This week’s payment news roundup covers payment trends including ACH transaction limits, API integration for cross-border payments and cryptocurrency as a 401(k) plan offering. Plus, can ISVs leverage TikTok to engage with their target audience?
Payment technology continues trend toward faster, nearly real-time transactions
Same-day processing of automated clearing house (ACH) transactions increased to $1 million in March from its previous limit of $100,000, according to its governing body Nacha. When it first debuted in 2016, same-day processing for ACH transactions had a $25,000 limit. Payment industry news site Digital Transactions said the pandemic has exacerbated the need for a higher limit, and the increase demonstrates how financial institutions across the payments industry are eager to expand opportunities for faster payments.
Emergency payments, like payroll, are among the top uses for institutions of all sizes while returns, reversals and account-to-account payments for consumers tend to be the most common applications for smaller institutions. Merchant funding for card transactions, bill payments and cryptocurrency wallet credits and debits are other uses for faster clearing.
The new threshold is expected to create new use cases as well as expand uses for payroll funding, vendor and supplier business payments, tax payments and insurance claims.
The senior vice president of Nacha said the tenfold increase in the transaction cap means more than 99% of ACH payments are now eligible for same-day clearing.
Other sectors of the payment industry are moving toward real-time measures, too: Tax authorities are considering real-time compliance for US businesses amid a digital commerce boom.
Are APIs the key to cross-border payments innovation?
As the ecommerce marketplace becomes more global and competitive, financial institutions (FIs), fintech companies and online merchants are looking for a solution that makes gateways and payments options easier to integrate.
According to Pymnts.com, application programming interfaces (APIs) are the answer to more accurate, efficient payment processing, even for the most complex transactions.
Built to improve consumer experiences and provide more defensive data security, API integration helps distinguish some FIs and fintechs from others. For cross-border payments, for example, API integration allows users to make payments or receive funds in the appropriate local currency directly in-app or via an online transaction, all while authentication occurs concurrently in the background.
At Global Payments Integrated, we understand the importance of APIs for your transactions as API implementation promotes agility, delivers feature-rich payment functionality to your software and helps prevent cybercrimes like fraud and identity theft — and it seems the industry has certainly caught on.
New fraud techniques ramp up in alternate fuel industry prompting need for new security tools
For many payment tech solutions, fraud prevention is just as important as being fast. The alternate fuel industry, for example, must figure out how to fight new fraud strategies as it embraces alternate payment methods.
Reporting on the ways fraudsters are taking advantage of alternate fuel customers, PaymentsJournal said scammers are:
- Redirecting users to fake payment websites to steal details through QR code fraud
- Duplicating a SIM to gain access to a payment application. While SIM swap fraud has been around for awhile, one security solution provider saw a 600% hike in its prevalence over the past 12 months
- Making vehicle accessory or food purchases with traditional fuel cards
Scammers are also taking advantage of the shift in the market through contactless payments and NFC readers.
As the PaymentsJournal article points out, "providers need to understand that any payments application needs to focus on security as much as customer experience."
Security solutions from Global Payments Integrated Integrated can assist ISVs who need fraud and risk monitoring tools that prevent fraud through end-to-end encryption, protect against stolen or counterfeit cards with EMV technology and help ensure PCI compliance.
Fidelity Investments a trailblazer for 401(k) bitcoin option despite government heed
Earlier this year, the US Department of Labor cautioned 401(k) plan fiduciaries against adding cryptocurrency to employee investment options.
However, Fidelity Investments announced it will allow employees to allocate a portion of their retirement savings to bitcoin by mid-year, according to Payments Dive.
Though the enforcement agency warned employers it will investigate cryptocurrency offerings, Fidelity moved forward with their plans citing "growing interest from plan sponsors."
Fidelity is no stranger to adopting new fintech; in 2014 the company began exploring the use of blockchain technology through bitcoin mining, and in 2018 it launched a platform for custody and trade execution for institutional solutions.
Now that the investment giant has endorsed the option, time will tell if cryptocurrency investing will become more mainstream for companies and their employees.
Can Fidelity and the payment industry bond with the next generation on TikTok?
In more news from Fidelity, Pymnts.com said the brand and other big financial firms are creating a digital presence on social media apps like TikTok in an effort to connect with the next generation.
Users can find everything from cooking tips to dialogue reenactments to day-in-the-life montages on TikTok, but Fidelity and other "FinTok" influencers, who are not affiliated with any particular fintech company, want to change that with bite-sized clips about compound interest, investing and retirement.
The article said Wells Fargo asked kids where they learn about money management and 35% said through various social media platforms.
ISVs who want to break into social selling for software applications should identify which platform would be best to connect with prospects, then commit to creating relevant, personalized content and posting consistently to build an audience.
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