As countries around the world are implementing real-time payment systems, the focus has now shifted to developing the best cross-border payments solutions. ACI Worldwide, a global provider of real-time payments solutions, believes that the launch of FedNow in the US will play a significant role in advancing the country’s interests in this race. Bridget Hall, Leader of Real-Time Payments, Americas, at ACI Worldwide, discussed how cross-border payments have the potential to revolutionize transactions and reduce costs for individuals and businesses.
Regarding the market reaction to the launch of FedNow, Hall mentioned that the response has been positive. Financial institutions are eager to integrate with FedNow, and businesses across various industries are interested in leveraging the instant payment service for their operations. This showcases the growing importance of instant payments in the US.
When asked about the timeframe to see significant payment volumes on FedNow, Hall stated that based on ACI’s research, there is anticipated to be a four-fold increase in US real-time payment transactions within the next few years, including volume from FedNow. She also highlighted the smooth launch of FedNow, emphasizing its significance in advancing the US payment landscape.
While FedNow is currently a domestic payment system, Hall acknowledged that there are discussions about its extension for cross-border payments. Although cross-border functionalities are not part of FedNow’s initial launch capabilities, ACI’s team is exploring ways to facilitate cross-border real-time payments to address the evolving needs of serving multiple countries’ financial ecosystems simultaneously.
When asked about the region that might establish a cross-border payments ecosystem with real-time payments first, Hall mentioned that Asia is strategically positioned with the use of the Asian Payment Network. India, with its real-time payment system called UPI, has also worked with other countries to enable the use of UPI for cross-border transactions. Additionally, the US and Europe are looking at cross-border payment capabilities through conversations between TCH, EBA, and SWIFT.
Hall discussed potential consumer and business-to-business cross-border use cases for FedNow. Consumer cross-border payments, such as sending money to family or friends in another country, could be improved by making the process more seamless and transparent. Another example is embedding a transaction within social media, establishing a real-time payment transaction between merchants and consumers. On the business-to-business front, real-time payments have the potential to expedite transactions between US companies and their international suppliers.
Hall mentioned that the launch of FedNow in the US has generated significant interest among other countries. The US’s role in cross-border transactions, especially remittances, further amplifies this interest. The potential global expansion of FedNow and its ability to support cross-border payments are gaining momentum, as businesses engaged in international trade recognize the significance of cross-border transactions.
In conclusion, the launch of FedNow in the US has sparked interest and excitement in the financial industry. With the potential for cross-border capabilities and the growing importance of instant payments, the race to develop the best cross-border payments solutions is well underway.
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