As Real-Time Payment Rails Rise, Interoperability Comes Into Focus

Embracing new payment rails, and enhancing the value of existing ones, remains a key part of promoting overall payment innovation. But as real-time payment networks proliferate, a new challenge is on the rise: enabling interoperability between these rails on both a domestic and international scale.

“The smallest institutions just don’t have the financial capability [or] the people capability to implement multiple channels of payment rails,” explained Kelly Burdette, senior vice president of product and delivery for Bank Independent, in a recent interview with PYMNTS. “It’s hard enough for us now with the ones we have, let alone when you start introducing multiple new ones to the space. [This is why] it is incumbent upon the industry to make sure we have interoperability so that everyone has the opportunity to get in there.”

Bank Independent is among several participants of the Federal Reserve’s FedNow pilot program. But while the FedNow prepares for launch, existing rails — including existing real-time payment networks like RTP in the U.S. and UPI in India — are exploring ways to expand adoption, enhance functionality and support their coexistence with other rails.

In this week’s Payment Rails Innovation roundup, PYMNTS examines how innovators are moving forward with those initiatives, and explores new efforts to add value to other networks like ACH.

FIS Wields Real-Time Payment Networks For A2A Transactions

FIS is rolling out a new solution for businesses, consumers and governments to send and receive account-to-account (A2A) transactions via real-time payment rails, the firm recently announced. Dubbed RealNet, FIS’ Software-as-a-Service platform helps organizations across sectors facilitate payments with consumers, other businesses or employees using both domestic and cross-border instant payment rails, including same-day ACH and RTP. “Not only will the RealNet platform speed up payments by helping to enable real-time money movement, but it will also do so in a way that is seamless, reliable and secure for organizations around the globe,” said Raja Gopalakrishnan, global head of real-time payments at FIS.

Bridge Community Bank Loops Into RTP

Iowa’s Bridge Community Bank is helping to expand RTP adoption by looping into the network, which is developed by The Clearing House to support its clients in receiving real-time payments. In its announcement, the bank said the implementation of RTP will also enable advanced messaging capabilities. The FI is working with JHA PayCenter to connect into the payment rail.

FSS, NPCI Collaborate To Expand India’s UPI

As India’s Unified Payment Interface (UPI) real-time payment rail gains traction, Financial Software and Systems (FSS) and payment processor NPCI International Payments are collaborating to expand the infrastructure on a global scale. In a recent announcement, the partners said they are working to help governments in other jurisdictions to model new instant payment infrastructure off of UPI, with NIPL facilitating its real-time payment processing and FSS supporting infrastructure development and implementation. “The implementation of real-time payments is complex as flavors differ across regions,” said K. Srinivasan, COO, PayTech, FSS. “The collaboration confirms FSS expertise and capabilities in delivering world-class payment infrastructures and services at scale around the world.”

Q2 Renews Nacha Preferred Partner Status

Bank digitization company Q2 is renewing its status as a Nacha preferred partner, allowing it to continue operating with the support of Nacha, as a leader in solutions that enhance ACH payment functionality for financial institutions and end users. “Nacha Preferred Partners are valued members of our community and are vital in strengthening and growing the modern ACH Network,” said Jane Larimer, Nacha president and CEO.

Rentec Enhances ACH Processing To Combat Fraud

Rentec, a technology provider that enables property managers to streamline rent payment, accounting, financial reporting and more, has announced enhancements to its ACH processing capabilities to strengthen fraud prevention and align with Nacha’s new fraud protection rules. In a press release, Rentec said it is collaborating with another Nacha preferred partner, Forte Payment Systems, to ensure ACH bank account validation. “ACH transactions are processed differently than credit or debit card transactions and are handled on a completely different network,” said Nathan Miller, president of Rentec Direct. “Nacha is attempting to decrease any risk associated with ACH transactions by implementing this new fraud detection rule. In the rental industry, this means protecting clients from receiving fraudulent rent payments or incorrect banking information.”