Wrestling Payments is a podcast for professionals working at banks, credit unions, and FinTechs responsible for managing ACH and payment operations. In each episode, members of NEACH guide conversations to help professionals examine the challenges of modernizing payment operations. Ultimately, the stories uncovered through guest interviews and solo episodes will highlight industry trends and identify how organizations can build their payment operations for the future. Let's get into it!

Subscribe to Our Podcast!

Season 2

Episode 04

Critical Nacha Rules Changes with Guest Sean Carter

 

Episode Summary

In this episode of Wrestling Payments, host Joe Casali talks with Sean Carter, President & CEO at NEACH, about the significant changes in ACH rules. They dive into the recent ballots passed with over 93% approval, focusing on the new risk management framework. This framework aims to protect the payment network from fraud, a challenge all payment systems currently face. Carter emphasizes the collective effort required to combat fraud, highlighting that the changes affect not just one party but all involved in the ACH network.

The conversation then shifts to specific rule changes, particularly the ACH credit monitoring by RDFIs. This new concept asks receiving financial institutions to do more in spotting and preventing fraud, marking a departure from the traditional focus on originators and ODFIs. Examples of past fraud incidents are discussed to illustrate the potential impact of these rules in preventing future fraud. Carter points out the importance of collaboration between RDFIs, ODFIs, and originators to effectively use these rules.

Finally, Carter stresses the urgency of implementing these changes well before the 2026 deadline. He suggests that financial institutions should not wait to adapt, given the serious implications of fraud on society, including funding for trafficking, drugs, and terrorism. The discussion concludes with the importance of keeping information up to date in the NACHA registry and leveraging technology like AI to enhance fraud detection efforts.

Download the Episode Transcript

 

Guest-at-a-Glance

πŸ’‘ Guest: Sean Carter

πŸ’‘ What he does: President & CEO

πŸ’‘Company: NEACH

 

Key Insights

A United Front Against ACH Fraud

Sean Carter emphasizes the importance of a collective effort in combating fraud within the ACH network. The new ACH rules, passed with overwhelming approval, reflect this approach by not singling out any one party but rather distributing the responsibility across RDFIs, ODFIs, originators, and third-party senders. This strategy acknowledges that fraud is a complex issue that no single entity can address alone. By mandating contributions from all sides, the aim is to fortify the entire payment system against fraudulent activities, demonstrating a shift towards a more inclusive and collaborative defense mechanism within the financial ecosystem.

 

Enhanced Role of RDFIs in Monitoring ACH Credits

The episode dives into one of the major changes in the ACH rules: the requirement for RDFIs to monitor ACH credits more closely. This significant shift tasks RDFIs with identifying and addressing potential fraud more proactively. Previously, the focus was predominantly on the originators and ODFIs. By extending this responsibility, the new rules aim to leverage the unique position of RDFIs to spot unusual activities, such as unexpected large deposits, that might indicate fraud. This change underscores a holistic approach to fraud prevention, recognizing that effective detection requires insights from all parties involved in the transaction process.

 

Immediate Action Required to Combat Fraud

Despite a 2026 deadline for implementing the new ACH rule changes, Sean Carter stresses the importance of starting now. He highlights the critical nature of fraud prevention, not just for the integrity of the payment system but also for societal concerns, as fraud often funds illegal activities. By encouraging financial institutions to adopt new measures promptly, Carter underscores the notion that waiting is not an option when it comes to safeguarding against fraud. This urgency is a call to action for all entities involved in ACH transactions to review and update their processes, utilize new technologies, and ensure compliance with the evolving landscape of financial security measures.

 

Episode Highlights

The Rising Challenge of ACH Fraud

Timestamp: [00:02:05]

Joe Casali and Sean Carter discuss the alarming rise in ACH fraud, highlighting its impact on the payment system's integrity. They focus on how fraud challenges, including person-to-person fraud and email impersonation, have necessitated the development of a new risk management framework by NACHA. This framework is designed to protect the ACH network and its users by implementing rules aimed at mitigating fraud risks. The conversation underscores the pressing need for these changes, given the sophistication and prevalence of fraudulent activities targeting the ACH system.

"Felt that these were important changes important enough to approve them becoming rules. Uh the impetus for this really uh is really to try to protect the network. Uh anybody that's paying attention can tell you that all payment systems including ACH are being really challenged right now with fraud."

 

Leveraging Technology to Combat Fraud

Timestamp: [00:20:53]

The podcast highlights the critical role of technology, especially AI, in enhancing ACH fraud prevention efforts. Sean touches on how the new risk management framework could benefit from advancements in technology, providing financial institutions with better tools to detect and prevent fraud. He emphasizes the importance of integrating technological solutions into the ACH network's defenses against fraud, suggesting that future enhancements in AI and machine learning could significantly improve the effectiveness of these measures.

"I don't think anybody needs to wait. I think you can start formulating your plan now, work with your cores, look for technology. What can AI do and look at spaces where AI could help with this. "

 

Early Adoption of New ACH Rules is Crucial

Timestamp: [00:13:56]

The dialogue emphasizes the importance of early adoption of the new ACH rules, well ahead of the 2026 deadline. Sean Carter argues that given the serious implications of fraud, it's imperative for financial institutions to start planning and implementing the necessary changes immediately. He illustrates how fraud not only affects the financial system but also has broader societal impacts, funding illegal activities such as trafficking and terrorism. The conversation calls for proactive measures, urging institutions to not delay their response to these critical updates.

"So part of it is that the RDFI will now do a little more due diligence and say why did this one account get five different names of five different unemployments from three different states?"

 

Striking a Balance: Regulation and Innovation in ACH Transactions

Timestamp: [00:16:52]

In this segment of the podcast, Joe and Sean discuss the balance between introducing new regulations to combat fraud and fostering innovation within the ACH payment system. They touch on how the ACH rules serve as minimum requirements, encouraging financial institutions to go beyond these standards to protect their customers. Sean Carter suggests that as technology evolves, so too will the strategies employed by fraudsters, making it crucial for regulations to adapt in tandem to ensure the ACH network remains secure and efficient for users.

"We put that in as a response to natural when they were doing the web rule. We thought it should be for every SEC code. Anyway I don't I don't think an SEC code drives fraud right? It's the actions of the originators and the receiver."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 03

Back to the Fintech Gym with Host Joe Casali

 

Episode Summary

In this episode of Wrestling Payments, Joe Casali shares insights from the MIT Fintech Conference, focusing on the rapid evolution of fintech. He discusses how artificial intelligence and blockchain technology are driving change in the payments industry. Joe also highlights the importance of navigating regulatory landscapes to foster innovation while ensuring security and trust.

The conversation shifts to the impact of digital currencies and payment platforms on traditional banking systems. Joe emphasizes the need for financial institutions to adapt to these changes to remain competitive. He provides examples of how fintech startups are challenging established players by offering more efficient and user-friendly solutions.

Lastly, Joe offers advice for entrepreneurs entering the fintech space. He stresses the significance of understanding customer needs and regulatory requirements. The episode concludes with Casali predicting future trends in fintech, including further integration of AI and personalized financial services.

Download the Episode Transcript

 

Guest-at-a-Glance

πŸ’‘ Host: Joseph Casali

πŸ’‘Company: NEACH

πŸ’‘Where to find Joe: LinkedIn

 

Key Insights

Navigating the Future: Fintech's Leap into AI

Joe Casali discusses the significant strides in artificial intelligence (AI) within the fintech sector, particularly emphasizing AI's potential as an underlying operating system for financial platforms. This concept heralds a transformative approach to handling financial transactions, where AI's integration could lead to more informed decision-making processes and a new era of financial services innovation. The conversation sheds light on the cautious yet optimistic embrace of AI in fintech, highlighting the balance between leveraging cutting-edge technology and ensuring reliable, garbage-free outputs.

 

The Real-time Payments Challenge: Finding a Use Case

A significant part of the discussion centers around the excitement and subsequent skepticism surrounding real-time payments (RTP). Despite the technological achievement of developing RTP systems like FedNow and RTP, Casali underscores a pivotal concern: the need for compelling use cases that justify the adoption and widespread use of these systems. This insight delves into the industry's quest to demonstrate how RTP can meaningfully change the financial landscape, reflecting a critical juncture where potential meets practical application.

 

Fintech's New Frontier: Making Regulatory Compliance a Core Competency

In the fintech industry, where innovation races ahead, regulatory compliance emerges as a key area of focus. Joe highlights how fintech companies are now prioritizing knowledge about banking regulations, transforming compliance into a valued skill rather than a cumbersome obligation. This shift reflects a broader understanding that navigating the complex regulatory environment is essential for sustainable growth and innovation in fintech. It marks a maturation of the fintech sector, acknowledging the importance of aligning cutting-edge financial solutions with regulatory standards.

 

Episode Highlights

AI as Fintech's Backbone: The Next Revolution

Timestamp: [00:14:07]

Joe Casali discusses the pivotal role of artificial intelligence (AI) in shaping the future of fintech. He emphasizes AI's potential to act as the foundational operating system for financial services, transforming decision-making processes and enhancing service delivery. Casali highlights the dual nature of excitement and caution in adopting AI, stressing the importance of informed models to avoid "garbage in, garbage out" scenarios.

"AI could become the underlying operating system on a platform... There is so much being done today with AI... cautious approaches are necessary to ensure quality outputs."

 

Real-time Payments: Searching for a Strong Use Case

Timestamp: [00:19:14]

The conversation dives into the development of real-time payments systems like FedNow and RTP. Despite technological advancements, Joe points out the industry's challenge in identifying compelling use cases that justify widespread adoption. This section underscores the gap between technological capability and practical utility in the payments sector.

"All the excitement around developing a real-time system has come down to... Show me how real-time payments make a difference."

 

Embracing Regulatory Compliance in Fintech

Timestamp: [00:05:12]

Regulatory compliance emerges as a critical theme, with Joe advocating for fintech companies to view compliance not as a burden but as a competitive advantage. He discusses how a deep understanding of regulatory frameworks is essential for fintech innovation and sustainability, marking a significant shift in how startups approach the financial landscape.

"FinTech regulations... the days of talking to a FinTech who has no idea about regulation around banking, those days are probably gone."

 

Teamwork and Mentorship: Keys to Fintech Success

Timestamp: [00:07:31]

Highlighting the significance of having a solid team and mentorship, Joe reflects on the conference's insights into entrepreneurship within fintech. He argues that a great idea or a great team is essential for success, with the potential to compensate for the other's weaknesses. Furthermore, Casali emphasizes the role of mentors and resources in navigating the complex fintech environment.

"You need one of two things to be an entrepreneur in the FinTech world. One is a great idea. One is a great team. You need either one of those to be successful."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

 

Episode 02

Wrestling with Priorities with Host Joe Casali

Episode Summary
 

In this episode of Wrestling Payments, host Joe Casali engages with the intricate world of payment systems. He dives into the evolving landscape, highlighting the shift towards faster and more secure transactions. Joe sheds light on the technological advancements driving change, from blockchain to AI, emphasizing their impact on both consumers and financial institutions.

Primarily, this episode reports on the responses to our listeners' responses of the areas of interest they would like to hear more about in 2024. It also includes a thank you for named respondents.

1. Faster Payments – Operational Considerations

2. Faster Payments – Strategic Considerations

3. AI and Fraud

4. Payments Modernization – Payment Choices

Joe concludes with insights into the future of payments, including the potential of FedNow and other real-time payment solutions. Casali's expert commentary provides listeners with a comprehensive understanding of the payment industry's current state and dynamic future, making this episode a must-listen for anyone interested in financial technology and innovation.

Download the Episode Transcript


Key Insights
 

The Rise of Faster Payments and Operational Considerations

 The episode dives into the rapidly evolving landscape of faster payments, highlighting operational considerations that businesses face. With faster payments, questions around functionality, error handling, and unexplored details come to the forefront. The push for speed in transactions offers benefits but also introduces complexities in implementation and management. This insight underscores the need for financial institutions to adapt to new technologies while ensuring reliability and security in their operations.

 

Strategic Implications of AI and Fraud in Payment Systems

 AI's integration into payment systems marks a significant shift towards combating fraud more effectively. Joe explores how AI tools enhance fraud protection by analyzing patterns and identifying anomalies in transaction data. This technological advancement is not just about preventing unauthorized transactions; it's also about streamlining processes and improving operational efficiency. The episode emphasizes AI's role in shaping future payment security strategies, illustrating its potential to mitigate risks in an increasingly digital financial landscape.

 

Payment Evolution: From Barter to FedNow

 Tracing the history of payment systems from barter to the introduction of FedNow, the episode provides a comprehensive overview of how payment methods have evolved. It highlights the persistence of older payment systems alongside the adoption of new technologies. The focus on FedNow's launch and its adoption by financial institutions showcases the industry's movement towards instant payment solutions. This insight reflects on the diverse payment mix available today and the strategic decisions businesses must make to accommodate consumer preferences and technological advancements.

Episode 01

Wrestling with Entrepreneurs - Tilled with Guest Caleb Avery


Episode Summary

In this insightful episode of Wrestling Payments, host Joe Casali welcomes Caleb Avery, CEO of Tilled, to discuss the evolving world of payment processing. Caleb shares his journey from door-to-door sales to pioneering innovative payment solutions. He reflects on the complexities of the industry, highlighting the nuances of competing and partnering within the same space.

Caleb dives into the intricacies of payment facilitation, explaining how companies like Stripe and Square have revolutionized the field. He emphasizes the role of software-led payments in reshaping the industry, offering a glimpse into the future of payment processing. His insights reveal how technology and strategic partnerships are key in navigating this dynamic landscape.

The conversation also touches on the importance of adapting to industry changes and leveraging emerging opportunities. Caleb's expertise offers valuable lessons for aspiring entrepreneurs in the fintech space, illustrating the balance between innovation and practical business strategies.

Download Episode Transcript


Guest-at-a-Glance

πŸ’‘ Guest: Caleb Avery

πŸ’‘ What he does: Founder, CEO

πŸ’‘Company: Tilled

πŸ’‘Noteworthy: Caleb Avery: Started in payments at 19, door-to-door sales, evolved to angel investing and consulting.

πŸ’‘Where to find Caleb: LinkedIn


Key Insights

The Evolution of the Payment Facilitator Model

Caleb Avery discusses the complexities and the evolution of the payment facilitator (PayFac) model. Traditionally, becoming a PayFac involved a lengthy, costly process, often taking years and significant investment. This challenge inspired Caleb to innovate and create 'PayFac as a Service,' streamlining this process for businesses.

 

Developing Product Management Skills

Caleb reflects on the importance of honing product management skills in the technology sector. He emphasizes the complexities in decision-making, from feature prioritization to system design. Relying on customer feedback, intuition, and experience, Caleb underscores the pivotal role these skills play in achieving product-market fit.

 

Adapting to the Competitive Payments Landscape

Caleb observes the increasing competitiveness in the payment space, particularly noting the shift among traditional financial players. He points out that banks and acquirers are now more attuned to the vertical software landscape, recognizing both threats and opportunities in the evolving payments ecosystem. This insight showcases the dynamic nature of the industry, where established entities must adapt to remain relevant amidst the rise of new, agile competitors in the software-led payments world​​.


Episode Highlights

Caleb's Early Career and Introduction to the Payments Industry

Timestamp: [00:01:13]

Caleb Avery shares his journey into the payments industry, starting at 19 with door-to-door sales, then progressing to angel investing and consulting in vertical software businesses. This experience allowed him to understand the payments landscape deeply, from direct merchant interaction to broader industry insights. His journey highlights the importance of grassroots experience in understanding and innovating in the payments sector.

"I started my career in the payment space at 19 years old going door-to-door selling payment processing services to small business owners... over time skilled up that first business and really between that first company until I started doing a lot of angel investing and consulting with vertical software businesses."​​


Role of ISOs in Payment Distribution

Timestamp: [00:15:59]

Caleb discusses the historical role of Independent Sales Organizations (ISOs) in distributing payment solutions to small business owners in the U.S. This segment sheds light on the traditional models of payment distribution and how they have shaped the current landscape.

"Historically, ISOs and agents have been the majority of the way that payments have been distributed at least here in the US."​​


Tilled's Business Partnerships and the 'Frenemy' Concept

Timestamp: [00:13:36]

In his role at Tilled, Caleb talks about the diverse types of partnerships they foster, including banks, acquirers, processors, ISVs, and payment consultants. He touches on the unique dynamics in the payment space, describing many relationships as 'frenemies'—a blend of competition and collaboration.

"At Tilled, we've got a variety of different types of folks that we partner with... there's a lot of what I consider like frenemies, where we're all kind of competing, but we're partnering, and we're working together."​​


The Payment Facilitator Model and Its Advantages

Timestamp: [00:06:36]

Caleb elaborates on the payment facilitator (PayFac) model, popularized by companies like Stripe and PayPal. He describes the extensive vetting process and the streamlined onboarding and complex fund flow capabilities this model offers. This part emphasizes the evolving nature of payment processing and the innovative approaches being adopted.

"The payfac model... is predicated on the idea that the payment facilitator is going through this very extensive vetting process with the banks, the acquirers, the card brands to get registers of what's considered a master merchant."​​

Theme picker

Season 1

Episode 16

Crowdsourcing Your Opinion with Host Joe Casali

 

Episode Summary

In the Season 1 finale show of Wrestling Payments, Joe Casali delves into the dynamic world of financial technology and seeks audience input or crowdsourcing of the critical issues for 2024.

Joe discusses a list of important, interesting, and pressing issues with a request of the audience to suggest how the Association should direct resources and energy in 2024.

Download Episode Transcript
Cast Your Vote for Season 2 Podcast Topics

 

Key Insights

⚑Rise of Fast Payment Systems: FedNow's Impact
Joe Casali discusses the rapid growth and adoption of FedNow, emphasizing its role in expanding payment options. With over 300 participants quickly joining, FedNow represents a significant move towards faster, more reliable transactions. The dialogue revolves around the operational and strategic implications of adopting such technologies. Casali questions how institutions should adapt their policies, risk management, and compliance in response to these faster payment systems, urging listeners to consider their impact on the broader financial landscape.

 

⚑Navigating Payment Innovations Amidst Risks
The episode highlights the double-edged sword of technological innovation in the payment sector. Casali points to a recent ransomware attack affecting several credit unions as a case study for understanding the intertwined relationship between emerging technologies and their inherent risks. He calls for a robust understanding and preparation for these risks, emphasizing the need for proactive risk assessment and management strategies. The discussion extends to the broader implications for regulatory compliance and operational resilience in the face of these emerging threats.

 

⚑Regulatory Landscape: A Moving Target
Addressing the ever-evolving nature of regulations, Casali speaks on the necessity of staying informed and adaptable. With regulatory frameworks constantly shifting, organizations must be vigilant and proactive in understanding and preparing for these changes. The conversation delves into how regulations impact various aspects of payment strategies and risk management. Casali encourages listeners to stay engaged with regulatory developments to effectively navigate the complexities and ensure compliance in a dynamic environment.

 

Episode Highlights

The Crowdsourcing Initiative in Financial Services

Timestamp: [00:01:00]
Joe Casali introduces the concept of crowdsourcing for the podcast's content in 2024. He invites listeners to participate actively by voting on topics they want the podcast to cover. This participatory approach aims to shape the future episodes based on real interests and pressing questions in the financial services sector.

"So I'm going to ask for your help. Now, if you were listening earlier, I used the word crowdsource. What we're going to do is go through a few topics, discuss the pros and cons of that particular topic. And direct you to vote on the inclusion or exclusion of our focus for 2024."


The Evolution of Faster Payments and User Choices

Timestamp: [00:06:00]
Casali delves into the evolution of payment systems, particularly focusing on faster payment options like FedNow and RTP. He discusses the exponential increase in payment choices and the complexities that these new options present. The conversation underscores the importance of understanding these evolving systems to make informed decisions.

"It literally is a new choice. In my mind, it adds to the available options and I'm not sure — someone who knows math could say — but by expanding the denominator of possible choices it's added X many possible choices to all the choices."


The Rise of AI in Financial Services

Timestamp: [00:05:00]
In this segment, Joe Casali addresses the rapid adoption and implications of Artificial Intelligence (AI) in the financial services sector. He explores its applications in areas like fraud prevention and the need for industry players to understand and leverage AI's capabilities effectively.

"Just this year we've seen almost like — and I'm not a professional at this survey stuff — but the world has embraced AI for everything, and you know it comes with its own pitfalls, comes with its own advantages. But our point is, should we look at AI and is it either in its tipping point or right about around it."


Navigating the Regulatory Landscape

Timestamp: [00:10:00]
Casali discusses the shifting regulatory landscape, emphasizing the constant movement and updates in regulatory frameworks. He talks about the importance of staying informed and prepared for regulatory changes, particularly focusing on the risks and management strategies related to third-party relationships.

"What can we say about regulation? Risk management and technology is certainly something to follow. What are the regulators looking at, right? Because we know that changes from time to time, searching for what are they examining? And again, that changes from time to time."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

 

Episode 15

Storytime - Wrestling with Problems with Host Joe Casali

 

Episode Summary

In this insightful episode of Wrestling Payments, Joe Casali dives deep into the complexities and challenges of payment operations. He emphasizes the critical role of problem-solving in the industry, highlighting how essential it is for professionals to understand the rules and mechanisms of different payment systems. Joe narrates a real-life story, maintaining anonymity, to illustrate the intricate process of payments, particularly focusing on the Real-Time Payments (RTP) system.

Joe begins by explaining the fundamental flow of an RTP transaction, involving the sender, sending bank, network, receiving bank, and receiver. He details the rapid and efficient process, emphasizing the speed and precision of these transactions. The episode takes an interesting turn as Joe introduces a third-party service provider in a transaction scenario, exploring how their involvement can complicate the payment process.

The heart of the episode lies in a case study where a transaction goes awry due to a mismatch between the receiving bank's system and the RTP network. Joe explains how a seemingly straightforward RTP transaction gets complicated by additional checks and balances introduced by the receiving bank. This leads to an insightful discussion on the importance of understanding payment network rules and the pitfalls of automated systems in handling exceptions.

Download Episode Transcript

 

Guest-at-a-Glance

πŸ’‘ Host: Joe Casali

 

Key Insights

⚑The Importance of Problem-Solving in Payment Operations

In the rapidly evolving world of payments, problem-solving emerges as a crucial skill. Joe Casali discusses the changing landscape of payment operations, emphasizing the need for professionals who can navigate complex scenarios. He points out that understanding the rules and mechanics of payment systems, such as Real-Time Payments (RTP), is vital. This insight highlights how problem-solving goes beyond technical knowledge, requiring an adaptable mindset to address unforeseen challenges in payment transactions.

 

⚑Navigating Complexities in Real-Time Payments (RTP)

The episode dives into the intricacies of the RTP system, illustrating its operational flow involving senders, banks, and receivers. Joe Casali explicates the speed and efficiency of RTP transactions, but also sheds light on potential complications. A key insight is the complexity introduced by third-party service providers in the payment process. This discussion underscores the necessity for thorough understanding and coordination among all parties involved in RTP transactions, highlighting how a single mismatch can lead to significant operational challenges.

 

⚑Handling Exceptions and Automated Systems in Payment Networks

A compelling segment of the podcast revolves around a case study where an RTP transaction is disrupted by additional security measures. The episode reveals how automated systems, while efficient, can falter in handling exceptions, especially when they don't align with the payment network's protocols. This insight stresses the importance of balancing automation with human oversight. It serves as a cautionary tale about the pitfalls of over-relying on technology in payment systems, advocating for a more nuanced approach that considers the unique aspects of each transaction.

 

Episode Highlights

The Role of Operations in Payments

Timestamp: [00:01:04]

In the opening segment, Joe Casali discusses the evolving role of operations in the payments industry. He emphasizes that the key attribute sought in professionals in this field is the ability to solve problems. Joe explains that this skill is critical for those working in operations at financial institutions and third-party service providers. The industry's focus is shifting towards hiring individuals who can navigate and resolve complex issues in the payments landscape.

"One of the skills, we've done a lot of research around the new role of operations, how operations are changing, and what are the characteristics of the workers, the employees we're looking to find to work in payments."
 

Understanding Payment Flows in RTP

Timestamp: [00:04:58]

Joe takes time to explain the flow of a transaction in the Real-Time Payments (RTP) network. He outlines the roles of the sender, sending bank, the RTP network, the receiving bank, and the receiver, illustrating how a transaction moves from initiation to completion. Casali emphasizes the importance of each participant understanding their role and the flow to ensure efficient transactions.

"Sender, Sending Bank, Network, Receiving Bank, Receiver. It flows straight through. It's a message. [...] A lot of things are going on. And what the first thing going on is, is when the Sending Bank goes to send the transaction, they're making sure that there's money in the sender's account. Right? They don't want to send out a payment that doesn't have any money behind it."
 

Challenges with Third-Party Providers in Payment Transactions

Timestamp: [00:07:29]

This part of the discussion focuses on the complexities introduced when third-party service providers are involved in payment transactions. Joe shares an instance where a third party’s involvement led to complications in an RTP transaction. He points out that while third-party services can facilitate certain aspects of payments, they can also introduce unexpected challenges, especially when their systems do not align seamlessly with established payment networks.

"So in the case of this receiver, they're, I don't know if I want to say they're smaller, but they've chosen to use a third party to really run these processes."
 

Handling Exceptions in Automated Payment Systems

Timestamp: [00:14:21]

Towards the end of the episode, Joe discusses the criticality of handling exceptions in automated payment systems. He presents a scenario where an automated response to an exceptional situation led to a complex problem, underscoring the need for well-thought-out systems and processes. This part highlights the risks associated with automation in payment systems, particularly when unexpected situations arise that the system is not configured to handle effectively.

"They certainly solved it the wrong way because, and we haven't talked to this and we're not going to talk to this, but they originated an entry out of thin air. There was no authorization."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

 

Episode 14

Wrestling with Third-Party Senders with Guests Dennis Walker and Stephen Dillon

Episode Summary

In the latest episode of Wrestling Payments, host Joe Casali and guests Dennis Walker and Stephen Dillon engage in a candid conversation about the complex world of third-party sender relationships in the realm of banking and ACH payments. Drawing from their extensive experience in the industry, Dennis and Stephen share valuable insights and practical wisdom that can help financial institutions navigate this intricate landscape effectively.

The discussion kicks off with an exploration of the key factors that define third-party sender relationships. Dennis and Stephen highlight that understanding and educating the entire workforce within a financial institution is paramount. They stress the importance of being proactive in risk management, recognizing red flags, and implementing preventive measures to maintain the integrity of ACH transactions.

Throughout the conversation, they emphasize the significance of regular annual reviews and check-ins with customers, especially the larger ones. These reviews serve as a crucial opportunity to assess any material changes in a customer's business, their sophistication level, and their evolving risk profile. By staying engaged and informed, financial institutions can adapt their risk management strategies to meet the evolving needs of their customers effectively.

Download Episode Transcript

Guest-at-a-Glance

πŸ’‘ Name: Stephen Dillon, APRP, AAP, CTP and Dennis Walker, CIA, CISA, CRCM, CFSA, CRMA

πŸ’‘ What they do: Stephen: Vice President

πŸ’‘ Company: Stephen: Eastern Bank

πŸ’‘ Noteworthy: Stephen Dillon boasts a career in banking and treasury services, with a keen understanding of the intricacies of ACH payments and risk management. / Dennis Walker possesses a diverse background in banking and financial services, bringing extensive experience and knowledge to the discussion on third-party sender relationships.
 

Key Insights

⚑Proactive Approaches to Spotting Third-Party Senders in Banking

Dennis and Stephen discuss strategies for identifying third-party senders in the banking industry. They highlight the importance of keyword analysis, company name checks, and reviewing client portfolios to spot potential third-party senders. Additionally, they stress the need to leverage annual reviews and customer engagement to stay vigilant in risk management.

 

⚑Balancing Risk Mitigation and Customer Engagement with Third-Party Senders

Dennis, Stephen, and Joe underscore the significance of robust risk management practices and consistent customer engagement in dealing with third-party senders. They emphasize conducting risk assessments, due diligence, and maintaining open communication with clients. These practices help banks and financial institutions safeguard their interests and build trust with customers.

 

⚑Deciphering the Gray Areas: Classifying Third-Party Senders in Banking

Stephen and Joe explore the complexity of classifying entities as third-party senders in the banking sector. They dive into scenarios where the distinction may not be straightforward, particularly in cases involving common ownership or management. The discussion highlights the need for institutions to make informed decisions and apply due diligence when determining third-party sender status.
 

Episode Highlights

Determining Third-Party Senders in the Banking Industry

Timestamp: [00:20:20]

In this part of the podcast discussion, Dennis and Stephen highlight the challenges and strategies involved in identifying third-party senders in the banking industry. They stress the importance of conducting thorough due diligence, asking key questions about a customer's business, and looking for red flags that may indicate third-party sender activity.

"So they've got ACH with you. They fall into one of those categories. And maybe go visit their website. See if their website offers payment services to their clients. Maybe look at the online banking setup at your financial institution and see if their ACH service is set up with a variety of company names or company IDs being used under it. These can be indicators." - Stephen
 

Mitigating Risks and Ensuring Compliance in Banking

Timestamp: [00:25:11]

Dennis and Stephen discuss the critical importance of managing risks and ensuring compliance when dealing with third-party senders. They emphasize the need for ongoing reviews, client questionnaires, and strong risk management practices. The conversation underscores that it's essential for banks to work closely with clients and educate them about regulatory requirements.

"If the customers aren't willing to work with you, those are the red flags. If you've corrected them and say, you can't do this, you can't originate this [...] Those are some of the red flags that you can kind of say, 'Hey, there's something different here.'" - Dennis
 

Real-Life Scenarios: Third-Party Sender or Not?

Timestamp: [00:33:49]

Stephen and Dennis dive into real-life scenarios that challenge the distinction between third-party senders and originators. They discuss scenarios involving property management companies and subsidiaries of conglomerates. While these situations may seem complex, they clarify that common ownership and management can determine whether an entity is a third-party sender or not.

"I would say this, they are a third-party sender. The condo owner paying their monthly condo fee to the condo association, and the management company is the third party." - Stephen
 

The Value of Collaboration and Resources in Banking

Timestamp: [00:37:17]

In this section, the conversation shifts to the importance of collaboration and resources within the banking industry. Dennis Walker and Stephen Dillon highlight the role of industry organizations like NEACH in providing valuable networking opportunities and resources to professionals navigating complex regulatory landscapes.

"Not to just give you a plug, but really, NEACH as a resource, such a valuable resource. [...] It's, as Dennis says, it's the frontline people, the people who are the operations side, the upfront side, and talking things through, it's hugely helpful." - Stephen

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

 

Episode 13

Opening Matches - What's in the News with Host Joe Casali

Episode Summary

In this episode of Wrestling Payments, Joe Casali delves into the evolving landscape of real-time payments. He highlights the recent developments at The Clearing House, emphasizing the organization's efforts to enhance transaction speeds. Casali also discusses the integration of new hires in the payment industry, underscoring their role in bringing fresh perspectives and innovative approaches to traditional financial systems.

The conversation shifts to regulatory changes, focusing on the Consumer Financial Protection Bureau's (CFPB) new rules for digital wallets. Casali explains the implications of these regulations for consumers and businesses, outlining the balance between security and convenience. He also discusses Zelle's recent challenges with fraud, detailing their strategies to increase reimbursements and implement additional safeguards.

Lastly, the episode features insights on Keith Melton's contribution to the RTP network. Casali explores Melton's strategies for future growth and the potential impact of these plans on the payments industry. He also touches on CFPB's proposals concerning technology companies in the financial sector, highlighting the need for a nuanced understanding of these new regulations.

Download Episode Transcript

 


Key Insights

 

⚑Innovation in Real-Time Payments at The Clearing House

The episode highlights significant innovations at The Clearing House, particularly in the realm of real-time payments. Casali discusses how these advancements are reshaping the landscape of financial transactions, with a focus on increasing speed and efficiency. He also delves into the role of new hires in the industry, emphasizing their contribution to fostering innovative approaches in traditional banking systems.

 

⚑Impact of CFPB's New Rules on Digital Wallets

A major point of discussion revolves around the Consumer Financial Protection Bureau's (CFPB) new regulations for digital wallets. Casali explains the potential effects these rules have on both consumers and businesses, balancing the need for security with the convenience of digital transactions. He also addresses the broader implications of these regulations on the financial industry.

 

⚑Zelle's Strategies Against Rising Fraud

The episode sheds light on Zelle's recent measures to combat increasing incidents of fraud. Casali examines Zelle's response, which includes enhanced reimbursement policies and the implementation of new safety features. He provides a detailed analysis of these strategies, considering their effectiveness and the ongoing challenges in ensuring secure digital transactions.

 

Episode Highlights

Keith Melton's Joining the Clearing House

Timestamp: [00:02:00 - 00:04:00]

Joe Casali discusses Keith Melton joining the Clearing House as Senior Vice President and RTP Strategic Program Management. He highlights Melton's background at the Federal Reserve and IBM, focusing on his innovative approach. Casali speculates on the potential impact of Melton's hiring on the RTP network and the Clearing House's future.

"Keith comes from the Federal Reserve System; prior to that, he comes from IBM. And he's all about innovation."

 

New CFPB Regulation for Digital Wallets

Timestamp: [00:05:00 - 00:08:00]

The conversation turns to the Consumer Financial Protection Bureau's (CFPB) new regulation aimed at large non-bank technology providers, particularly digital wallet and P2P payment apps. Casali discusses how this regulation, affecting companies with over 5 million transactions, aims to level the playing field between tech companies and financial institutions.

"This rulemaking proposal is to put a little more requirements and put large technology P2P digital wallet companies under regulation with the CFPB."

 

Zelle's Response to Increased Fraud

Timestamp: [00:11:00 - 00:14:00]

Casali addresses the rise in fraudulent activities on Zelle. He notes how scammers exploited the system, leading to significant financial losses for users. Casali then covers Zelle's response, including starting reimbursements for fraud victims from November 13 and introducing additional fraud controls.

"Zelle, feeling the pressure, began reimbursing customers for many of those fraudulent transactions. Some of them have already been worked out."

 

Improvements in Zelle’s Fraud Control Measures

Timestamp: [00:14:00 - 00:16:00]

Continuing on the topic of Zelle, Casali delves into the network's steps to improve its service in response to fraud. He describes the introduction of additional verification steps and the sophisticated technology employed by Early Warning, the company behind Zelle, to enhance transaction security.

"Zelle has also Early Warning, has also taken steps to improve the product. If you're a Zelle user, you may have seen there's new additional screens: 'Are you sure?’ ‘Do you know this person?'"


To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 12

Unlocking Career Growth in Payments with NEACH U with Guest Mark Dixon


Episode Summary

In this episode of Wrestling Payments, host Joe Casali sits down with Mark Dixon, the Vice President of Education at NEACH. Mark dives into his journey in the banking and payment sector, highlighting his passion for the industry and the intersections of technology, disruption, and the future of banking. He emphasizes the importance of payments in various business sectors and the excitement of navigating the ever-evolving landscape.

Mark introduces "NEACH U," a reimagined educational platform designed to cater to various professionals in the payment space. From operational roles to treasury management, compliance, and risk management, NEACH U aims to provide individualized learning paths for all. The platform's goal is twofold: to benefit organizations by enhancing their employees' knowledge and to foster professional development for individuals.

Set to launch in 2024, NEACH U promises to be a transformative tool for payment professionals, guiding them towards the next steps in their careers and offering valuable insights into the world of payments.

Download Episode Transcript



Guest-at-a-Glance

πŸ’‘ Guest: Mark DIxon

πŸ’‘What he does: VP of Education

πŸ’‘Company: NEACH

πŸ’‘Noteworthy: Mark Dixon: Vice President of Education at NEACH, passionate about payment evolution.

πŸ’‘Where to find Mark: LinkedIn

 

Key Insights

⚑Mark Dixon's Passionate Journey in Payments

Mark Dixon's professional trajectory in the banking and payment sector is both intriguing and inspiring. Starting his career in banking, he didn't initially envision a future in the sector. However, as he dived deeper, especially into electronic banking, he discovered a fervent passion for payments. Mark's enthusiasm is not just about the technicalities of payments but also about understanding their intersection with various business sectors and the role of technology.

 

⚑Headline: Introduction of NEACH U: A Game-Changer in Payment Education

NEACH U is Mark's ambitious project, aiming to revolutionize payment education. This platform is not just another educational tool; it's designed to offer individualized learning paths for professionals in the payment space. Whether one is in operational roles, treasury management, compliance, or risk management, NEACH U promises a tailored learning experience.

 

⚑NEACH U's Vision: Individual Growth and Organizational Excellence

Mark emphasizes that NEACH U is more than just a learning platform; it's a roadmap for professional growth. Recognizing the diverse paths in the payment space, from operational to strategic roles, NEACH U is designed to guide professionals based on their unique needs and aspirations. The platform will not only serve as a knowledge hub but also as a catalyst for career advancement.

 

Episode Highlights

The Genesis of Mark's Interest in Payments

Timestamp: [00:02:58]

Mark Dixon dives into the origins of his interest in the payment sector. He traces back to his time in electronic banking, where he found a genuine passion for payments. This passion was further ignited when he attended various NICHA events and sessions, which played a pivotal role in shaping his perspective on the payment side of things.

"I had gotten that into payments back in 2015, and I actually attended all of NICHA's stuff. I did all the AAP boot camps, the on demand sessions. That's what ignited my passion for the payment side of things."

 

Mark's Role at NEACH and His Vision for Education

Timestamp: [00:01:58]

Mark discusses his role at NEACH, emphasizing his responsibilities in the educational department. He talks about developing educational programs, delivering sessions on various topics, and finding innovative ways to present content to cater to different learning styles.

"I work in our educational department and offerings. So what that involves is developing educational programs, delivering different sessions and different topics to our members and to different audiences that we serve."

 

The Intersection of Banking, Payments, and Technology

Timestamp: [00:05:34]

Mark highlights the crucial role of payments in the business sector and how it intersects with technology. He emphasizes the importance of understanding the future of the industry, banking, and payments, and how technology plays a pivotal role in shaping this future.

"And the more I've gotten into payments, I start to see the intersection between different business areas and different business sects. And there's so much that money movement is so crucial, and yet we kind of integrate it into all these different areas and really don't focus on it. On top of that, you have all the technology considerations well. So my intersection I would say is technology disruption, what's going on in the future of the industry and banking and payments."

 

NEACH U's Comprehensive Approach to Learning

Timestamp: [00:07:50]

Mark introduces the concept of NEACH U, describing it as a reimagined educational platform. He explains the various components of NEACH U, emphasizing its design to cater to individual learning paths, from operational roles to treasury management and beyond.

"So, NEACH U is designed to help you get there. What we're hoping to do is have a path for our traditional operational audience. The folks that are - I'm working in operational roles, I want to learn more about payments. I want to understand what I need do in order to get my job accomplished, but I want to be a resource for my organization."
 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 11

Risk Management in Payments with Guest Sean Carter


Episode Summary

In this episode, Joe Casali sits down with Sean Carter, the top man at NEACH and NEACH Payments Group. They dive deep into the world of risk management in payments. Sean emphasizes the power of interpersonal skills and the value of curiosity in the industry.

The talk shifts to the intricate dance between Enterprise Risk Management (ERM) and Strategic Risk Management (SRM). Both play pivotal roles in shaping the future of payments. Sean shares insights on how these concepts intertwine and their impact on the broader payment landscape.

Tune in to grasp the nuances of risk management from an industry leader. It's a conversation packed with expertise and actionable insights.

Download Episode Transcript


Guest-at-a-Glance

πŸ’‘ Name: Sean Carter

πŸ’‘ What he does: President & CEO

πŸ’‘ Company: NEACH

πŸ’‘ Noteworthy: Sean Carter: Newly minted Accredited Payments Risk Professional (APRP).

πŸ’‘ Where to find Sean: LinkedIn

 

Key Insights

⚑The Power of Imagination in Risk Management

Sean Carter emphasizes the importance of operations personnel in risk management. These individuals possess a wealth of institutional knowledge, allowing them to predict potential issues based on past experiences. Sean suggests that a combination of strong communication skills and the ability to envision various scenarios (imagination) can be invaluable. This imaginative foresight helps in anticipating challenges, especially those not immediately obvious.

 

⚑The Role of Interpersonal Skills in Operations

Sean highlights the significance of interpersonal skills in preventing blindsides in operations. Building good relationships across departments and consistently asking questions can prevent unexpected challenges. Being inquisitive and maintaining open channels of communication can preemptively address potential issues. Moreover, making others feel important can lead to more open sharing of information.

 

⚑Understanding Risk Appetite vs. Risk Tolerance

The distinction between an organization's risk appetite and risk tolerance is crucial. While risk appetite is the overall level of risk an organization is willing to accept, risk tolerance pertains to the degree of risk they're willing to take for a specific goal. Effective communication is essential to ensure everyone understands these concepts, aligning individual actions with the organization's broader risk strategy.

 

Episode Highlights

Introduction to the Podcast and Risk Management

Timestamp: [00:01:09]

Joe Casali introduces the podcast and the guest, Sean Carter. They set the stage for the episode's theme, which revolves around risk management in payments. Joe mentions his recent exposure to new risk management concepts, prompting Sean to share his insights.

"I do think it's gonna be an interesting conversation, and that's what it is. It is a conversation with teeing it up. We're hoping that the conversation will continue, whether it's in Members Corner, LinkedIn, or in some comments on the podcast themselves. We really want to hear what your thoughts are around this, and it is about risk management and payments."

 

The Challenge of Unforeseen Risks

Timestamp: [00:08:47]

Sean Carter dives into the challenges that arise when unforeseen risks emerge. He discusses a situation where an employee didn't follow the procedure, leading to a breakdown. The risk was known, but how it manifested was unexpected. This highlights the importance of understanding both known and unknown risks.

"And so what they didn't know was that an employee was gonna do that. It really wasn't taken into account, probably that this is something that could have happened. The risk itself was known, but how it was gonna represent itself was the unknown."

 

The Importance of Communication in Risk Management

Timestamp: [00:12:47]

Sean emphasizes the significance of effective communication in risk management. He talks about the dangers of information silos and the need for open conversations. Ensuring everyone is aligned with the organization's risk appetite and risk tolerance is crucial.

"So that's the same in kids and adults. Everybody goes with their own, 'Hey, here's my career path. Here's what I want to become at a financial institution. How does that fit into the overall success of the organization?"'

 

The Role of Interpersonal Skills in Operations

Timestamp: [00:23:39]

Sean highlights the value of interpersonal skills in operations. Building relationships across departments and being inquisitive can prevent blindsides. Making others feel important can lead to more open sharing of information, which is crucial for effective operations.

"I think that's just somebody that would have good relationships across the bank is probably not gonna get blindsided. The other thing could be just somebody that's always asking questions, 'Hey, what's going on with the IT people?"

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 10

Something Payment Ops Need to Know About ISO 20022 with Host Joe Casali

Episode Summary

In this episode, Joe Casali from NEACH dives deep into the world of ISO 20022, the international standard for payments messaging. While ISO 20022 might be a fresh face in the US, its significance can't be understated. Drawing a unique parallel, Joe likens the fervor for ISO 20022 to that of a "mark" in wrestling - someone deeply passionate and invested in the industry's narratives. As the conversation unfolds, it's clear: Joe is all in on ISO 20022, seeing its potential to reshape the payments landscape.

Download Episode Transcript


Guest-at-a-Glance

πŸ’‘ Name: Joe Casali

πŸ’‘ What he does: Host

πŸ’‘Company: NEACH / Website


Key Insights

⚑ The Rise of ISO 20022 in Payment Systems

ISO 20022, an international standard for payments messaging, is gaining traction globally. While it's not entirely new, it's becoming more prominent in the US. Various organizations, from SWIFT to the Federal Reserve, are adopting ISO 20022 for their messaging systems. The Clearinghouse's RTP and the Federal Reserve's Fed Now both utilize versions of ISO 20022, showcasing its versatility and widespread acceptance.

 

⚑ The Debate Over "Rich Data"

There's a buzz around ISO 20022's ability to include "rich data" in its messages. However, Joe Casali challenges this notion. While ISO 20022 can carry additional data, the depth and richness of this data are up for debate. For instance, while it can include a URL or a 140-character message, questions arise about the security and practicality of such features.

 

⚑ ISO 20022 vs. EDI: A New Era of Messaging

Comparing ISO 20022 to Electronic Data Interchange (EDI), Joe highlights the evolution of computer-to-computer communication in payments. While EDI had its challenges, ISO 20022 offers a more streamlined approach. Companies can send payment messages directly to financial institutions, ensuring smoother transactions and reducing the need for manual interventions.

 

Episode Highlights

​​The Concept of a "Mark" in Wrestling and Payments

Timestamp: [00:01:34]

Joe Casali introduces the term "mark" from the world of professional wrestling. A "mark" is someone who is deeply passionate about wrestling and its narratives. Joe cleverly likens this term to those who are enthusiastic about ISO 20022, suggesting that he himself is a "mark" for this payment messaging system.

"Professional wrestling or at a carnival. This came out of a carnival back in the day because they would literally put a chalk mark on the customer's back to say he's the mark, he's our target. [...] I am a mark, I'm a mark for ISO 20022."

 

The Evolution of EDI and ISO 20022

Timestamp: [00:07:33]

Joe discusses the history and evolution of Electronic Data Interchange (EDI) and contrasts it with ISO 20022. He emphasizes the ideal of computer-to-computer communication, where transactions are seamless and require no manual intervention.

"My accounts payable go into your accounts receivable. My company knows I paid you. Your company knows you got paid. No one has to press a button. No one has to touch anything. No one has to rekey anything that's the ideal straight through the world."

 

The Challenge of "Rich Data" in ISO 20022

Timestamp: [00:11:58]

Joe challenges the popular notion that ISO 20022 can seamlessly incorporate "rich data" into its messages. He raises concerns about the depth and utility of such data, especially when it comes to security and practicality.

"The claim you hear when they're talking about ISO 20022 is that it includes rich data. [...] Maybe I'm overthinking this or not thinking this enough, but the rich data I'm having trouble with."

 

The Global Adoption of ISO 20022

Timestamp: [00:07:56]

Joe highlights the increasing global adoption of ISO 20022 in various payment systems. From SWIFT to the Federal Reserve, many organizations are embracing this international standard, indicating its growing importance in the payments landscape.

"RTP back in 2017, RTP said, we're gonna come up with an instant payment network, and we're gonna use as our messaging system a version of ISO 2 0 0 22. [...] SWIFT is a messaging system that says we need to pay someone in a foreign country. We have the network to communicate that message. There's no settlement involved, but they're now using ISO 20022 as their messaging system; they adopted it."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 9

Instant Payment Strategic Dilemma with Guest Kevin Olsen

Episode Summary

In this episode of Wrestling Payments, host Joe Casali sits down with Kevin Olsen, the Payments Professor. Kevin shares his unexpected journey into the payments field, sparked by a job loss during the dot-com bubble. His path led him to become a leader in the industry, teaching others about the intricacies of electronic payments.

The conversation shifts to the creation of Kevin's podcast, the Payments Podium. Kevin reveals how a casual comment from a colleague led him to start recording his discussions about the payments industry. He shares his approach to finding guests, focusing on individuals with years of experience and knowledge to share.

The episode wraps up with a discussion about the future of payments, particularly the importance of instant payment capabilities. Kevin emphasizes the need for the U.S. to compete globally in this area. This episode is a must-listen for anyone interested in the evolution of the payments industry and the power of lifelong learning.

Download Episode Transcript


Guest-at-a-Glance

πŸ’‘ Name: Kevin Olsen

πŸ’‘ What he does: The Payments Professor

πŸ’‘ Company: Payments Professor

πŸ’‘ Noteworthy: Kevin Olsen, a tech graduate turned teacher, found his way into the payments industry by accident during the dot-com bubble burst.

πŸ’‘Where to find Kevin: LinkedIn / Podcast

 

Key Insights

⚑ The Birth of Payments Podium

Kevin Olsen shares the story behind his podcast, the Payments Podium. A casual comment from a colleague inspired him to record his discussions about the payments industry. He began by inviting people he knew to be guests and then expanded his network by asking each guest to recommend others. This approach has led to a wide variety of guests, each with their own unique experiences and insights to share. The podcast has become a valuable resource for anyone interested in the payments industry.

 

⚑ The Importance of Fun and Joy in Learning

Kevin discusses the importance of making learning fun, especially when it comes to complex topics like electronic payments. He emphasizes the effectiveness of 'edutainment,' a blend of education and entertainment, in facilitating learning. He also highlights the importance of bite-sized, easily digestible content that busy professionals can revisit and relearn at their own pace.

 

⚑ The Future of Payments

The conversation concludes with a discussion about the future of payments. Kevin underscores the need for the U.S. to develop instant payment capabilities in order to compete globally. He believes that staying abreast of changes in the industry is crucial for success and that financial institutions must strive to be more than just 'afloat' – they should aim to lead.

 

Episode Highlights

The Role of Strategy in Operations

Timestamp: [00:10:27]

In a deep dive into the role of strategy in operations, Kevin Olsen and Joe Casali discuss the importance of strategic thinking at all levels of an organization. Kevin emphasizes that strategy isn't just for the boardroom; even senior operations staff can contribute to strategic planning.

"People learn best in one of two states. Fear and joy. The other thing is these people with busy schedules, juggling a lot of balls, make bite-size [decisions], make it easy for them to be able to ingest, make it something that they can over time revisit. But on the other side is that board. The other side is the executive management team."

 

The Power of Asking Questions

Timestamp: [00:16:27]

Kevin shares his approach to learning and growth in the industry, emphasizing the power of asking questions. He encourages listeners to follow industry leaders they admire and to not be afraid to ask questions.

"So learn how you learn. Follow the people in the industry who you want to be like. If you wanna be like them, you follow 'em. If you don't wanna be like them, don't follow 'em and ask the questions."

 

The Evolution of the Payments Podium

Timestamp: [00:20:15]

Kevin shares the evolution of his podcast, the Payments Podium. He talks about how he started by asking his friends to be guests and then expanded his network by asking each guest to recommend others.

"So the first thing I did was I started asking my friends. Hey, can you guys be on this podcast? Can we talk about this next thing?"

 

The Importance of Instant Payment Capability

Timestamp: [00:22:45]

In a discussion about the future of payments, Kevin emphasizes the need for the U.S. to develop instant payment capabilities to compete globally.

"No doubt in my mind we have to have instant payment capability in the U.S. If for no other reason, but to compete globally."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 8

Instant Payment Conspiracy Theories with Guests Sean Carter and Mark Dixon

Episode Summary

In this episode of Wrestling Payments, host Joe Casali, along with guests Sean Carter and Mark Dixon from NEACH, dive into the world of payment systems. They tackle the pressing issues of misinformation and conspiracy theories in the payment industry. Carter, NEACH's president, views these as outside interference, while Dixon, Vice President of Education, sees them as a pulse of public sentiment.

The trio also discusses the concept of banking as a service, the role of financial institutions in supporting FinTech, and the importance of understanding disclosures when dealing with apps like Venmo and Cash App. They debunk the rumor of the government switching all benefits to FedNow and forcing every institution to join the platform.

Lastly, they address the theory of FedNow being the government's new cryptocurrency set to eliminate cash. They clarify that FedNow transactions are in US dollars, not digital dollars and that laws would need to change before a digital dollar could be implemented. Tune in for a deep dive into these topics and more.

Download Episode Transcript

 

Guest-at-a-Glance

πŸ’‘ Name: Sean Carter and Mark Dixon

πŸ’‘ What they do: President & CEO / Vice President-Education

πŸ’‘ Company: NEACH

πŸ’‘ Noteworthy: Sean Carter, President and CEO of NEACH, is a seasoned leader in the payment industry. He's known for his keen insights on misinformation and its impact on the payment system. Mark Dixon, Vice President of Education at NEACH, is a thought leader in the payment space. He's recognized for his understanding of the evolving landscape of banking and financial services.

πŸ’‘Where to find them: Sean: LinkedIn / Mark: LinkedIn

 

Key Insights

⚑ Misinformation as a Pulse of Public Sentiment
Misinformation in the payment industry is viewed differently by our guests. Sean sees it as outside interference, a tool used by some to confuse and scare the public for their gain. Mark, on the other hand, perceives it as a pulse of public sentiment, a reflection of what people are thinking and feeling about the payment space. This difference in perspective highlights the complexity of dealing with misinformation and the need for a nuanced approach.

 

⚑ The Role of Financial Institutions in Supporting FinTech
Mark discusses the concept of banking as a service. He highlights how proactive institutions are entering this space, backing FinTech partners and providing support. He emphasizes the importance of understanding disclosures when dealing with apps like Venmo and Cash App. This insight underscores the evolving landscape of banking and financial services and the need for consumers to be informed.

 

⚑ Debunking the Rumor of FedNow
The podcast addresses the rumor of the government switching all benefits to FedNow and forcing every institution to join the platform. The hosts clarify that FedNow transactions are in US dollars, not digital dollars and that laws would need to change before a digital dollar could be implemented. This insight dispels misconceptions about FedNow and emphasizes the importance of accurate information in the payment industry.

 

Episode Highlights

Introduction and Views on Misinformation

Timestamp: [00:00:48]

In the opening segment, host Joe Casali introduces the guests, Sean Carter, and Mark Dixon, and poses a question about their views on misinformation in the payment industry. Carter views it as outside interference, while Dixon sees it as a pulse of public sentiment. This sets the stage for the discussion that follows.

"Sean Carter, president and CEO of NEACH, and I see this as outside interference. I think people have things to gain by sharing misinformation, whether it's, you know, not another payment system over one over the other, but by getting people confused and scared. [...] Mark Dixon. I'm the Vice President, Education here at NEACH, and I would say it's probably somewhat like a booing in the crowd, but I think of it as a pulse as to how people are thinking and what they're feeling related to the payments space and what's happening."

 

Central Bank Digital Currencies

Timestamp: [00:07:05]

The guests delve into the topic of Central Bank Digital Currencies (CBDCs), discussing their potential uses and the challenges they pose, such as privacy concerns. They emphasize that CBDCs are still experimental and not yet in practice in the US.

"They worked on the mechanics. How would the program work? How could we process Central Bank Digital Currencies? The Federal Reserve Bank system itself is doing some research around how would the Central Bank digital currency help with the exchange." - Joe

 

FedNow and the Rumor of Government's New Cryptocurrency

Timestamp: [00:16:14]

The hosts debunk the rumor that FedNow is the government's new cryptocurrency set to eliminate cash. They clarify that FedNow transactions are in US dollars, not digital dollars and that laws would need to change before a digital dollar could be implemented.

"It is a bank to FedNow to bank service, just like a check, just like an ACH transaction. Okay, just like a wire transfer. These payments are happening today. It's no different." - Joe

 

Banking as a Service

Timestamp: [00:28:49]

Mark discusses the concept of banking as a service, highlighting its influence on the industry. He emphasizes the importance of understanding disclosures when dealing with apps like Venmo and Cash App.

"So you have proactive institutions that are entering that space, and they are backing like a FinTech partner. So I'm technically banking with FinTech. But I'm powered and supported by the financial institution."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 7

Wrestling with Risk Management of ACH Originators with Guests Nanci McKenzie and James Rowe

Episode Summary

In this episode of Wrestling Payments, host Joe Casali welcomes Nanci McKenzie and James Rowe from Affirmative Technology. They dive into the challenges of creating a risk rating for originators in the payments industry.

The conversation highlights the importance of risk management in financial institutions. Nanci and James discuss the need for automated solutions to handle the increasing volume of transactions. They emphasize that manual methods and spreadsheets are no longer sufficient. The discussion also touches on the role of regulators and the pressure they put on institutions to have robust risk management systems in place.

The episode concludes with a look at the broader economic landscape. James, an economist, shares his insights on the potential impact of rising interest rates and the debt ceiling issue on financial institutions. He also offers his perspective on the current state of the economy and its implications for banks. This episode is a must-listen for anyone interested in the intersection of risk management and the payments industry.

Download Episode Transcript

 

Guest-at-a-Glance

πŸ’‘ Name: Nanci McKenzie and James Rowe

πŸ’‘What they do: Executive Vice President of Compliance and Product Strategy and Chairman of the Affirmative Technology Board

πŸ’‘Company: Affirmative Technologies

πŸ’‘Noteworthy: An industry veteran, Nanci McKenzie is known for her expertise in risk management and compliance in the payments industry. / An economist by training, Rowe specializes in leveraging data analytics to solve key business problems in the financial sector.

πŸ’‘ Where to find them: Nanci: LinkedIn|James: LinkedIn

 

Key Insights

⚑Automated Risk Rating for Originators

Wrestling Payments delves into the need for automated risk rating for originators in the payments industry. Nanci and James discuss how their tool, Navigator, can provide accurate ratings for originators based on their transaction history. This system allows financial institutions to prioritize their focus on high-risk originators, enabling efficient risk management. The tool also allows for monitoring originators' risk transition, providing valuable insights into their business activities.

 

⚑Embracing Data Analytics

James, an economist by training, emphasizes the importance of embracing data analytics in financial institutions. He demystifies terms like AI, machine learning, and big data, explaining that these are simply automated statistical techniques that have been around for decades. James encourages financial institutions not to be intimidated by these terms but to leverage them to make effective decisions.

 

⚑Regulatory Pressure and Risk Management

The podcast also highlights the increasing regulatory pressure on financial institutions to have robust risk management systems. Nanci points out that regulators are asking institutions how they are risk grading their customers and are taking enforcement actions based on their findings. This underscores the importance of efficient risk management systems, such as the one provided by Affirmative Technologies.

 

Episode Highlights

The Importance of Risk Management

Timestamp: [00:12:02]

The conversation delves into the essence of risk management in financial institutions. Nanci explains the need to identify risks and implement controls to mitigate them. She emphasizes the importance of automation and business intelligence in managing risks effectively.

"Risk management is just the need to identify what those risks are and to determine, do I have the controls in place to mitigate those risks into a more acceptable level so that my financial institution can be more confident in knowing that we're gonna limit the amount of risks."

 

The Role of Data Analytics

Timestamp: [00:04:11]

James, an economist, discusses his background and the role of data analytics in solving key business problems. He shares his experience at Capital One, where data analytics was used to identify and solve business problems.

"I specialize in leveraging data and data analytics in a way that helps businesses solve important problems. [...] What Capital One did was apply data analytic techniques to help identify and solve key business problems."

 

The Impact of Economic Variables on Financial Institutions

Timestamp: [00:36:25]

James provides insights into the potential impact of economic variables such as interest rates and the debt ceiling issue on financial institutions. He explains how increases in interest rates could strain the balance sheets of banks.

"Continued increases in interest rates are really gonna put a lot of strain on balance sheets of banks because [...] when interest rates go up, that government debt becomes worth less."

 

The Role of the Board in Risk Management

Timestamp: [00:32:07]

The discussion turns to the role of the board in risk management. Nanci emphasizes that while the board can delegate risk management responsibilities to a committee, they are ultimately responsible for the risks of the institution.

"They are ultimately responsible for the risks of the institution overall. There is no getting around that. It is their responsibility, and they need to know what is going on under their noses."

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Bonus Episode 3

Risk Management in Payment Processing with Guest Nanci McKenzie

Episode Summary

In this episode of Wrestling Payments, host Joe Casali engages in a rich conversation with Nanci McKenzie, Executive Vice President of Compliance and Product Strategy at Affirmative Technologies. Nanci shares her extensive experience in the payments industry, highlighting the importance of risk management in payment processing. She emphasizes the need for financial institutions to scrutinize their payment processors and FinTech partners as closely as they do their vendors, given the potential impact of security incidents.

The conversation then shifts to the evolving landscape of electronic payments. Nanci provides her insights on the future of the industry, particularly the rise of faster payments and app-based solutions. She also discusses the role of third-party payment processors in catering to the banking needs of the younger generation.

Finally, Nanci underscores the importance of consumer education in mitigating financial fraud. She advocates for a collective approach to risk management, where everyone from operations to customer service representatives plays a role in identifying and mitigating risks.

Download the Episode Transcript
 

Guest-at-a-Glance

πŸ’‘ Name: Nanci McKenzie

πŸ’‘What she does: Executive Vice President of Compliance and Product Strategy

πŸ’‘Company: Affirmative Technologies

πŸ’‘Noteworthy: Nanci holds an AAP, an APRP, and a Juris Master's degree in Financial Regulation and Compliance. She is currently pursuing a Master's in Legal Studies with a focus on financial regulatory compliance and cybersecurity and data privacy at Thomas R. Kline's College of Law, Drexel University. Nanci has a rich history in the payments industry, starting as a part-time teller and transitioning into FinTech. She is passionate about risk management and emphasizes the importance of consumer education in preventing financial fraud.

πŸ’‘ Where to find Nanci: LinkedIn

 

Key Insights

⚑The Importance of Risk Management in Payment Processing

Nanci emphasizes the importance of risk management in payment processing. She explains the cycle of risk assessment, policies, procedures, audits, reviews, and monitoring. She likens it to a rinse-and-repeat process, similar to shampooing. This insight underscores the need for financial institutions to scrutinize their payment processors and FinTech partners as closely as they do their vendors, given the potential impact of security incidents.

 

⚑The Future of Electronic Payments

Nanci provides her insights on the future of the industry, particularly the rise of faster payments and app-based solutions. She discusses the evolution of electronic payments, the ACH developments in app-based solutions, and the introduction of real-time payments. This insight highlights the changing landscape of the payments industry and the need for financial institutions to adapt.

 

⚑The Role of Consumer Education in Mitigating Financial Fraud

Nanci underscores the importance of consumer education in mitigating financial fraud. She advocates for a collective approach to risk management, where everyone from operations to customer service representatives plays a role in identifying and mitigating risks. This insight emphasizes the need for continued consumer education and the role of various stakeholders in preventing financial fraud.

 

Episode Highlights

The Role of Financial Institutions in Risk Management

Timestamp: [00:21:48]

Nanci discusses the crucial role of financial institutions in risk management. She emphasizes the importance of due diligence when dealing with payment processors and FinTech partners, highlighting the potential impact of security incidents. Nanci also underscores the need for regular audits and risk assessments, not just within the financial institution but also among their third-party service providers.

"We need to make certain that our risk management and the due diligence behind that is going to be in depth to make certain that it is a person that you still want to do business with. And if you are going to be working with a payment processor, and they're not doing a SOC2 [...] Are they doing anything? Is there any risk management program at all?"


The Evolution of Electronic Payments

Timestamp: [00:25:12]

Joe and Nanci delve into the evolution of electronic payments. They discuss the developments in app-based solutions, the introduction of real-time payments, and the future of the industry. Nanci also shares her predictions for the next decade, hinting at the rise of faster payments.

"I see a path that we are definitely on, and we have been talking about faster payments for several years now. And as a matter of fact, as we're recording this, RTP has been out there for seven years; It's a long time. It took ACH a long time to take a grip of all of the industry and send it off soaring."


Nanci McKenzie's Journey in the Payments Industry

Timestamp: [00:01:36]

In the opening segment of the podcast, Nanci talks about her academic pursuits, highlighting her focus on financial regulation and compliance. In addition, Nanci shares her journey in the payments industry. Starting as a part-time teller, she has climbed the ranks to become the Executive Vice President of Compliance and Product Strategy at Affirmative Technologies.

"I've been doing this for just over 37 years, and I started as a drive-up, part-time teller at a commercial bank in Sioux City, Iowa. So then I went from commercial banking. I was a vault teller for a while where armored car carriers were my customers."


The Importance of Consumer Education

Timestamp: [00:32:03]

Towards the end of the podcast, Nanci emphasizes the importance of consumer education in preventing financial fraud. In addition, she advocates for a collective approach to risk management, where everyone from operations to customer service representatives plays a role in identifying and mitigating risks.

"Everybody needs to be involved in risk management. So operations, they see the risk. So do the call center people, and so do the tellers. So do the branch managers. So do the fraud and risk people and the compliance and audit people. We all see; IT sees it. We all need to be working together and talking, and we should be, at least annually, sitting around and discussing what are our new risks. Let's identify those, and how are we going to mitigate them?"

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Bonus Episode 2

PMC 2023 - Behind the Scenes with Guest Peter Tapling

Episode Summary

In this episode of Wrestling Payments, host Joe Casali sits down with Peter Tapling from PTAP Advisory, LLC. They dive into the world of payments, discussing the importance of continuous learning in the face of constant innovation. Peter emphasizes the need to understand how new faster payment methods can be applied to existing work processes, encouraging listeners to disrupt their routines for the sake of progress.

The conversation then shifts to the concept of directories in payment systems. Peter explains how directories work in popular payment platforms like Zelle, PayPal, and Venmo. He also highlights the lack of a directory in instant payment schemes, sparking curiosity about the future of this feature in the payment industry.

Finally, the duo explores the realm of artificial intelligence (AI). Peter shares insights on the evolution of AI since the 1960s, highlighting the importance of computational resources and data in AI development. He encourages listeners to learn more about AI and its implications in the payments industry. This episode is a must-listen for anyone looking to stay ahead in the ever-evolving world of payments.

Download Episode Transcript
 

Guest-at-a-Glance

πŸ’‘ Name: Peter Tapling

πŸ’‘What he does: Managing Director

πŸ’‘Company: PTAP Advisory, LLC

πŸ’‘Noteworthy: Peter is a technology expert with over 20 years of experience in the payments industry. His deep understanding of the intersection of fraud, identity, risk, and payments, coupled with his interest in innovation, makes him a valuable resource in the rapidly evolving world of payments.

πŸ’‘ Where to find Peter: LinkedIn
 

Key Insights

⚑Never Stop Learning: The Key to Navigating the Payments Industry

Peter emphasizes the importance of continuous learning in the face of constant innovation in the payments industry. He encourages listeners to step out of their comfort zones and learn about new faster payment methods and how they can be applied to existing work processes. This is where innovation occurs, he says, when we disrupt our routines for the sake of progress. He also stresses the need for education at all levels, from frontline staff to executives, to understand the implications of these innovations for their customers and businesses.

 

⚑Directories: The Unsung Heroes of Payment Platforms

Peter delves into the concept of directories in payment systems. He explains how directories work in popular payment platforms like Zelle, PayPal, and Venmo, allowing users to send payments without needing to know the recipient's bank details. However, he notes the lack of a directory in instant payment schemes, sparking curiosity about the future of this feature in the payment industry.

 

⚑Innovation Starts Small: Unleashing Potential in Everyday Tasks

Peter shares an interesting perspective on innovation. He suggests that innovation isn't always about big, disruptive ideas; it can start small, with improvements to day-to-day tasks. He encourages listeners to identify opportunities for innovation in their current jobs, even if it's as simple as streamlining a 17-step process. This approach, he argues, can lead to significant time savings and efficiency gains, proving that everyone has the potential to innovate in their own way.
 

Episode Highlights

AI: The Game Changer in Payments

Timestamp: [00:12:09]

Peter discusses the role of AI in the payments industry, highlighting its ability to analyze large amounts of data to make decisions. He explains how AI engines like ChatGPT and Bard use large language models to understand and respond to requests in various languages. This, he believes, is a fascinating development in the industry.

"With ChatGPT and Bard and the likes of those offerings, the third thing they've added is this concept of a large language model [...] Now apply all my AI issues, and when I get something of a response, use that large language model again to present in complete sentences in the language I've been asked what this answer might look like. And so, the combination of those three things is fascinating."
 

Innovation: It's in the Small Things

Timestamp: [00:16:23]

Peter encourages listeners to find opportunities for innovation in their day-to-day tasks. For example, he suggests an "Innovation Friday Lunch" where employees share ideas to innovate in their current job. This, he believes, can lead to significant improvements in efficiency and productivity.

"Everybody in their day job has something that they think to themselves, why am I doing this? This is so stupid. That is an opportunity for innovation."
 

Learning: The Key to Success in Payments

Timestamp: [00:08:16]

Peter discusses the importance of learning in the payments industry. He believes that understanding new faster payments and innovations is crucial for both frontline staff and executives. This knowledge, he says, can help them better serve their customers and stay ahead in the industry.

"When you learn about these new faster payments and innovations that we're talking about, think about, how does that apply to the work, this 17th step process. Because that's where innovation occurs when I upend the 17th step process."
 

Education: A Must for All in Payments

Timestamp: [00:08:49]

Again, Peter stresses the need for education at all levels in the payments industry. He believes everyone needs to understand the implications of innovations for their customers and businesses.

"At the executive level, you're not necessarily trying to learn what's an ISO 2022 pacs 008 message and what does the debtor account name mean? None of that is really important, but you do need to be able to internalize and articulate, what does this mean to my customer? What does it mean to my business customers?"

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 6

A New Look at Innovation with Guest Linda Cooper

 

Episode Summary

It's hard to imagine life without a smartphone, as it has integrated into every aspect of our personal and professional lives. Let's take a look at banking. No one writes checks anymore. Instead, we use mobile banking apps; even our credit and debit cards are tap-and-go or tap-to-pay. We understand it's all technology-driven, often forgetting that there have always been, and probably will always be, people behind all these solutions.

 

In this episode of Wrestling Payments, Linda Cooper, the VP & senior operations manager at Gorham Savings Bank, joins our host Joe Casali to discuss innovations in banking from the perspectives of FIs and customers. They also touch upon banking in general and the reasons for its bad reputation. Finally, Linda lists what skills are needed to thrive in the field. 


Download Episode Transcript


Podcast Expert

πŸ’‘ Guest name: Linda Cooper
πŸ’‘ What she does: Linda is the VP & senior operations manager at Gorham Savings Bank.
πŸ’‘ Company: Gorham Savings Bank
πŸ’‘ Noteworthy: Linda covers various areas, working with the data processing, loan servicing, and content management teams.
πŸ’‘ Where to find Linda: LinkedIn


Podcast Insights

⚑Banking has earned a bad reputation, and it's on us to carry that burden. That's because banks take responsibility for any money-related issue, regardless of the level of control they have in a given situation. Linda explains. ''If anything happens, we take the rap for it, whether it is interest rates going up or IRS checks not getting there quickly enough or no matter what. We are on the front end, and it's our problem whether we can control it or not. So it requires large shoulders because that's just the way it is.''

 

⚑Modern banking means faster banking. But, convenient as it may sound, enjoying the shiny objects of today's banking may have some side effects. ''We go on and on about faster payments in all of their forms, and it just means it's faster to be wrong or fraudulent. You can make mistakes faster. You can have problems faster and with less time to react. So there's that side of it.''

 

⚑Relying on technology requires you to have plan B. Digital tools are the present and future of any industry, including banking. But one thing we must bear in mind: technology can break, and depending on how severe the breakage is, we must have a recovery strategy. ''You need to be able to create and have manual procedures so that in the case of failure — it's like insurance. The idea is that you would never have to use it, but you still need to have it.''

 

Episode Highlights

There's No Magic in Modern Banking; It's People Ensuring Everything Goes Well

''There is a perception in the general public, as well as most people, of what's involved behind the scenes with all of the things that are integrated or are proposed to be integrated, but they're not. 

There's an interface, or the integration is you are exporting a list of things, transporting it over here, and then getting sucked into another system. By all practical means out on the front, it's integration, and it's happening, but there's a whole bunch of us behind the scenes that are monitoring all this stuff all the time to make sure that things are processed. [...]

There's this impression, perhaps with some folks, that people aren't keying in the transactions. It's all happening automatically. So we don't need people anymore; it's all gonna just work. And that's the fallacy. It doesn't always just work, and when you don't pay attention is likely gonna be the time when something goes wrong.''


Has the System Changed Due to Changes in How We Do Transactions?

''It's not that different at its core. There's still an amount showing up someplace. The amount is being captured. They might not be keying it in, but it's coming from their invoice automatically. You are tapping your card or swiping it, and then it's going to be settled someplace, and the money arrives in your account. 

So, it's faster. There's a less manual process. There's no physical document. There are no card slips that are being sent somewhere or checks that are being written. But at its core, it's still doing the same thing.'' 


Skills You Need to Thrive in Banking Today

''We talked a bit about the content management team at Gorham, my baby and my pride and joy. And one of the things that were always talked about in interviewing for those positions is we are the ones who often write the procedures. So we're the ones that have to learn how these things work to train other people.

So there is a lot of learning on the job and through experience, and of course, you can have a fantastic process and procedural documentation, but there's always gonna be outliers, and you need to have staff — not necessarily the people that are doing the job, but other people that can help when you go off that path. [...]

We talk about how a lot is changing in banking because you used to have an army of people that could do a lot of data entry — numeric and other — at high speed with high accuracy. All items were being manually posted. Now we're talking about APIs and system integration and understanding how to use technology in a much more intimate way. And finding those people that can translate that for other folks.'' 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

Bonus Episode 1

ACH Risk Management Evolution with Guest Jordan Bennett

 

Episode Summary

In this episode of Wrestling Payments, host Joe Casali welcomes Jordan Bennett from Nacha to delve into the intricacies of risk management for ACH payments. They discuss the evolving role of the Risk Management Advisory Group and how it aids financial institutions in mitigating risks on the ACH network. In addition, Jordan shares insights on refining rules and regulations, emphasizing the importance of feedback and adjustments to perfect the system.

The conversation takes a deeper dive into the proposed rules for combating fraud. Jordan explains the potential use of reversals to return funds to the originator, which could significantly impact how financial institutions handle fraudulent transactions. They also discuss the new use of a return code, R 17, to specifically flag suspicious transactions.

Towards the end, the discussion shifts to the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement and the implications for risk management. The episode concludes with Jordan's advice for professionals in operations, encouraging them to stay aware of organizational changes and fill gaps where necessary.


Download Episode Transcript


Guest-at-a-Glance

πŸ’‘ Name: Jordan Bennett, AAP, APRP

πŸ’‘What he does: Senior Director, Network Risk Management

πŸ’‘Company: Nacha

πŸ’‘Noteworthy: Jordan brings a wealth of experience from his time at the Federal Reserve and his current role at Nacha, particularly in risk management for ACH payments.

πŸ’‘ Where to find Jordan: LinkedIn


Key Insights

⚑The Evolving Role of the Risk Management Advisory Group

The Risk Management Advisory Group plays a crucial role in mitigating risks on the ACH network. Jordan explains how the group is continuously refining rules and regulations to ensure the safety and efficiency of transactions. The process involves gathering feedback and making necessary adjustments to perfect the system. This insight underscores the importance of dynamic risk management in the rapidly evolving payments industry.

 

⚑Proposed Rules for Combating Fraud

Jordan discusses the potential use of reversals to return funds to the originator in cases of fraudulent transactions. This proposed rule could significantly change how financial institutions handle fraud. Additionally, the introduction of a new return code, R 17, is discussed. This code would specifically flag suspicious transactions, providing another layer of security in the ACH payment process.

 

⚑The Future of ACH Payments

The conversation shifts towards the future of ACH payments, with Jordan and Joe pondering the possibility of continuous settlement. This could have significant implications for risk management in the payments industry. Jordan also encourages professionals in operations to stay aware of organizational changes and fill gaps where necessary, highlighting the importance of adaptability in this rapidly changing field.


Episode Highlights

The Importance of Feedback in Rule Refinement

Timestamp: [00:21:27]

Jordan and Joe discuss the importance of feedback in refining rules for ACH payments. They highlight how every comment received is considered, and adjustments are made accordingly. This process ensures that the rules are as effective as possible in managing risks on the ACH network.

"We are gonna go through every single comment that comes in, and then we're gonna make the necessary adjustments, and then the direct members and the payments associations will vote."


Career Advancement in Operations

Timestamp: [00:22:39]

The conversation shifts to career advancement in operations. Jordan advises listeners to pay attention to what's happening in their organizations and be proactive. Such a strategy, he suggests, can lead to career progression and personal growth.

"I'd say pay attention to what's going on in your organization and always do what's necessary. Go out, and if you see something, you see a gap, fill it."


The Future of Continuous Settlement

Timestamp: [00:28:11]

Jordan and Joe touch on the future of ACH payments, specifically the possibility of continuous settlement. They consider the implications of this for risk management and the need for constant monitoring to prevent systemic risk.

"You can't just have payments flowing without anybody there. Because there are tools that the Fed is using to make sure there's no big systemic risk going on."


The Need for Fraud Detection

Timestamp: [00:14:41]

Jordan emphasizes the need for commercially reasonable fraud detection in the ACH network. He argues that all participants should be doing something to prevent fraud, highlighting the importance of proactive measures in combating fraudulent transactions.

"Every participant except for originators, consumer originators don't count. But as far as your third party centers, your ODFIs, RDFIs, you should be doing something to prevent fraud."


To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 5

Proposed Rules Changes that Could Change the ACH Forever with Guest Sean Carter

Episode Summary

In this episode, our host delves into the timely topic of ACH's proposed rule changes with guest expert, Sean Carter. The conversation digs into the specifics, including the revised rules around defining entries as ‘PURCHASE’ or 'PAYROLL'. They discuss the implications these modifications could have on the e-commerce and payroll sectors, while acknowledging the necessity of such standardization for seamless data analysis.

The dialogue gets particularly thought-provoking when the discussion shifts toward the potential challenges presented by the proposed standardization of individual names on transactions. Both host and guest candidly express their concerns about the complexity of implementation and compliance with this rule.

The conversation concludes with a strong call to action, urging listeners to voice their opinions during this crucial rulemaking process. Both the host and Sean emphasize the importance of industry feedback in shaping fair and balanced rules. A must-listen for anyone navigating the changes in the payment industry.


Download Episode Transcript  

##

Guest-at-a-Glance

πŸ’‘ Name: Sean Carter

πŸ’‘ What they do: CEO

πŸ’‘ Company: NEACH

πŸ’‘ Noteworthy: Pioneering advocate for modernization in the payment industry.

πŸ’‘ Where to find them: LinkedIn
 

##

Key Insights

⚑ The Role of NEACH in the Payments Industry. Both Sean Carter and Joe Casali represent NEACH, an organization focused on enhancing the payments ecosystem. In the episode, they discuss NEACH's efforts to provide resources, educate stakeholders, and drive innovation in the payments arena. They also highlight the organization's role in aiding businesses navigate regulatory changes and how they are actively inviting feedback to help shape their approach.

 

##

Episode Highlights

An Invitation to Influence Rule Changes

The podcast delves into the power companies have in shaping regulations that directly impact their operations. Sean emphasizes the importance of participating in the Request for Comment (RFC) process and providing valuable feedback on proposed rules.

"Don't just sit back and let these rules happen to you. It's much better to have an active role in shaping them."

 

NEACH's Role in Navigating Regulatory Changes

Both Sean and Joe talk about the role NEACH plays in aiding businesses navigate through regulatory changes. They highlight NEACH's commitment to educating and providing resources to stakeholders, especially when it comes to understanding AML regulations.

"We're here to help, obviously, if you wanna to have us jump on a call with a couple of your staff to go through these things, we do that all the time."

 

The Permanent Change in the Payments Arena

The podcast concludes with a strong message about the permanence of changes in the payments industry. Joe underlines that these shifts, particularly in regulations and the rise of RTP, are not temporary disruptions but rather lasting transformations.

 

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

Episode 4

Examining the New Role of Operations in Payments with Guest Linda Cooper

Episode Summary

The COVID-19 pandemic spurred innovation and modernization across different businesses and industries, and banking is one of the fields that had no choice but to keep up. However, innovation is an ongoing process that requires leveraging both new and existing resources effectively.

In this episode of the Wrestling Payments podcast, our host Joe Casali welcomes Linda Cooper, the VP & senior operations manager at Gorham Savings Bank. They talk about the ways to optimize processes and better leverage existing resources, how COVID has driven significant changes in the banking space, and the importance of continuous improvement.

Download Episode Transcript

##

Guest-at-a-Glance

πŸ’‘ Name: Linda Cooper

πŸ’‘ What she does: She's the VP & senior operations manager at Gorham Savings Bank.

πŸ’‘ Company: Gorham Savings Bank

πŸ’‘ Noteworthy: Although Linda has been with the Gorham Savings Bank for ten years, she's not a lifelong banker. She has experience in multiple industries, including retail and manufacturing.

πŸ’‘ Where to find Linda: LinkedIn

##

Key Insights

⚑ We need to leverage existing resources better. Implementing new tools is not enough; we also need to leverage the existing resources more effectively. Linda explains, "Something new I've been thinking about as sort of backward innovation, meaning review, as things slow down. The economy’s slowing down; interest rates are up; a lot of us are seeing a decrease in volume of loan activity or whatever. I think that it's a prime opportunity to really review the usage of existing software to make sure you're leveraging all the functionality that's there. A lot of us implement systems for a specific reason or to cover a specific thing. And, 'Oh, we'll get to that later' — the new stuff — and then later never comes. And so, I think that to formalize that a little bit and create the bandwidth and get the right people around the table to really look at those things, to see what we're missing."

⚑ COVID spurred innovation in the banking industry. If there's anything that the pandemic taught us is that traditional ways don't always work best. Linda says, "People that just would not consider or couldn't wrap their heads around any changes to how we do things — removing paper from the process, doing things electronically — all of a sudden we did it, and we're like, 'Oh, wow. That works pretty well.' And so, it increased the appetite, I think, for change in a way that I'm not sure anything else would have done because we were forced into it. Now, that's not to say that there aren't people that went right back to their paper files, and they're so happy to be printing things, but a vast majority of us, I think, got on that bandwagon, which has changed the appetite, the environment for innovation."

⚑ Modernization is a continuous process. Modernization is ongoing and open-ending. There are no boundaries to innovation, even in the banking space. Linda says, "With the modernization, how can we better leverage these? And it's almost an ongoing process. Continuous improvement, I guess, is really what it is, in order to make sure that you're always using, always thinking, never settling for, 'Yeah, this is good enough.' Always looking to see, 'Is there a better way?'"

##

Episode Highlights

Fraud highlights collaboration

"We look at fraud in a lot of different places, but fraud really highlights collaboration. It just becomes more and more; everybody's involved in prevention and detection. All of the new payment rails have rules and just more involvement in that area. So, I think that just remains relevant to everybody that has any involvement with NEACH and payments in general."

Optimize the existing processes as much as possible

"It's a huge amount of time. Now, granted, you may be talking two and a half hours across ten people. But still, nonetheless, it's a ton of time that was basically being wasted that we were able to capture with just simply implementing something that was there all along. Those are the kinds of things that really can pay off and that operations across all areas, of any industry really, should be looking at their systems to say, 'What is out there that I could do?'"

Innovation takes courage

"I think that oftentimes it takes a person or some people making that noise, not taking themselves too seriously and throwing things up against the wall to see if they stick. And you've got to have thick skin because some things aren't going to work, and sometimes they make perfect sense, and they still aren't going to be adopted; they're not going to be allowed for whatever reason. So, I think that's really it. Just looking at things always with the perspective of, 'I might not know everything about this.'"

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen above.

 

Episode 3

Introducing FedNow in New England and How the System Will Affect FIs' Instant Payment Strategies

Episode Summary

NEACH recently conducted a survey with 145 participants about how the finance industry is adopting instant payments in New England. The respondents answered questions about available instant payment solutions and how they affect their strategy. 

In this episode of Wrestling Payments, host Joe Casali touches upon FedNow, a new instant payment system, and shares participants' take on how this new solution will add to their operations.

Joe also discusses when participants plan to implement their chosen instant payment solution and their biggest concerns regarding the process.

Download Episode Transcript

Podcast Expert

Host name: Joe Casali
What he does: Joe is the executive vice president at NEACH.
Company: NEACH / Podcast
Where to find Joe: LinkedIn

Podcast Insights

πŸŽ™65% are either working on or have an instant payment strategy. The survey involved 145 participants answering questions regarding available solutions and a soon-to-be-launched system, FedNow.

πŸŽ™53% of all participants said they are interested in FedNow ''send and receive.'' That means they not only want to receive transactions via the system but also take advantage of the sending option.

πŸŽ™About 20% are interested in implementing it in 2023. The same percentage of participants said that they are considering implementing it next year. Around 1.5% want to do it by 2025, while 50% have an undefined timeframe. ''In the financial institution industry, there's a lot of waiting and seeing, 'I want someone else to make the mistakes, and then I'll participate.'''

 

Episode Highlights

How Vital Is FedNow to Your Strategy?

''One of the interesting numbers here is, 'We are waiting on FedNow to go live, see how it goes, and then make a decision.' That was 31%. The highest one — getting its responses at almost 40% — was, 'We're waiting on our cores.'

That's an interesting comment. Are the cores ready for instant payments? That's a question. If you're a financial institution, you'll ask your cores to see where they are. Interestingly, 20% said there's no plan to connect, and 13% said it is especially important.''

How Vital Are Real Time Payments (RTP) to Your Strategy?

''15% have said, 'We're already on it,' and another 22% or 23% said, 'It is especially important.' Those are good numbers. We're looking at 37% are either on it or it's especially important. 34% are waiting on their cores. So there's a trend here. And no plans to connect to RTP, that was 26% of respondents. We had 141 of the 145 respond to that one.''

FedNow and RTP Have a Request for Payment Feature

''The request for payment lets a biller send an instruction that says, 'Hey, I want your financial institution to pay me, so I want your institution to be a sender.' It has all the instructions in there to get a bill paid.

But it's not that they're sending a payment; they're sending an instruction for your institution to send a payment to that receiver. That's a newer feature of instant payment systems. And it looks like there's a lot more interest in the FedNow request for payment than the RTP request for payment. But 10% and 15%, it's relatively the same number.''

The Biggest Concern Regarding Instant Payment Systems

''The biggest concern was fraud. We're at 59% of all respondents, probably the highest on the presentation. So 59% said, 'We are concerned about fraud.'

I have to do my part here and say that it is not faster payment fraud; it's a fraud. Just like ACH fraud is not ACH fraud; it's an account takeover; it's phishing; it's an email compromise. So it's any number of vectors of fraud, but it just happens to be in the ACH network.

The concern here, and I think it's a heightened concern, I don't think the fraud is any different. Maybe the implications are bigger. And this is my opinion only.''

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

Episode 2

How to Manage Notifications of Change

Episode Summary

Welcome to another episode of Wrestling Payments. We dedicate this session to Notifications of Change (NOCs), or as many refer to them, No One Cares. In this episode, our host Joe Casali shares three cases where receiving financial institutions* wrestled with NOCs. As part of the analysis, Joe describes the causes and the consequences of not addressing the issues. Finally, he shares valuable tips on how to prevent unpleasant scenarios caused by ignoring NOCs. *Names have been changed to protect the actors in the cases.

Download Episode Transcript 

Podcast Expert

Host: Joe Casali
Company: NEACH

Podcast Insights

πŸŽ™Educate your originators on what notifications of change are. While analyzing the background, including the response and the consequences of the first case (you can find out more about it in the highlight section below), Joe says that ODFIs must train their originators on how to act regarding NOCs. Otherwise, they risk penalties. ''They have to know what a NOC is. They have to know how to deal with it. They have to be set up right to get the information.''

πŸŽ™If you receive entries you must wrestle with, file a notice of possible rule violation. Based on a case initiated on the suspicion that an originator acted against the norms, Joe suggests notifying Nacha, or ''You can say something directly to an ODFI, not just as a contact registry. You can reach out, but the system fines and rules enforcement will make it official if you need to escalate it to that point.''

πŸŽ™You must receive NOC reports regularly. That's the third and final tip Joe shares in this episode, adding: ''If you don't have any NOCs, something's wrong. That may not be totally true, but you should probably get at least one NOC over a year or two. So check to confirm that you're getting the NOC report, understand what it's saying, and make the changes as soon as possible.''

Episode Highlights

#1 McCormick Bank and Its Originator Failed to Respond to Notifications of Change

''We have ODFI, the originating sending bank, whatever you wanna call it. The sending institution received a notice of possible NOC violation involving its originator, Pritchard Employer Group.

We can figure out that that's maybe a payroll company working through McCormick Bank, something's happened, and because Nacha can only talk to the sending bank or the receiving bank, they're talking to the sending bank because the receiving bank has been fixing something and it's not getting fixed.

They've been sending NOCs; no one's paying attention to them. So McCormick Bank and Pritchett Employer Group acknowledged this initial violation and stated they would resolve the issue. [...] McCormick Bank responded by saying, 'Guilty. We did it. We've ignored him. We're going to fix it.'

Nacha continues to receive additional reports of possible violations from RDFI, citing the same rules and fraction. So even though Pritchard Employer Group said they were going to fix it, and McCormick Bank said, ‘We're going to fix it.’ It didn't get fixed.''
 

#2 Riley Bank Received a Notification of Possible Rules Violation Regarding a NOC Involving Its Originator, Bonner Employer Group

''Riley Bank and Bonner Employer Group acknowledged the violation. [...]

A discussion with Riley Bank revealed that Bonner Group thought that as long as its customers, the receiver, and the person received the money owed to them, and the transaction wasn't being returned, Bonner Employer Group didn't need to act on the NOCs.

So there's a case where these entries come in, RDFIs wrestle with them, get them in the right place, but then send the note to say, 'Hey, can you change the account number? Hey, this is a checking account, not a savings account. Can you fix it?' And in this case, Bonner Employer Group was ignoring them and saying, 'Hey, everyone's getting paid. What do we care?'

The ACH Rules Enforcement Panel reviewed the issue and determined that the ODFI is responsible for the originator to act properly on each NOC.

As a violation submission had escalated to class two status, they were subject to a fine between $0 and $100,000 per month until the issue was resolved. And the ACH Rules Enforcement Panel decided in this case to issue a one-time fine of $10,000.''
 

#3 Emerson Bank Received a Notice of Possible Rule Violation Regarding an NOC Involving Originator, Riley Health Group

''Emerson Bank and Riley Health Group acknowledged the violation and stated they would resolve the issue. Again, critical because it looks bad from a review perspective if you said, 'Nope, we're not ignoring NOCs.' But then the evidence shows you weren't responding to NOCs.

So the original incident, and now we have 15 additional months of reports of violations that they're ignoring NOCs from several RDFIs. So it's not just one institution complaining; it's systemwide related to the same rule infraction. Each time, Nacha escalated the issue with Emerson Bank via ongoing notice of possible rule fines and imposing escalating fine amounts for each infraction. Emerson Bank met with the Health Group to address this ongoing issue.

This is great; this should probably happen in each case so the parties understand what's happening. What's going wrong? Why are you continuing not to address NOCs?

Riley Health Group determined that the underlying cause of the unresolved NOCs related to an internal issue with the delivery of their NOC file. Whoa. We got an operational issue.''

To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

 

Episode 1

Welcome to Wrestling Payments with Guests Sean Carter and Sandy Ortins

Episode Summary

Welcome to the first episode of Wrestling Payments by NEACH, a member-based payment association for financial institutions in other organizations supplying payment-related services. NEACH is a recognized and licensed ACH education, publications, and support provider. 

In the show's first episode, we are joined by Sean Carter, the president & CEO, and Sandy Ortins, the SVP of Operations, at NEACH. Sean and Sandy reveal why they decided to start a podcast, who it is for, the issues they will tackle, the guest list, and how they came up with the name. 

Download Episode Transcript

Podcast Expert

Name: Sean Carter, Sandy Ortins
What they do: Sean is the president & CEO; Sandy is the SVP of Operations.
Company: NEACH
Noteworthy: Sean has been with NEACH for around 25 years. He started in accounting and is currently responsible for the company's strategic direction. Sandy has a banking background, and before working at NEACH, she worked at a community bank. She oversees education membership at NEACH. 
Where to find them: Sean: LinkedIn; Sandy: LinkedIn 

Podcast Insights

πŸŽ™Digitalization concerns both FIs and their users. It's one of the most critical changes in the finance space. And so, as digitalization has entered every pore of the business world, the financial space must adapt to it. Therefore, a partnership between a bank and a vendor is a prerequisite for growth. ''There's no growth strategy that doesn't include some form of digitalization. And a lot of that is related to payments. So people didn't think about that when we were just starting. We were excited when we would get an originating depository institution. That was a big win for us to say, ‘Oh, we have a new member FI that originates payments.’ And now the conversations are more about what network are you playing in, where are you driving your customers, who are your partners, what are you looking to invest in next?" says Sean.

πŸŽ™Our podcast is not only for FIs and associated institutions. Instead, it's for everyone who can encounter any payment issue at an individual or an organizational level. ''Many of the challenges in payments today are because of the end users, either the sender or the receiver of the payment, which is not the financial institution. So I think for corporations, especially with all the changes that the banks go through, that ends up in their lap. So if a bank is going more digital, ultimately, their customers have to get digital. So I do think there's a broader audience," explains Sean. 

πŸŽ™We must initiate and encourage conversations with FinTech companies, as we are the link to bringing their offer closer to the customers and resolving any concerns customers can come across when considering a particular service provider. ''It's important for those conversations to happen for us because we can support the members through not pre-qualifying or — I can't think of the word. But almost when we're working with a vendor or FinTech that wants to deal with an FI, we can help those conversations and help the FinTech be a little more aware of what they should be discussing,'' says Sean.

Episode Highlights

How Payments Have Evolved And Changed Over Time

''I was on a call earlier talking about the AAP exam, and people brought up how, back then, it was two SEC Codes, no international payments in ACH, and no new settlement windows. So a dramatic change over the last ten years, specifically in ACH. And that's just a small piece.

The world around payments has changed rapidly. We saw it in ACH with the rise of third parties that are so critical to the network, but then you have to govern them and make sure that everybody's managing the risk in the network. [...]

And the same thing is happening for FIs today, looking for their FinTech partnerships that allow them to innovate and all that touches payments. [...] The biggest change is that the discussions are so different now than ever,'' says Sean.


Sandy's Background in Banking Is a Value Add Because She Brings a New Perspective

''I guess I have a different perspective than you guys probably have. We've had conversations, I remember. Joe, years ago when the healthcare payment CCD+ Rule came, and you were like, ‘Everyone needs to know this.’ And I was like, ‘Nobody cares.’ 

It is because I worked in that industry. You care about what gets you through the day. Having a CCD+ and knowing the re-association number, no one cares about that. 

They're trying to get through the day, meet all their deadlines, get everything out the door that they're supposed to; disasters always happen, but finding out what a re-association number is not one of 'em,'' explains Sandy.


The Rationale Behind the NEACH Team's Decision to Start a Podcast

''NEACH, at its core, is a trade association. We are here to bring information to our members so they can strive in whatever they try. And so, a podcast is another way to get that content out to people. And we can do it in a way that makes it easily more relatable to the listener.

Think about going to a workshop. There might be four hours in a workshop, and maybe an hour and a half of that applies to your job, and you need to learn, know, and understand it. Whereas podcasting allows busy people, folks trying to get through the day, but they still need to develop; they need to be able to bring information back to management or to help themselves become management. So this gives them the ability to do that,'' says Sean.


Why NEACH Uses ''Wrestling'' in the Show's Name

''For the payments industry, it is a perfect metaphor for what they're doing. What's the number one move in wrestling? It is the grapple. So you have to grapple each day with time, resources, and where we are going to deploy. What's at the heart of wrestling? It's competition.

And so, now you see all these new players. We have FedNow; we have RTP. They're not fighting each other, but it is a competition between who's offering the better product at the better price and who's easier to connect to. So the financial institution and the corporate end users have to grapple with which direction works for them and their business,'' explains Sean.


To hear this episode and many more like it, subscribe to Wrestling Payments on Apple Podcasts, Google Podcasts, Spotify, or anywhere else you listen to podcasts, or listen below.

 

Theme picker