The end of the year is time in which friends and family come together to celebrate holidays, and more often than not, to sit together around the table and eat giant feasts! Yet as 2016 draws to a close, this is also an appropriate time to reflect on the changes we experienced in the payments world and to consider what is on the horizon in 2017.
This past year certainly proved to be an eventful one in ACH—the ability to send and settle credits in one day became a reality in September after months and months of planning and education by financial institutions, processors, regional payment associations, and the ACH Operators. Recently, NACHA released the statistics on the first month of Same Day ACH traffic and we learned that Originators sent approximately 4 million payments worth almost 5 billion dollars as Same Day ACH Credits! Direct Deposit via ACH constituted about half of the volume; however, almost 60% of the value came from business-to-business credits. What sort of traffic and volume will 2017 bring? The implementation of Phase Two will allow for Same Day ACH Debits, and given that debits make up approximately 60% of network traffic, Originators will likely find many more uses for same day processing and settlement.
While the developments within ACH are significant, we should not lose sight of progress in other areas of the payments industry and what the New Year will bring. The Federal Reserve is expected to release its 2016 Federal Reserve Payments Study and this should shed light on how American businesses and consumers are adapting to new payment technologies. Fintech, particularly blockchain applications and APIs, will continue to drive much of the innovation and provide hot topics for conversation about the future of payments in a digital world. More immediately, the Faster Payments Task Force will release its report in 2017 on the 19 proposals submitted for evaluation as faster payment solutions. This report is not intended to select one “winner” out of many; instead, it will simply assess the proposals’ capabilities to meet the 36 effectiveness criteria established by the task force. Faster payments are coming—that much is certain—but what remains to be seen is what sort of solutions will be adopted by financial institutions and consumers.
Unfortunately, we do not have a crystal ball that lets us peer into the future. But EPCOR does have a dedicated staff working to understand the evolving payments industry and educate all of the members about what those changes mean to institutions large and small. Be on the lookout for faster payments to be the focus for much of our education in 2017!