An Executive Interview with Michael Bellacosa, Head of Global Payments Product Management Group, BNY Mellon - by Helen Sanders, Editor
There is a lot of industry discussion about instant, or real-time payments: what’s the background to these discussions?
Discussions on instant payments seem to have happened quite quickly, but in reality, other than advances in cheque electronification, there have not been any fundamental changes to the payments industry in the United States since ACH payments in the 1970s. Three major developments have converged to create the current focus on real-time payments. First, consumer expectations have evolved rapidly in recent years, as we all become more accustomed to real-time, on-demand digital experiences. Second, evolving consumer expectations have been accompanied by regulatory and economic views that there needs to be greater transparency and efficiency in the payments industry to drive innovation and growth. Third, financial technology or ‘fintech’ companies are becoming more active and influential, further heightening consumer and bank awareness of the opportunities that exist.
These three developments are interrelated, and if banks and clearing systems want to drive the payments agenda, it’s increasingly important for them to align their services with evolving customer expectations. Real-time payments are a key part of this realignment. So far, we have seen a variety of different initiatives emerging. The Federal Reserve Faster Payments Task Force is a key one, demonstrating the government’s commitment to a new payments model. This task force will be offering a variety of proposals, and it will be interesting to see where these lead. As that initiative moves forward, other operators in the payments space are also considering what can be achieved singly or in collaboration with others.