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1 –The growth in overlay services will accelerate real-time payment take-up.
With open APIs enabling imaginative overlay services, the payment itself becomes a frictionless element in the process. Consumers are demanding ease of use, transparency, certainty and immediacy when moving their money. Some overlay services are being developed at market level while others are being created on a
competitive basis. A standardized collaborative approach takes time but can reap benefits.
Currently, the areas showing the most progress are Request to Pay, aliases, and P2P payment
services We can expect to see more of the overlay services come to market in the year ahead.

2 –The size of the real-time payment prize for business use will become a reality.
The promises of faster cash flow, minimal exceptions, and automatic reconciliation are appealing to businesses. Given the complexities of multiple system dependencies in payments processing. Risk adverse companies will take a “wait and see” attitude. However, a handful of leading companies are moving ahead, and we expect to see some high-profile examples that prove the value of B2B real-time payments by next year that will ignite demand.
Therefore, financial institutions and fintechs should look at pilots and sandboxes, and test with
more innovative businesses to ensure readiness.

3 –Improved information and data flows will further streamline real-time payments.
With most real-time payment schemes based on the international ISO 20022 standard, payment transactions can now be sent with additional information that aids reconciliation and increases transparency.
With innovative overlay services, banks also can draw on the additional data becoming available with real-time payments to inform and assist customers with services such as budget management and make better targeted product recommendations.
Banks must now determine how to manage, use, process and store data they have not previously had to handle. In the near term, data will be the new battlefield for competitive differentiation.

4 –Cloud-based processing will increase accessibility to real-time payments.
The growth in cloud-based processing coincides with that of real time payments to enable wider participation. The benefits of this synergy – lower costs, compliance maintenance, improved agility and flexibility to adapt to new services, and the ability to react to fluctuating volumes quickly – will enable established participants and new entrants to embrace real-time payments opportunities with greater speed and efficiency. Indirect models enable new entrants to get to market quickly with open API accessed services from expanded participation of third parties. Adoption rates will improve exponentially.

5 –How the changing face of the industry will continue to impact real-time payments.
Retailers and fintechs are embracing open payments initiatives with innovative ideas to extract
more value from payments through enhanced customer engagement combined with lower costs of handling and processing.

Card companies are increasingly demonstrating commitment and confidence in real-time payments as the way to pay in the future with numerous investments and acquisitions by
MasterCard and Visa. Technology giants including Amazon, Facebook, Alipay, Tencent (WeChat), Baidu and Google are continuing to expand their presence in real-time payments. With cash transferred as easily as a chat message, there is no need to open a banking app, thereby reducing payment friction.

Going forward, tech companies will own more of the payment process (before, during and after a transaction) to leverage opportunities for high-frequency, low-margin revenue and capturing purchase behavior and data. Real-time payments are the new frontier and its all up for grabs. The greater the industry consolidation and investment, the faster we will see real time payments accelerate in adoption, value, and volumes.

FIS is one of the leading companies in real-time payments. For more information on how this can benefit your credit union see www.fisglobal.com and contact Dan Collins @ dcollins@nebrcul.org