Show Report: NACHA Payments 2012 – Day 2 and 3

Following on from the first day of the NACHA Payments 2012 conference, which looked at innovation and collaboration, experts on the payment systems in the US, Canada and the UK met on Tuesday 1 May in the morning to discuss their countries’ respective conversion to more modern payment methods in the session entitled ‘Three Countries’ Paths for Escaping Paper Cheques’. Richard Fraher, assistant general counsel, Federal Reserve Bank of Atlanta; Doug Kreviazuk, vice president of policy and research, Canadian Payments Association; and Liz Oakes, principal advisor, KPMG, weighed in on Check 21 and the Regulation CC proposal in the US; the recent push to by the Task Force for the Payments System Review to reduce cheque usage in Canada; and similar plans to phase out cheques in the UK, which are presently stalled in the face of opposition from pensioner groups.

Regarding the initiative in Canada, Kreviazuk said in an interview with gtnews following the session that the Canadian Task Force made a “brilliant” move by bringing together senior people across the industry – financial institutions, service providers, telecommunications companies – listening to everyone, and initiating dialogue between them all. “The Task Force is now finished, but I think this dialogue lives on,” said Kreviazuk. “I think what you are going to see is that it’s going to continue, and the key issues now have been tabled. The government is aware of what those issues are and I wouldn’t be surprised if the finance minister raises those issues within the context of his new senior advisory committee when it comes to things like mobile payments, or whatever it might be. If you continue to the talk to the industry, then you’ll come up with a solution.”

Oakes noted that in the UK the value of cheques have slightly increased, despite the volumes themselves drastically going down. In an interview with gtnews, she explained that larger volume payments could shift to another method eventually, but many consider it to be the most efficient way of making a payment a stranger. Additionally, she sees a cultural barrier. “You see people on TV with very large cheques. Stop giving people big cheques, if you don’t want to give them cheques. It’s a messaging thing. If you won something, people say to you, ‘the cheque’s in the post.’ Somebody needs to come up with a good replacement. Everybody associates a big payout with a big cheque.”

Cloud-based technology was another topic that took centre stage at NACHA Payments 2012. In the session entitled Business ‘Critical Security and Compliance in the Cloud’, Jeff Reich, chief risk officer (CRO), Layered Technologies, provided an in-depth look at the cloud and the inherent security risks that adopters need to watch out for. As clouds are now used for transaction processing, data storage and line-of-business applications, there are many security controls that users should have in place.

Reich pointed out that everyone in the audience was using the cloud in some way – whether they knew it or not – through their iPhones, iPads, Androids, PayPal, Facebook, etc. “You can’t resist the cloud,” he said. “It’s here, it’s going to happen; if you resist it, the more difficult the transition will be.”

Tuesday 1 May also saw the Payments System Awards Lunch, which honoured organisations and individuals for outstanding efforts in electronic payments (e-payments). This year’s winners were:

  • ACH Alert received the 2012 Kevin O’Brien Automated Clearing House (ACH) Quality Award for innovations in helping financial institutions and corporates detect, prevent and react to fraud.
  • Cigna Global Health Benefits received the 2012 NACHA PayItGreen Award for its ‘Go Green’ efforts, allowing customers to receive electronic explanation of benefits (EOB) statements.
  • J Steven Stone, an accredited ACH professional (AAP) at PNC Bank, received the 2012 George Mitchell Payments System Excellence Award for his extensive work in establishing the ACH network over the past 30 years.

Following the awards ceremony, author and television personality Brad Meltzer took to the stage for the keynote session entitled ‘Ordinary People Can Change the World’. Meltzer discussed a number of his life experiences, from writing his first novel (and receiving multiple rejections), to being treated like a major Hollywood celebrity in Bulgaria, to pooling money together to save the house where Jerry Siegel created Superman. Meltzer stressed that the things we do in life – the paths that we choose and the people that our actions affect – are the things that make up our legacies.

In the afternoon session, ‘EMV: What Will US Adoption Look Like’, Mario de Armas, senior director of international payments at Wal-Mart Stores, and Pete Korpardy, senior vice president (SVP), global network management, First Data, discussed how migration to the EMV standard in the US is moving at a much slower pace than the rest of the world, which has nearly universally incorporated it. They weighed in on the EMV roadmaps introduced by Visa and MasterCard, the signature/PIN debate, and the primary driver for EMV implementation, namely cutting down on fraud.

In the session entitled ‘Navigating Next Generation Mobile Banking and Payments’, Taylor Vaughn, director of treasury management services for First Tennessee Bank; Greg Keenan, principal consultant, Sybase; and Matthew Richardson SVP and head of product management, RBS Citizens, discussed corporate treasurers’ interest and apprehension when it comes to mobile banking (m-banking). Though usage is growing, a recent survey showed that for 80% of corporates, security is a concern – and for 58%, it is a blocker.

However, the panel noted that corporate practitioners are the ones who are really pushing for mobile banking options, as they need access to business critical information when they are on the road. “Business doesn’t stop,” said Keenan. “So the ability to transact and look at account histories about your business is a critical advantage. It’s probably the primary advantage to a m-banking application.”

During the session, ‘The Future of Mobile and Social Media Payments’, three payments industry experts discussed the evolution of mobile and social media. Marianne Crowe, vice president, Federal Reserve Bank of Boston; Steve Mott, principal, BetterBuyDesign; and Tim Ruhe, vice president of strategy and business development, digital payment services at Fiserv, explored some of the most significant developments in mobile payments over the past year, such as PayPal usage seeing a drastic increase, the Isis and Google mobile wallets, the debate over regulation, and cloud-based mobile payments (m-payments).

Following the session, Crowe discussed the security risks of both cloud-based mobile payments and mobile applications that store information on the phone. Since a phone can be easily lost or stolen, the cloud has gained its share of proponents. “But what if you outsource to a company that provides cloud services to multiple businesses? Then you have to worry about the same things. You can have a data breach if they’re not complying. How do you know that the company you outsource to is following your risk management requirements? There’s a lot of due diligence that has to happen.”

Third and Final Day

Wednesday 2 May was short day that featured only concurrent sessions. In ‘Five Ideas Worth Stealing from Europe’, Leo Lipis, managing director, Lipis & Lipis, and Andrew Schmidt, research director, global payments, CEB TowerGroup, discussed current European payment trends, both good and bad. Topics included ACH payment origination, real-time credits, direct debit authorisation management, mobile payments adoption, introducing new payment formats without getting rid of old ones, blaming customers, charging for basic services, and more.

The final day of NACHA Payments 2012 also included the session, ‘Mobile Corporate Banking: Changing How You Bank’. William Attinello, director, treasury, Verizon Wireless; Courtney Lowe, assistant treasurer, Fiserv; Ranjit Pradhan, vice president and product manager, Wells Fargo; and Valarie Van Vlack, treasurer, Texas State University-San Marcos, explored how corporates are increasingly adopting m-banking in order to become more efficient and improve business continuity.

Pradhan identified what he sees as the biggest shift in recent years in the mindset of the corporate user in regards to mobile banking. “The user is no longer deskbound,” he said. “Back in the day, a treasury management professional is probably stuck in the office, morning until night, processing paper, sitting there doing alerts and sending out payments and so on. But I don’t think that’s the case today. People are on-the-go. They want to cut loose, but they want to stay connected. They want alerts. They want to do wires on the move. They want to be in control. Yet they’re far away from it all.”

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