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October 2020 Innovating Payments Executive Summary — Innovating Payments in a COVID-19 World

By Mark Dixon, AAP, APRP, NCP posted 10-23-2020 14:53


As we look toward 2021 business planning, COVID 19—and its ensuing impact on financial institutions and the individuals and businesses they serve — continue to shape the future. Changes in technology and operations that would normally have taken months or years to occur have happened over weeks, as financial institutions have found themselves pivoting to meet the shifting demands brought about by COVID.

With that in mind, the priority around payments strategy increases. Market shifts can create a whirlwind of response, and without guardrails in place, FIs may be left wondering exactly where to turn. Yet, if you align your payments business with your overall bank strategy, you set the stage for what’s to come.

That’s why now’s the time to look holistically at your business and how payments need to shift in support of it. In fact, by integrating new developments such as FinTech partners, faster payments rails, and more, you will be poised to support your institution’s evolution and meet the demands of your customers/members both in today’s new normal and in the far-reaching future.   

Read on to learn which topics may play a role in the evolution of your payments strategy.    


National Cyber Security Awareness Month (NCSAM)

With October marking National Cyber Security Awareness Month, now is a good time to reevalutate your digital fraud prevention solutions. Particularly as COVID-19 drives an uptick in fraud-related schemes, confirming your procedures and processes to address emerging threats will help you thwart attacks.

For example, distributed denial-of-service (DDoS) attacks increased by 151 percent in the first half of 2020 compared to the same period in 2019, reported the Payments Journal. The increase may be attributed in large part to COVID-19 and its impact on cyberthreats and industry web traffic as the article points out:

The precipitous rise in DDoS attacks mirrors the growth in internet traffic seen during the pandemic. Internet use is up between 50% and 70% and streaming media rose more than 12% in the first quarter of 2020.[i] This has meant that attackers of all types, whether serious cybercriminals or bored teenagers stuck at home, have had more screen time to be disruptive.  

Michael Kaczmarek, Vice President of Security Products for Neuster, a global information services and technology company, told Payments Journal

While 2020 has brought radical changes in behavior to consumers and criminals alike, it is naïve to assume that actions of either audience will revert completely to pre-pandemic norms after this crisis passes…Mitigating these increasingly sophisticated DDoS attacks will continue to be a necessary part of doing business online. At a time when many organizations could do with less worry, fully managed services can take the pressure off and ensure critical digital assets are safe and secure.

To help financial institutions mitigate these threats, Nacha’s Payments Innovation Alliance recently launched “COVID-19 Best Fraud Prevention and Cybersecurity Practices,”  which, according to the Sept. 17 press release, was developed by the Cybersecurity Response Project Team as a top 10 list of best practices to help organizations protect themselves against evolving pandemic-related cyberthreats. It can serve as a resource as your institution looks to evaluate its cyber readiness.

Check out my Cyber Watch post this month in the discussion section of the new Innovating Payments site, for additional updates and more.


COVID-19 Impacts

In other Nacha news, the organization announced Sept. 20 that it launched a new campaign that highlights the success of the ACH Network in delivering 120 million Economic Impact Payments (EIPs) to Americans. “However, despite this success,” says Nacha in its recent press release, “there have been mischaracterizations and inaccuracies in news reports and commentary regarding the delivery of government emergency assistance to consumers.”

Nacha’s new campaign intends to “set the record straight,” busting the myths and speculation that arose around the distribution of EIP payments.

Real-Time Payments

The Clearing House’s (TCH’s) RTP® network is also on the move, having recently announced that financial institutions holding 70 percent of U.S. deposit accounts now have access to the network for real-time payments. The network currently reaches 56 percent of U.S. DDAs.

With additional banking technology providers connecting to the RTP network, including Jack Henry & Associates and FIS, even more financial institutions have a technical path to offer real-time payments to their depository institution customers when their institution is ready. 

“In addition to institutions that are already processing on the network, we have over 150 banks and credit unions of all sizes signed up to join the network during the next few months, and the network now has the technical capability to reach thousands more financial institutions,” said Steve Ledford, Senior Vice President of Product Development and Strategy at The Clearing House in the release.        

According to a recent Business Insider article, “TCH’s real-time payments growth puts it in competition with the Fed, Mastercard, and Visa.” The article further points out:

TCH's RTP network could quickly gain adoption during the pandemic because FIs may want to provide SMBs and consumers with fast access to funds. Many SMBs have faced a cash crunch during the pandemic, while consumers have dealt with unemployment and drops in income, meaning both groups need to be able to access the funds they have quickly.

As noted in the article, “Rapid expansion should be a major initiative for TCH because it's racing against serious competitors in the fast payment space.”

According to, the competition is ramping up. Fast.

Visa and PayPal have expanded ways for small to medium-sized businesses (SMBs) and consumers to move money quickly, reported PYMNTS. “The global partnership will boost sending or receiving funds through PayPal, Venmo or Xoom. The collaboration extends PayPal’s Instant Transfer service which uses Visa Direct, Visa’s real-time push payments platform, for real-time payments.

We also have to note that the Federal Reserve recently announced it will be sharing educational resources to help stakeholders across the payments ecosystem see the possibilities and plan for the implementation of faster and instant payments.

A series detailing the basics of faster payments and the journey toward implementation are available on Topics include what’s trending in the world of faster and instant payments, a look at different types of faster payments, and much more. A free infographic mapping the journey is also available here.

In addition, Ken Montgomery, First Vice President and Chief Operating Officer at the Federal Reserve Bank of Boston and the individual leading the FedNow(SM) Service, has been speaking more publicly about FedNow. In fact, he recently served as the opening keynote speaker for the virtual member meeting of the U.S. Faster Payments Council (FPC). Montgomery provided an update on FedNow and discussed industry trends. This comes on the heels of the Fed’s recent announcement stating the Board has approved the core features and functionality of the FedNow system.

Additional highlights of the member meeting included roundtable discussions focused on generating faster payments use cases and interoperability, as well as a panel discussion on the intersection of faster payments and the law. Work group meetings explored how to integrate messages from the meeting into their next steps.    

Also noteworthy: FPC, in collaboration with Glenbrook Partners, launched the second Faster Payments Barometer survey with the goal of evaluating where things stand a year after the release of the first survey. If you have a moment, please take the time to complete it so your feedback is directly reflected in the results.


Technology Solutions: Voice Payments

As voice assistants like Alexa and Siri climb in popularity, they continue to find intersections with payments, offering on-demand retail payments, P2P solutions, and even bill-pay opportunities. As this fledgling market evolves, financial institutions will be looking for resources to guide their use and opportunity.

As a member of Nacha’s Payments Innovation Alliance’s Conversational Payments Project Team, I wanted to tell you about our new release: “Voice Payments: An Introduction and Overview. ” This is the first in a series of executive briefings designed to deliver targeted, clear, and concise information focused on the still-emerging channel of conversational payments, as well as its enabling technology, such as voice assistants and smart speakers.

We will continue to monitor this area for developments and post updates in our news feed on the Innovating Payments microsite, as well as share new resources directly with you.



Speaking of new resources, to help financial institutions address the challenges that often arise with innovation and compliance, NEACH developed its latest white paper, Managing Compliance in Today's Innovation-First Environment. The paper features commentary from community banks and regulators such as the OCC and the Federal Reserve, and speaks to the challenges that arise when legacy regulations clash with product innovation and how best to make the two work.

And if you’re looking for insights into where the digital environment will go next, join us on November 4 for our webinar, Payments Innovation and Digital Transformation. Here we will be unpacking emerging trends in digital transformation and the increasing level of payments innovation embedded within platforms serving the financial services industry.

In addition, if you haven’t done so already, mark your calendars now for NEACH’s virtual Payments Management Conference, Nov. 16-17. This must-attend event features two days filled with education and insights on the continued evolution of payments. Sessions include: Using RTP to Enhance Legacy Payment Products, Check Fraud: Statistics, Check Law and Risk Mitigation, and an Update from NEACH’s New Role of Operations Workgroup, to name just a few.

Consider NEACH your strategic partner. We are always ready to help. For questions, you can call the Payments Hotline at 855-NEACHQA. We hope to see you at this fall’s exciting events.