Welcome to Innovating Payments' Top 3 News Headlines for the Week of March 17, 2025. This issue highlights discussions about the divide between larger and smaller financial institutions and the adoption of real-time payments, noting that cost and integration concerns act as barriers preventing smaller institutions from embracing real-time payment solutions.
In other news, Square Financial Services, Inc. has reached a milestone with FDIC approval to offer small, easy-to-repay consumer loans through its Cash App. This strategic move aims to foster economic empowerment and provide greater financial flexibility for consumers.
Meanwhile, the Office of the Comptroller of the Currency (OCC) has taken a clear stance on cryptocurrency. By reaffirming the permissibility of various crypto-related activities within the federal banking system, the OCC is paving the way for continued innovation.
Read on to learn more.
1. Cost and Integration Concerns Keep Smaller Banks From Adopting Real-Time Payments (PYMNTS.com)
The benefits of real-time payments may be readily apparent to financial institutions (FIs), as they can serve their clients with new use cases, including pay by bank and immediate payroll deposits. With speedier and more transparent cross-border payments, they can foster strong relationships with commercial customers. And yet, there's a gulf between the FIs that sign on to real-time rails and those that do not. The gap is noticeable when it comes to size. In the Real-Time Payments Tracker® series report titled "Catching the Rails: The Real-Time Payments Opportunity for Small FIs," we found that larger FIs have been throwing their time and resources into connecting to real-time rails while smaller banks are lagging… (Read more.)
2. Square Financial Services Receives FDIC Approval to Offer Consumer Loan Product (Businesswire)
Today (March 13), Block, Inc. (NYSE: XYZ) announced its industrial bank, Square Financial Services, Inc. (SFS), has received approval from the Federal Deposit Insurance Corporation (FDIC) to begin offering the consumer loan product Cash App Borrow. SFS is an independently governed subsidiary of Block, Inc., headquartered in Salt Lake City, Utah. The expansion of Square Financial Services, Inc.'s expansion to offer small, easy-to-repay consumer loans to Cash App customers will continue to empower consumers economically. Cash App Borrow is designed to provide short-term cash flow in a simple and accessible way when alternatives are notoriously expensive and difficult for consumers to navigate. (Read more.)
3. OCC Clarifies Bank Authority to Engage in Certain Cryptocurrency Activities (OCC)
The Office of the Comptroller of the Currency (OCC)…took action to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system. The OCC published Interpretive Letter 1183 to confirm that crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as distributed ledger are permissible for national banks and federal savings associations. The letter also rescinds the requirement for OCC-supervised institutions to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in these cryptocurrency activities. (Read more.)
To your knowledge, what challenges or concerns have prevented smaller financial institutions from adopting real-time payment systems? What downstream impact will FDIC approval of Square Financial Services, Inc.'s offering of consumer loan products have on FIs? Finally, how will the OCC's reaffirming a permissible range of cryptocurrency activities to the federal banking system affect the industry moving forward?
Check back soon for our next issue, highlighting the industry's most pressing and important developments. Until then, visit us online at Innovating Payments.
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AUTHOR: Joe Casali, AAP, AFPP, APRP
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.
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