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Banks allocate significant resources to fighting fraud, both in prevention and in maintaining reserves for potential losses. No matter how good the performance is, fraud losses remain a burden on their balance sheets. Instnt, under the leadership of CEO and founder Sunil Madhu, has been at the forefront of developing innovative ways to combat bank fraud. Madhu recently sat down with Tracy Kitten, Director of Fraud and Security at Javelin Strategy & Research, in a recent PaymentsJournal podcast to talk about the kind of fraud he’s seeing now, and what banks can do to stop it. A Fraud for Each Silo Banks have traditionally had to address various types of fraud in different areas of their operations. For example, first-party and stolen ID fraud are common in lending, while checking and savings accounts are vulnerable to fake ID fraud. Credit cards face challenges with e-commerce fraud, and the bank itself may encounter ACH and chargeback reversal fraud.  To fight this, each line of business puts together its own toolbox pattern. To stop the fraud risk while keeping compliant, each line of business assembles half a dozen vendor tools and data providers from the industry, which they then implement in an orchestration waterfall.  Regardless of how good each of those tools are, the overall toolbox performance is generally very poor. Banks constantly have to retool that toolbox to keep abreast of the different types of fraud. This is how the businesses have been operating for a very long time—in their own operational silos.  Too many financial institutions have come to see fraud as just part of doing business.  “But it's not just about the fraud loss,” Kitten said. “It's also about are you funding a terrorist organization? Is there something else behind some of these transactions that you as a financial services entity should be doing the due diligence on?  It's not going to be long, whether it's in the decision or the Court of public decision or something legislative that comes down before financial institutions are going to be held accountable.” Challenges from Changing Technology Fraudsters are increasingly leveraging automation to expand their reach and impact. For instance, a scammer might use a collection of stolen or fake IDs to target numerous businesses, hoping to breach the security of at least one or two. The financial industry is particularly susceptible to synthetic ID fraud, where fraudsters use fake IDs to open up new accounts and evade detection. In cases of third-party fraud, perpetrators can easily purchase identities of legitimate taxpayers online for minimal cost, bypassing a financial institution’s verification processes.  Within the lending industry, first-party fraud or credit defaults are significant concerns. Compliance regulations like Basel III require financial institutions maintain capital reserves to offset losses from first-party fraud. The requirement ties up capital that could otherwise be deployed for productive purposes within the institution. “This is very expensive and inefficient use of resources of the institution, and we're not talking, but small change here,” said Madhu. “We're talking about hundreds of million or even billions of dollars in terms of first-party fraud loss. If you add the cost of compliance on the back of that, it's really a terrible cost in terms of not only expenses, but resources allocated in tools they have to acquire and manage.” The traditional way to stop first-party fraud involves approving the individual for the loan and then monitoring whether they make the initial payment. Typically, a fraudster will fail to make any payments, especially the first one, as they intend to abscond with the money. In contrast, a legitimate borrower would have initiated payment attempts. This type of fraud is commonly referred to as no-pay fraud. According to the Federal Reserve, no-pay first-party fraud takes 10% to 25% of every dollar receivable ...

The ATM industry has undergone a dynamic shift that has taken automated teller machines far beyond cash dispensation. As the number of bank branches has declined, both banks and consumers expect ATMs to provide a wide array of services that were once only offered at a teller’s counter. In response to the increased demand for ATM services, financial services company NCR recently split into two separate entities—NCR Atleos and NCR Voyix—with NCR Atleos overseeing the company’s substantial ATM ecosystem. Shortly thereafter, NCR Atleos reached an agreement with BHMI to resell the Concourse Financial Software Suite® as part of its software portfolio. In a recent PaymentsJournal podcast, Robert Johnston, Product Marketing Director at NCR Atleos, Casey Scheer, Director of Marketing at BHMI, and Elisa Tavilla, Director of Debit at Javelin Strategy & Research, discussed the NCR Atleos/BHMI partnership and its impact on a shifting ATM landscape. Mirroring Functionality In addition to the services of a brick-and-mortar bank, consumers increasingly expect ATMs to mirror the functionality of the digital banking environment. Some banks have reached the point where they can replicate their entire mobile banking experience on their ATMs. “Even as payment and banking behaviors have shifted, ATMs have stayed relevant,” Tavilla said. “About three-quarters of respondents in Javelin’s annual North American Payments Insights Survey said that ease of finding and accessing an ATM significantly affects their satisfaction with their bank.” Meeting these rising expectations is easier said than done—it requires creating connectivity to systems beyond conventional ATM rails. For example, to give consumers access to all their accounts, the ATM must connect to a bank’s core banking system. Platforms like Authentic from NCR Atleos can serve as the hub that connects core banking systems, other services within the bank, and even third-party services provided by companies like fintechs. The Front-End Authentic is part of NCR Atleos’ ATM Management Platform (AMP) which offers a cloud-based suite of ATM management modules that includes the entire software stack required to operate an ATM. This includes the customer-facing application within the ATM, as well as cash management, device management, and security management software. A cloud-based solution, Authentic gives banks a high-performance transaction processing and payment settlement solution that’s scalable. It’s also agile, with productivity tools which allow for rapid adoption of new services and products. “Many of the traditional companies used to embed an ATM terminal handler within their product and now they’re stepping back from that,” Johnston said. “The Authentic platform provides one that's not just a replacement; it’s a completely new level of technology for that function. We've also launched a new card management system based on Authentic that gets us closer to an end-to-end processing environment.” The Back Office The functionality of a platform like Authentic is substantially enhanced when paired with a back office processing software solution like BHMI’s Concourse Financial Software Suite. In this model, once a transaction is authorized by a consumer, it flows into Authentic for authorization. Once authorized, the transaction is immediately loaded into the Concourse transaction repository, along with any corresponding data from card networks like Visa and Mastercard. Concourse operates on a continuous-processing architecture, so it begins processing as soon as this data arrives in the system. This includes automatic reconciliation of transactions from disparate data sources, the assessment of fees and commissions based on transaction data, and the creation of settlement distributions and funds movement instructions. Additionally, it manages the entire workflow for chargebacks and disputes.  To give an example,

With no relief from inflation in sight, consumers are bracing for an expensive holiday shopping season, especially with only 27 days between Thanksgiving and Christmas this year. To stretch their budgets, consumers will leverage every available method, and merchants’ loyalty programs can save customers money while strengthening brand relationships. However, another key pillar of a merchant’s successful holiday strategy is its gift card program. In a recent PaymentsJournal podcast, Tom Niedbalski, Vice President, Global Sales and Partnerships at Fiserv, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the convergence of gift cards, loyalty programs, and technology—and the opportunities this creates for merchants in the upcoming holiday season. Shopping Strategies Tighter budgets have driven consumers to shop earlier and spread out their purchases, a trend that retailers have encouraged with events like Prime Day. Consumers are also expected to take advantage of upcoming events like Black Friday and Cyber Monday. Loyalty programs greatly influence where consumers shop during the holidays, as savvy customers use them to bolster their holiday spending. That’s why major retailers like Target, Walmart, and Amazon continuously drive engagement with their loyalty programs; it directly encourages consumers to participate in sales and promotions. Gift cards should also be integrated into a merchant’s loyalty program. For example, a customer might receive a gift card for spending a certain amount or redeeming a specific number of reward points. However, a merchant’s gift card program takes on added importance during the holiday season. “Gift cards have become the most popular gift,” Hirschfield said. “Roughly 63% of consumers say they will buy a gift card this holiday season, and 16% expect to spend more than last year. A loyalty program that is tied in with gift cards not only helps buyers purchase the items they need, but it’s also an inducement to purchase gift cards for others during the holiday season and beyond.” Omnichannel Experience Brands need to meet customers where they shop and pay, so merchants must invest significant time ensuring their mobile experience includes payments, loyalty, and gift cards in an omnichannel wallet. “The digital experience not only allows the brand to interact with its consumers, but consumers can see the value of interacting with the brand,” Niedbalski said. “For years, I've been saying that stored value is the vehicle that drives transactions out of interactions and interactions out of transactions. It's a two-way street.” A digital wallet can also serve as the platform for merchants to offer innovative loyalty programs, such as product-specific promotions. For instance, if a customer buys a particular product, they might receive a gift card from the manufacturer to buy related accessories. Another growing trend is self-use, and consumers who use gift cards for themselves are heavily influenced by loyalty programs. “It creates a cycle of promotions, and it all links back to the phone,” Hirschfield said. “The mobile phone holds a customer’s stored value account and their payment methods. The physical gift card is still the top seller, but nearly a third of consumers will redeem a gift card in a mobile app. That number is only going to grow.” Personalization vs. Privacy Gift card personalization is a powerful way to connect with different demographics. With many faiths celebrating during the holidays, it’s important for merchants to cater to the diversity of their customer base. Some brands have started offering print-on-demand gift cards. In the past decade, there has been a shift from traditional Christmas cards to postcards featuring personal images. This same concept is now applied to gift cards, allowing consumers to upload a family photo and include it with their gift. “It connects with consumers,

Access to emergency funds provides peace of mind, especially when many people find themselves scrambling to cover expenses. Given the needs of younger consumers, liquidity and cash flow issues are becoming increasingly important for financial institutions to address.   Changing regulations offer financial institutions an opportunity to rethink how they are meeting these customer needs through offerings like overdraft protection and small-dollar lending. In a recent PaymentsJournal podcast, Jeff Burton, Vice President and General Manager at Fiserv, spoke with Brian Riley, Co-Head of Payments at Javelin Strategy & Research, about liquidity products that can keep these customers in the fold. Liquidity Affects Everyone  In the past two years, just over half of consumers have needed access to short-term emergency funds to pay their bills. While lower-income consumers are more likely to need funds, nearly half those earning between $100,000 and $149,000 have also needed short-term emergency funds. It's not a question of wealth, but of available cash flow. For customers who maintain deposit relationships with financial institutions, liquidity is a key driver of success. Half of all deposit customers will need liquidity assistance at some point.  “Loyalty can be earned by how organizations bring these liquidity products to market,” Burton said. “Alternatives are good, options are good, but the key is addressing the client need.”  Consumers can't necessarily predict if or when they'll have a liquidity crunch. When a crisis arises, they want certainty in resolving the issue, to address the problem immediately, and assurance it won’t hurt them long-term. Having a suite of easily accessible solutions can provide peace of mind to customers choosing among institutions with otherwise similar product offerings.   Remember, cash flow is not necessarily linked directly to a customer’s net worth. While products addressing short-term cash flow needs can particularly appeal to younger or less wealthy customers, they offer real value across all generations and customer segments.  “Being able to get them through that without a long-term commitment on a credit card debt or a personal loan forms a good bridge with the customer that will have a lasting relationship,” said Riley.  Overdraft Alternatives More than a third of account holders had an overdraft in their primary checking account in the past year. Among Gen Z, that number rises to more than half. These customers are precisely the ones institutions need to engage to grow deposits over the long term. To capitalize on this segment, many banks are offering smart alternatives to overdraft protection, providing value beyond replacing revenue from overdraft fees.  “There's a lot on the table right now relative to pending overdraft regulation, specifically for the large institutions,” said Burton. “They've cut back on the amount of items that they can charge for on a daily basis. Programs like fee forgiveness give clients a specific period of time where they can effectively cover the overdraft. Those types of changes were all positive for the industry, but what the additional regulation will do is unclear. If they move forward with the benchmark fees being proposed, organizations would likely constrict the amount of credit they make available through the overdraft program.” With about 30% of customers leveraging overdraft service, demand is not going away. It's important for alternatives to exist within the bank’s framework, not just outside it. Some clients needing overdraft protection don’t repay by choice, while others don’t repay out of necessity. By offering alternatives, banks can address both segments. Clients trying to protect their income can manage fees accordingly. For those struggling with their budget, an extended repayment period provides additional time. This transparency allows consumers to opt in and choose when to use the product. 

The upcoming conversion to ISO 20022 presents both challenges and opportunities for banks. It allows them to drive potential efficiencies by redesigning operational processes around Swift messaging. However, there is also the challenge of data ingestion; banks will need to ensure every tech platform in their stack, particularly reconciliation and reporting tools, can effectively handle ISO 20022 messaging. In a recent PaymentsJournal podcast, Nick Botha, Payments Sector Lead at AutoRek, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, explored where things stand with ISO 20022 conversion, and how workarounds may cause banks more problems than they solve. What ISO 20022 Promises ISO 20022 introduces a single standard approach to facilitate communication interoperability between financial institutions, their market infrastructures, and their end users. The deadline for both corporate bodies and financial institutions to prepare their systems is November 2025.  As the adoption date approaches, banks are relying on Swift’s expertise and resources to ensure the transparency and validity of their transactions. Swift is preparing to introduce a messaging system with comprehensive data insights for many of the 11,000 participating firms. The goal is to create standardization across the market as the transition to a more centralized payments economy unfolds globally.  ISO 20022 messaging is designed to provide  detailed information on recipients and participants in any payment. It aims to manage data processes and analysis more effectively, potentially reducing some of the cost associated with payments, allowing firms to achieve economies of scale. However, these economies of scale can sometimes be illusory.  Where Do Things Stand Now? Organizations are currently in a transitional period where many have adopted the ISO 20022 standards, but others are lagging behind. Migrating systems can be costly, and not all organizations have the resources and funds available to make the switch immediately. During this period, conflicts may arise in messaging when advanced firms transact with those that are still catching up, leading to some friction.  Significant resources will need to be allocated to this project to ensure interoperability not only with counterparts in the wider economy but also in within the organizations’ tech stack and IT communication systems. The move to ISO 20022 is already somewhat overdue, but for companies that have yet to make the switch, it’s not too late.   “A lot of workshopping has been happening across different geographies globally within the Swift network,” said Botha. “If you haven't done it yet, understand how it will apply to the strategic direction of cross-border payments for your business, especially if you are in the Swift network. If you're not in that network, it's still worth adopting the principles behind how this can work, because those 11,000 institutions are working with another 50,000 or 100,000 institutions that aren't a part of that network too.” Diseconomies of Scale As banks and other financial institutions strive to keep operational costs down, they encounter a paradox. In the payments space, increasing transactional volume is typically seen as a path to profitability. But, producing additional volume comes with its own costs, such as expanding infrastructure, providing internal support, and implementing fraud reconciliation software. The cost of adding transactional volume increases alongside the revenues generated by those transactions. Typically, the margins per transaction don't increase over time. “We've had some clients speak to us about how there's actually a diseconomy of scale at some point,” said Botha. “We've seen some firms stop acquiring new clients because they've hit that point.”  The best way to counteract this effect is by creating operational efficiencies and reducing the operational cost per transaction on a ...

Open banking has come to encompass so much that it can be hard to define. At its heart, open banking is about opening consumer financial data—once the sole domain of banks—to third-party service providers that manage the data using APIs. In a recent PaymentsJournal podcast, Vladimir Jovanovic, VP of Innovation at Velera, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed open banking’s evolving regulatory framework, its benefits for banks and credit unions, and its accelerating adoption in the United States. A Changing Perspective Most consumers don’t understand the infrastructure or the technological innovations driving open banking, but they are fully aware of its benefits. “They understand it in terms of access to third-party services, streamlined onboarding processes, and embedded finance and payments,” Wester said. “They may not know the umbrella term, but they have adopted open banking, and they’ve come to expect it. Whether they know it or not, open banking has affected the way consumers view banking and financial services.” The days of screen scraping, a method third-party providers used to access financial data, are over. Now platforms like Plaid and MX are, in many instances, required to use structured APIs to pull consumer financial data back. Banks and other payment ecosystem participants  are joining with other providers of financial services to participate in consortiums like the Financial Data Exchange (FDX). The members of the FDX consortium work together to standardize the APIs that enable data exchange between participants. Concerted efforts like the FDX will be a principal driver for U.S. open banking adoption in the years ahead. The Regulatory Environment In other countries, governments have mandated the creation of open banking standards. Though there are many regulatory bodies in the U.S. banking space, such as the FDIC, there isn’t likely to be a government mandate any time soon for U.S. open banking adoption. However, the Consumer Financial Protection Bureau is emerging as the regulatory agency that could help shape open banking requirements in the financial services market. “The CFPB is going to be heavily involved because banks and credit unions are opening up protected consumer financial data to third parties,” Jovanovic said. “The CFPB is going to scrutinize that process and make sure any approach is aligned, centralized, and regulated properly, and centered around consumer rights and protections related to financial data sharing.” To expand that reach, the CFPB proposed Rule 1033, which addresses personal financial data rights from a consumer standpoint. Though Rule 1033 has yet to be approved, banks and credit unions might have to make significant adjustments to their data management practices, privacy policies and security practices to comply with the new regulation. In data management, organizations will have to determine the appropriate IT infrastructure to support consumer permissioned data sharing. When consumers give a third party access to their financial data, institutions must have the infrastructure to accept and standardize data sharing across different participants. Banks and credit unions will also have to determine which privacy policies and security practices should be in place to prevent breaches and unauthorized access. “Open banking might give financial institutions the chance to broaden their products and services, but it presents an opportunity for fraudsters as well,” Jovanovic said. “Banks and credit unions need to understand how they can deploy the right tools and processes to ensure the consumer has consented and any emerging fraud schemes are managed effectively.” A Marathon, Not a Sprint Many banks and credit unions might be tempted to trust the technological aspects of open banking to a third-party partner. However, they must still fully understand the process because the institution is ult...

After companies have spent years struggling to build their own payments systems, the era of Payments 3.0 has arrived. This new domain is driven by technological innovators who take a product-centric approach to creating holistic payment systems from the ground up. In a recent PaymentsJournal podcast, Danny Shader, CEO of PayNearMe, spoke with Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, about the virtuous cycle of innovation that has driven the payments market forward. They looked at how payment technology will continue to evolve, focusing on enhancing user experiences, adopting artificial intelligence, and empowering every stakeholder in the ecosystem.   The Prehistory of Electronic Payments At the onset of electronic payments, card networks emerged and left businesses to figure out implementations on their own. Clients had to work with multiple vendors to put together a holistic system. This was Payments 1.0.  In Payments 2.0, vendors consolidated various technologies under one roof, allowing clients to work with a single company. However, the disparate underlying technologies often resulted in service issues, driving up costs or reducing payment acceptance rates. Payments 3.0 is about integrating these technologies into a holistic system, eliminating cracks, and allowing consumers to move seamlessly through the payment experience. “The classic Payments 3.0 experience is Uber, where you don't even realize that you're making a payment,” said Shader. “If you think about your local utility payment, it's probably horrific. It's about as Payments 1.0 or Payments 2.0 as you can get.” Miller encountered exactly that during a recent utility payment. “They would not accept a credit card, but they will accept PayPal. I can use a credit card in PayPal, so it's clearly an experience that's disjointed; one that they don't have a clear vision on what the technology is that they're using or how it fits into an overall payment strategy. There's a gap for them as much as for me, he said.” Payments 3.0 is technology-forward, with technology embedded in and even driving actual business processes. The word holistic is important. It's not just technology that can be easily integrated; it supports and improves the entire payment experience.  Bringing AI into the Mix There's an analogy between what's happening with artificial intelligence now and the dot-com era, noted Shader. Back then, people talked about internet companies, and any company with a dot-com at the end of its name suddenly became more valuable. Today, nobody would describe a business as an internet company; everything is an internet company. “Similarly, there are AI companies today, but AI should be infused into what all tech companies provide,” said Shader. “An observation we've made is that we shouldn't build AI into our own help desk. We should rely on the innovation that Zendesk will build into their product. Since we provide the payments roadmap for our clients, it’s our obligation to incorporate AI into the payment experience that we deliver for our clients.”  What can be done with data today is very different from what will be possible with AI in the future. Consider a lender on the last Friday of the month, a peak period with many transactions happening rapidly, who wants to know how they’re doing.First, it’s essential to have a complete data set to compare with previous periods. Additionally, it’s now possible to anonymize the data and compare it against others in the industry. This comparison can reveal whether there's a broader trend affecting everyone or if there is an issue specific to one organization. “That's the kind of advantage that we have by sitting in the middle of so many clients in the same industry and helping them manage their experiences,” said Shader.  Becoming an Innovator The greatest expense in payments comes from managing exceptions. For example,

The role of the Chief Financial Officer has evolved significantly in recent years, with finance offices increasingly tasked with driving business growth. As technology requirements and banking relationships grow more complex, CFOs often find it challenging to maintain the cash visibility necessary to optimize working capital and make informed strategic decisions. In a recent PaymentsJournal podcast, Leo Gil, VP of Product at Bottomline, and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed the expanding role of the CFO and the ways finance offices can use automation to drive change in organizations. Profound Importance Visibility into an organization’s consolidated cash position is important, especially in the face of macroeconomic headwinds like interest rate fluctuations, market conditions, and supply chain disruptions. The CFO’s office holds primary responsibility for cash management and visibility, and as the importance of these aspects has elevated, the strategic role of the finance office has been amplified. “CFOs these days are in a unique position,” Bodine said. “They know the financial elements of the business better than anyone, but they have also become key strategic contributors in an organization.” The finance office works to maximize returns by reducing interest expenses and borrowing costs. It also allocates funds to investment accounts that drive better growth and profitability. Over the past few years, finance offices have had to simplify their operations to get a better return on investment, especially from technology. Companies have had mixed results in those endeavors, and the size of the organization isn’t always the determining factor. Some small companies have full cash visibility and make appropriate, strategic investments. Some larger companies lag because they have too many disparate systems and excess complexity. Unfortunately, many companies still rely on manual processes. They might log into multiple banking portals, extract the data, and combine it all into a spreadsheet. “Technology can mitigate manual processing, but issues arise when companies take a big-bang approach,” Gil said. “They allocate substantial capital and resources to implement sweeping changes in an organization, hoping for an immediate result. They're not willing to go through a long-term revamp or implementation to see results.” Complex Banking Relationships Some organizations have sought to solve their financial issues by increasing the number of banks they partner with. Other companies diversified their banking relationships in response to recent banking failures.   A company that previously managed three banks may now have expanded to 10 or more banking relationships, adding significant complexity. This expansion can make it challenging for the finance office to get a consolidated view of its cash position. As the number of banking relationships increases, the importance of automation technology becomes even more pronounced. Businesses that rely on manual processes to manage multiple bank relationships will inevitably face the burden of constant financial aggregation in their daily operations. “Aggregating bank statements might take two hours a day, then they must generate cash positions and cash forecasts, which takes three hours,” Gil said. “Then they need to generate liquidity forecasts and reconciliations, which takes another two hours. Before you know it, the day is over.” Manual processes are inherently inefficient, and when data streams originate from multiple sources, finance offices struggle to manage daily operations effectively. If the finance team’s entire focus is consumed by operational tasks, they will never evolve into the strategic leaders that companies need. Automated Consolidation Organizations should have a fully automated, consolidated view of all their cash positions.

The ACH Network is set to surpass 33 billion payments by the end of the year, marking a significant milestone. Consumer Internet-initiated payments are set to surpass 10 billion, a remarkable achievement considering the payment method was created just 20 years ago. In a recent PaymentsJournal podcast, Michael Herd, Executive Vice President of ACH Network Administration at Nacha, and Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research, discussed this success story and the future of the protocol in a crowded payments landscape. The State of ACH Instant payments rails like FedNow and RTP have received significant attention over the past year, but this hasn’t slowed ACH’s momentum. In Q2 2024, ACH payment volume increased by over 6% year-over-year, with an average daily payment volume reaching 132 million payments. The total value of payments flowing through the ACH Network topped $42 trillion in just the first half of the year. “There are a few areas that are driving overall ACH volume growth,” Herd said. “The first is B2B payments, which are growing by more than 10% per year. That's been a long-standing trend for the last seven or eight years. While there are still pockets of check use in industries like healthcare and higher education, overall check volume seems to be declining and the B2B space is moving towards ACH.” ACH is also thriving in consumer single and recurring bill payments, as well as account transfers. This volume exceeded 2.6 billion in Q2 2024, up 8.3% year-over-year. “With increasing automation of business processes and the digitization of payments, both businesses and consumers are looking for greater efficiency,” Tavilla said. “It comes as no surprise that there is now record-breaking volume being transacted over ACH. There's more data that is available with digital payments and it also helps businesses improve cash flow.” However, there was a recent slowdown in healthcare claim ACH payments, likely due to a large-scale ransomware attack on the healthcare sector. A major processor in healthcare payments was unable to process claims for a period, leading to a 2.8% year-over-year increase in healthcare claim payment volume in Q2. Same Day ACH There's a strong demand for faster payment settlement, and Same Day ACH has a formidable use case in both consumer and business applications. For consumers, that includes transfers to non-DDA accounts like digital wallets and brokerage accounts. Same Day ACH supports the two-way flow of funds in B2B, C2B and B2C payments, allowing for both debit pull transactions and credit push payments. This contrasts with many real-time payment networks, which are currently credit push only. “To say Same Day ACH has a key role is an understatement,” Herd said. “Same Day ACH volume in 2024 is up 47% from last year, including 566 million payments in the first half of the year. April was a banner month, maybe because it was tax month, but there were over 100 million Same Day ACH payments in April. In all likelihood, Same Day ACH payments will exceed a billion this year for the first time ever.” The payment landscape is trending toward digital and real-time payments. Consumers increasingly demand faster payment methods, and Same Day ACH is a key part of that trend. A driving factor in the growth of Same Day ACH payments is the ACH Network’s firm establishment. ACH is ubiquitous, and businesses and consumers are familiar with it. Unlike some of the newer real-time payment rails, virtually all financial institutions are connected to ACH, facilitating money movement regardless of the customer’s bank. “If you're a business and you haven't dipped your toe in the faster payments waters yet, start with what you're familiar with, which is likely to be ACH,” Herd said. “Same Day ACH is just a faster form of what you already know. It's the same system and the same processes. You will have to adapt to the faster settlement of funds,

Cards made from paper and other sustainable materials continue to gain in popularity. In addition to being ecofriendly, paper cards are more cost-effective and perfect for single-use purposes, such as gift cards. To explore the future of sustainable cards, Peggy O’Leary, EVP, Prepaid and Digital Solutions for CPI, spoke with Elisa Tavilla, Director of Debit Payments for Javelin Strategy & Research, on a recent PaymentsJournal podcast. They discussed the flexibility available to consumers and providers with sustainable cards and looked at where the industry might be headed. Paper Power Sustainable cards are being made from a variety of materials, including paper, wood, recycled PVC and other substrates, as well as recycled plastic. All of these are much easier on the environment than traditional plastic cards. “We're seeing a greater effort toward fostering sustainability and protecting the environment across all industries,” Tavilla said. “For example, in the retail industry, there's been greater attention and efforts toward things like consignment, thrifting, upcycling, focused on zero waste. In the payments industry and financial services, we’ve seen efforts to improve sustainability and help the environment, too.” Single-use type prepaid cards (that is, not reloadable) are ideal for paper. Visa, Mastercard, and American Express gift products have increasingly moved toward paper cards. They are more environmentally friendly than traditional cards, and they don't need to be as durable as credit or debit cards that people use more frequently. Paper cards are also more cost-effective for manufacturers than plastic cards. Sourcing Matters The market has been pushing for assurances that paper products—and even the packaging around the paper products—come from responsibly sourced materials.  “At CPI, we're heavily investing in ensuring our materials are FSC-certified,” O’Leary said, referring to the Forest Stewardship Council, a group whose mission is to promote economically viable management of forests. “We’re making sure that our products have a trackable chain of custody and that our paper products come from responsibly managed forests. Not only are we creating something from a natural product that can break down after use, but the source itself is coming from a more ecofriendly supply chain as well.”  Financial institutions have seen plenty of new investment around environmental, social, and governance (ESG) initiatives, indicating a desire by consumers to minimize their impact on the environment. Many of these customers may not even realize that the plastic cards in their wallet could be replaced by something more ecofriendly. The effort extends to finding partners to ensure that the types of materials used are responsibly sourced as well. That is an important part of CPI’s manufacturing process. “From the ESG perspective, CPI’s approach and strategy are very thorough and well-rounded, whether it's from the cards and the products that they're producing or the sourcing and the supply chain of the material,” Tavilla said. “Consumers are increasingly environmentally conscious of the products that they're using and the providers that they buy from. A Javelin survey asked the key factors that users consider when they apply for a new credit card, and 26% said that having the card being made of sustainable material is an important factor.” Expanding Possibilities Sustainable card manufacturing allows for more than just environmentally friendly transactions. It opens up a new world of design for the cards as well.   “We have come up with innovative ideas such as gift packages that would have lights that lit up or scratch-and-sniff options for the holidays where you could definitely smell the peppermint,” O’Leary said. “When you think about what it takes to be able to deliver that kind of innovation, you need an extensive network of suppliers, partners,