Rich Clow's Role and Team:
- Rich Cloud leads payment innovation at Bank of America.
- Focus on evaluating new technologies and solutions.
- Assessment of new networks, checkout solutions, and step-function capabilities.
- Pro-stage gated process for evaluating and validating solutions.
- 75% of his time dedicated to consumer and small business solutions.
- 25% of the time with the GTS function, bringing Bank of America capabilities to large corporates.
Real-Time Payments Basics:
- Real-time payments involve instant settlement of funds between banks.
- Reduces risk and friction compared to existing frameworks like ACH.
- Credit transfers with an evaluation of account standing before sending.
Importance of Real-Time Payments:
- Speed of funds transfer is the essence of real-time payments.
- Enables the development of innovative solutions for consumers and corporates.
Consumer Transactions with Real-Time Payments:
- Immediate confirmations in consumer transactions.
- Improved bill pay experience with proof of fund availability.
- Introduction of "Request for payment" user experience.
Corporate Implications of Real-Time Payments:
- Significant opportunities for collections departments.
- Ensures timely payments with proof of fund availability.
Real-Time Payments Landscape:
- Two main networks for real-time payments in the United States: FedNow and the Clearing House.
- Similar to the existence of multiple networks for ACH and wires.
- Competition is expected to drive better innovation, cost, and terms, similar to Visa and MasterCard in the card payments space.
Fintech and Developer Impact:
- Successful FinTechs leverage tools and standards from networks to create innovative user experiences.
- Integration of standards like ISO 8583 and ISO 20022 into businesses and applications.
- Continuous innovation in payment flows, such as virtual cards for B2B payments.
Looking Forward:
- Real-time payments are considered transformative in the payment landscape.
- Predicted to be a major shift in payment experiences, comparable to the evolution from knuckle-buster credit card authorizations to modern payments.
- Global adoption of real-time payments in various markets, with the U.S. learning from international experiences.
- Emphasis on collaboration and partnerships to accelerate innovation and time to market.
- Acknowledgment that real-time payments will play a significant role in the majority of payment settlements globally.
- Recognition of the need for inspiration from markets ahead in real-time payments, fostering a collaborative and iterative approach to innovation.
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