It sometimes feels like going to conferences is a little heralding the start of a season, or something you can set your watch by, as certain conferences occupy the same slot in the calendar every year. Nacha Smarter Faster Payments is one of those - it must be the end of April if I’m here!

This year, the event returned to New Orleans after 10 years. Like many cities you return to after a long break, somethings have changed, while others are very familiar. It can be very disconcerting at times, as it’s also usually the “usual suspects” we’re meeting! This year felt slightly smaller though this may be the layout – as with all these events, the halls themselves are vast, as are the distances between meeting rooms. But still one of my favourite events, even if I end up doing my steps before lunch!

I spoke on the topic of Demystifying Payment Hubs on the final day, and it was a well attended session, despite the numerous parties in the self-proclaimed Party City the night before. The number of questions afterwards was a clear indication that there is an uptick in interest in payments modernization. As I pointed out in my session, almost half of US banks are looking modernize at least one payment rail – I’d therefore have been worried if people weren’t asking questions.

There were some fascinating insights from our discussions. While we are debriefing clients in more detail, a few are worth sharing here.

ACH

There was a strong belief that most banks were about to embark on significant plans to modernize their ACH systems. This was very clearly reflected in our survey data, which showed 44% of US banks were planning to do so in the next 18 months. What is less clear is the reason why. While we have hypotheses, the attendees didn’t seem to agree upon a clear mandate for change. Many ideas were discussed – including the alleged demise of a well-known solution. Yet we’ve been discussing it’s demise for the last 10 years, and nothing obvious has changed, so it would seem unlikely. It may be as simple as several vendors launching new products, and others aiming to for larger banks, with the activity creating “noise” within the market. Whether that noise translates into activity however remains to be seen!

FedWire

Shockingly, it would seem that some banks were still taken by surprise by the deadline, let alone the subsequent postponement until July. And everyone told us that their inside source said that the deadline was immovable. Other than the other 50% who were adamant that their inside source said it was definitely going to be yet another delay. While I understand that Nacha is an ACH conference, I do wonder if there is a trick being missed to not make it a broader church of payments. Its also worth noting how many banks refer to the new format as the new Fed format, not ISO 20022. There was a definite lack of understanding of what the implications are.

Real-time Payments

The conference has been highlighting real-time payments for years (I believe I was the very first 18 years go!), and so there has been great content for many years. Yet while there is growth in both usage and joining the schemes, the US still lags comparable countries and economies by a significant margin. I think this reinforces the opportunity for Nacha to be broader than they are. While there are many great rail specific forums, there aren’t (as far as I am aware!) that foster more strategic thinking, and where they take a more holistic view of payments. Customers don’t think only about one rail, so why does the industry? That in turn may help the uptake of real-time payments.

See you in San Diego...at the end of April next year!