Welcome to the Top 3 Innovating Payments Headlines for the Week of Sept. 17, 2023. In this issue, the 2023 edition of McKinsey's Global Payments Report shares important findings from their global market intelligence. The good news is that financial institutions have plenty of future opportunities. Also, in this issue, Plaid and Cross River have joined the FedNow® Service to widen customers' instant payment access. The collaboration makes Cross River among the first financial institutions to provide routing options via FedNow Service or the RTP® network. Finally, embedded finance is on the rise, causing executives at traditional banks and credit unions to rethink their business models and the technology they need to be successful.
Read on to learn more.
1. On the Cusp of the Next Payments Era: Future Opportunities for Banks (McKinsey & Company)
The payments industry's 2022 performance shows ongoing change with opportunities for growth and margin improvement across geographies and products. A close look at revenues uncovers structural changes, including new developments in instant payments and digital wallets. This 2023 edition of McKinsey's Global Payments Report shares key findings from our proprietary market intelligence recorded in the Global Payments Map, which spans over 25 payments products in 47 countries that account for 90 percent of global GDP. (Read more.)
2. Plaid and Cross River Team on Real-Time Payments with FedNow (PYMNTS)
Cross River Bank and Plaid say they've joined FedNow® Service to widen customers' instant payment access. The collaboration, announced Monday (Sept. 18), also makes Cross River among the first financial institutions to bring an interoperable offering to its customers providing routing options via either the FedNow Service or the RTP® network. "When enabled, the interoperable offering from Cross River means consumers and businesses can count on efficient, secure and reliable money movement, such as when managing their funds, paying bills, receiving payouts and avoiding late fees," according to Cross River. (Read more.)
3. Making Banking Frictionless: The Rise of Embedded Finance (The Financial Brand)
As embedded finance gains momentum, executives at traditional banks and credit unions are rethinking their business models and the technology they need to be successful. But are they moving fast enough? And do they have the correct priorities? Research suggests bankers face a lot of hurdles in the effort to capitalize on this opportunity. What's more, they are misreading what matters most to consumers. The digital revolution has changed how consumers want to engage and transact with their financial institution. Many consumers are managing their money online or with mobile apps, rather than visiting a branch. (Read more.)
What future global opportunities might your financial institution explore? How might the collaboration between Plaid and Cross River to offer the FedNow Service and the RTP network affect the industry and instant payments? As embedded finance gains momentum, how is your financial institution rethinking its business models and technology and what it needs to be successful?
Check back soon for our next issue, highlighting the industry's most pressing and need-to-know developments. Until then, visit us online at Innovating Payments.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.