The fintech company has several real-time payment functions for its participating banks and members of the COOP credit union network and for P2P payments. It offers deployments that could let banks got to real-time payments in months for smaller financial institutions, she said.
“We also have an offering to work with large financial institutions. At smaller banks we struggle because there are so many different levels of understanding in the U.S. of what real-time payments are. What does the bank need to connect to, what is the difference between Zelle and TCH? Industry education has become real important. I would say a significant portion know the words real-time payment but they don’t know what that means for their financial institution. It is not only about what products each vendor offers but how to educate a bank so they know what to do with changes within their bank. We haven’t introduced a new payment method since the 70s.”
FIS says that the value of faster payments will come through services that ride on top of the payments.
“Faster payments are no longer a differentiator,” according to the report, which seems to overlook the lack of widespread faster payments in the U.S. “The real determinant of innovation lies in what can be done on the rails once they’re built.”
The FIS report concluded that overlay services – chat, retail apps, instant loans and more – and open APIs (Application Program Interfaces) provide innovations that encourage consumers and businesses to use real-time payments.
Banks use APIs to deliver services from third parties and sometimes to simulate real-time transaction with legacy mainframe systems that process in batch.
Legacy systems that have built up over time, and may have come from two or more firms through years of mergers and acquisitions, are sometimes described a running code that looks like spaghetti.
Will APIs make it worse?
“APIs can add spaghetti if not used strategically,” said Whisler. “Sometimes organizations use APIs to hide and create a real-time experience without migrating the back office, and that can add a layer of indirection,” she said. “We have also seen it done right, used as a platform along with an API gateway to centralize how APIs are exposed and processed.”