Page 40 - Pay Magazine s2014

digital money
New Routes, Not New Rails The last mile in displacing checks is within reach.
VIewpoInt
By Drew Edwards, Ingo Money
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to o er readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.
In all the excitement around faster payments, I think the industry is missing an oppor- tunity to solve a problem for
corporate customers with existing technology. Why wait years for the right partnerships and develop- ment required to build or lease new rails when the card network rails that have worked well for more than 50 years can serve our purpose—albeit in a new way?
Here’s the scenario: Every day, U.S. corporations cut checks to other businesses and to indiv- iduals. Think insurance claims payments, health care reimburse- ments, loan disbursements and legal settlements, to name only
a few use cases. Despite overall declines in U.S. check payment volume, 44 percent of all noncash payments in 2013 were check payments, according to the most
recent Federal Reserve pay- ment study. Corporate payments make up the largest chunk of those $26 trillion in check pay- ments. Checks are expensive, ine cient and fraught with security problems.
The answer is simple. It’s not
about building new rails for
faster payments or harnessing
new technologies like blockchain. It’s about building new routes on existing card rails, so companies can take advantage of push pay- ments directly to consumers’ cards. The payment network infrastructure is already built. Retailers make push payments onto cards all the time when consumers return items and the purchase price is credited back to the account. It’s part of
the daily settlement of card trans- actions, but non-retail corporations need an on-ramp to access these
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