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In its January 2015 report, “Strategies for Improving the
U.S. Payment System,” the Fed estimates the cumulative imple- mentation costs of a faster pay- ments system could be anywhere from $3.8 billion to $7.2 billion. However, the net business case could be between negative
$0.9 billion and positive $1.8 billion, according to the Fed.
Steve Ledford, senior vice pres- ident for product and strategy
at TCH and one of the leads
on faster payments, says much of the cost will be in the inte- gration of the new real-time payments system and creating products and services to make the system usable. The organi- zation’s estimates are in line with the Fed’s numbers, and Ledford says the real invest- ment will come from upgrading existing systems to work with the new system in real time and securely.
The Power of Push
A key benefit of TCH’s real-time payments network will be security, Ledford adds. Real-time payments systems typically are based on
a credit-push model as opposed
to a debit-pull model. Most of the payments we make today are pull payments. For example, when you swipe (dip or tap) a card at the POS, the terminal sends a message to your bank to pull the funds from your account to cover the purchase. The process is similar if a biller
volume 8 • fall 2015
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