvette Bohanan:

Yeah. Yeah. I think it’s interesting because the poster child for all of this has always been the check system on some respects. Everyone’s been picking on checks for years and years and years, and they’re still around and they still work.

Cici Northup:

Exactly.

Yvette Bohanan:

Yeah. And ACH, 50 years, hotter than ever. So we have different needs, different use cases, different things that have to be taken into consideration.

Cici Northup:

And just one more point, cash is a common payment system that people in many ways look to compete with or shift volumes away from and shift volumes from cash to digital. But again, even in countries where you see a strong digitization of payments, you see that cash still serves a very important role. Physical cash still serves a very important role, and you see state and countrywide regulators stepping into say you must accept cash, and mandating the acceptance of cash. So again, even in instances where there is a clear value prop for, say most of the users in a country, that still does not mean we will see a complete retirement of another system.

Yvette Bohanan:

This is all a big evolution, right? It’s not a revolution. When we say fast payments are going from a foundation phase to a transformative phase, and we say 2008 is when it started with the UK’s faster payment system, we’re talking about a pretty long time. And we are seeing new fast payment systems come online faster, for lack of a better word, with more expediency, because the technology and the know-how is there. So once the regulatory and the ideas come together and the stakeholders come together, the technology is no longer as big of a hindrance or as big of a question mark. There’s things that we’re standardizing around in terms of the tech, and the hard stuff is more the regulation and the behavior change and education, all these things. But we’ve been talking. We just had a couple podcasts with Nacha right here in the US, and we keep joking that after 50 years, ACH is hotter than ever, and we still believe it and they’re still seeing volumes going up.

So you’re right. I agree with you. There’s situations where you’re going to see some volume shift, but I don’t think you can say in a blanket way, all the volume’s going to go from point A to point B, system one to system two anywhere in the world. I think it’s going to depend on the country. I think it depends on their infrastructure. I think it depends on all those psychographic, demographic discussions we have about why people pay certain ways. There’s just so many different factors here, and this takes time. But I think there are places where fast payments are making a big impact in countries, and it’s going to be interesting to see how this all shakes out over the next decade. But this isn’t something like you’re going to wake up… You wake up tomorrow in Monetary Authority of Singapore’s connected to Malaysia, but you don’t wake up tomorrow and you hear the ACH system is gone. We’d all be trading in tomatoes if that happens, so we don’t want that to happen.

Elizabeth McQuerry:

To that point, we are actually in our 50th year of faster payment. Japan, 19, what, 73 was the first instance of a faster payment system. It doesn’t look exactly like what we call that today, but things have evolved, right? And the UK was the first sort of one that we talk about as being sort of the modern faster payment system, but it doesn’t look like what we see in the market today either. In Mexico, 2004. And I think South Africa had something similar in between. So we learned, and we’ve evolved. But it is happening. The pace of change is happening much faster, clearly.

Yvette Bohanan:

Yeah. And I can’t even imagine the size of the computer room in Japan, 50 years ago trying to do this, right? It’s just so different. When we say it’s a different world… You see all this stuff all the time, but my kids can’t even relate to what my life was like 50 years ago. They’re like, “You got to be joking.” So it’s been changing. It’s been shifting. We’re kind of in that modern era of fast payments, if you will. And I think that’s the part that is intriguing because it’s like everything kind of coming together and aligning. The technology, the regulation, the willingness for adoption between end parties, there’s sort of this alignment that’s happening right now, and that’s why we can point to the work of the Monetary Authority of Singapore, the point to the work being done by the Central Bank of Brazil, by RBI and NPCI in India with UPI, and other places too.

Saudi Arabia’s done some really amazing work in the space, the EU, of course, with SEPA, and the UK, Australia, Canada. You can just go down the list. And of course, Japan’s on like version what, 11, 12? I’ve already lost count. So everyone’s kind of getting into the game, but they can actually point to success stories now and say, “We’ve been trying this for a long time, but hey look, it’s working.” What makes this exciting and interesting, you’ve been working as a key representative for Glenbrook with the Faster Payments Council here in the US on the barometer-

Elizabeth McQuerry:

Yeah, absolutely.

Yvette Bohanan:

… for the last few years. And you’re gearing up for the 2023 survey, or you’re in the midst of the 2023 survey right now. One thing that stuck with me about the most recent results of the survey of the barometer was that the organizations survey, how many… A lot, right? You were talking hundreds-

Elizabeth McQuerry:

Few hundreds.

Yvette Bohanan:

Few hundreds. So across the US, all different types of stakeholders. There’s a lack of satisfaction in the progress that we’re seeing. And so the response to the question of, how satisfied are you with the US’ progress in fast payments, is sliding. It went down to 43% saying they were satisfied, rather than 49, which is a pretty significant year over year delta. What do you think this is signaling in the us? Here we are, we’ve got two, going on three systems, and we’re not exactly on the tip of the spear here from a global perspective.

Elizabeth McQuerry:

Yeah, I think that that’s really what our respondents were saying, that we’re into this. It is not new, right? We’ve had faster payments for almost six years now here in the US. Here at Glenbrook, we certainly think of is also a faster payment system, along with RTP. They’re different, but they perform a faster payment function. And respondents were sort of in, the last time we did the survey in 2021, were, if you will, waiting for FedNow, or what is today called FedNow. But now we know when that’s happening. We know it’s right around the corner. So the survey has recently closed, and we will soon at the Nacha conference, begin to share the numbers of where we are, or what the industry is saying in terms of where we are. But I think that they were expressing the uncertainties around what would happen.

We know now that we are going to have three major systems. We know that they are not going to interoperate with each other. That wasn’t clear a couple of years ago. And honestly, we didn’t necessarily get the answer that I and others were looking for. We wanted more interplay between these systems, so some sort of connectivity or exchange interoperability of the multiple systems that we have, because there are other really good options out there, not just Zelle, not RTP or FedNow. Consumers have plenty of options, but now we do have clarity. And clarity and certainty are very valuable in the market. So I think we’re on much more solid ground than we were,, and I’m hoping those numbers will reflect that and that we can move forward knowing where we are and all the remains to be done. And we are a great example of the journey that this is right, particularly systems which are dynamic and competitive as our own market.

Yvette Bohanan:

Absolutely. And it really drives on the point, every country’s adoption strategy, success, displacement, or shift of volume, all of that is still very, very country specific. So we have this bright star of international cross-border payments and the promise of a better global space, and we have all of the idiosyncrasies and things and characteristics that make each country very unique still, no matter what system you’re talking about, that have to be dealt with. So it is a big journey.

Elizabeth McQuerry:

Absolutely. And I think back… You just referred to how same day ACH is hotter than ever, right? And same day, adding new functionality to a long, what, fifties more year old system? And it’s connected to everybody and everything. We all touch ACH, or ACH touches us in some way. Weekly at least, right? And that is part of the fabric of how we pay in the US.

Yvette Bohanan:

Absolutely. Yeah.

Elizabeth McQuerry:

That’s the aspiration of every payment system.

Yvette Bohanan:

Yeah. And ubiquity, interoperability, just being available, being there and being trusted, that’s table stakes for the systems, and we have systems that are that way today, and even a check, even the humble check. And you know it’s going to get there. I don’t have to worry about or care who you’re banking with or whatever. I can drop that in the mail, and I know it’s going to get profited.

Elizabeth McQuerry:

Actually, I wouldn’t recommend you put that check in the mail right now. Lots of challenges with mail on the… But if you could electronify that paper check, you’ll be in great shape.

Yvette Bohanan:

But just to be clear, that’s not a problem with the checking system, per se. That’s a different system.

Elizabeth McQuerry:

For sure. For sure.

Yvette Bohanan:

So let me don’t talk about here. All right. So no checks in the mail. I’ll use my mobile capture and digitization mechanisms. Thank you so much, Joanna, Cici, Elizabeth. It is always a pleasure to get together and talk with you. I am really looking forward to putting this series together on Fast Payment Systems, A Particular Focus on Pix in the next two episodes. So thanks for sharing your insights with our listeners. Really appreciate it.

Elizabeth McQuerry:

It was a pleasure to be here, and thanks for the great conversation.

Joanna Wisniecka:

Great questions, Yvette. Thank you.

Yvette Bohanan:

So yes, if you’ve enjoyed this conversation and it’s given you some food for thought, we are just teeing up our next episode in which we be talking about Brazil’s core processors, the companies that drive the systems that help the banks process payments. And we’ll be talking with a processor that has firsthand experience in helping banks in Brazil implement Pix, and is setting up operations to help banks in the US do the same with our fast payment networks. It’ll be very interesting conversation. I hope you can join us. So thank you for listening. If you’d like to learn more about Fast Payment Systems, please check out our other podcasts on this topic, our on-demand module on fast payments in the US, or one of our upcoming education workshops. And if you enjoy Payments on Fire, someone else might too, so please feel free to share this podcast with your favorite social media outlet. Until next time, keep up the good work. Bye for now.

If you enjoy Payments on Fire, someone else might too, so please feel free to share this podcast on your favorite social media outlet. Payments on Fire is a production of Glenbrook Partners. Glenbrook is a leading global consulting and education firm to the payments industry. Learn more and connect with us by visiting our website at glenbrook.com. All opinions expressed on our podcast are those of our hosts and guests. While companies featured or mentioned on our show may be clients of Glenbrook, Glenbrook receives no compensation for podcasts. No mention of any company or specific offering should be construed as an endorsement of that company’s products or services.