With a rise in real-time payments (RTP) worldwide, banks and solution providers are rushing to fill out their offerings of digital overlay services. Digital overlay services are value-added services that utilize the rails of an RTP network to enable and showcase the value of a real-time transaction.

We’ve seen this before, back in the 19th century, as the United States committed to building a nationwide network of railroads. As the railroad system developed and stretched across the country, the US economy followed, leveraging those new rails to expand businesses. Boomtowns from east to west popped up seemingly overnight. Beyond the people and goods that railroads carried, the rails themselves were the catalyst that created new cities, millions of jobs, and countless “value-added” services these new towns needed to thrive.

We’re experiencing a modern-day equivalent in real-time payments around the world. As one of the most groundbreaking advancements in recent financial history, RTP has quickly become the hottest topic in our industry. In a real-time payments network, money is sent from one party to another via rails set up to complete that transaction in seconds. A country or region must first establish those rails via a real-time payment clearinghouse. This clearinghouse acts as the train station, sending and receiving transactions across the network and intelligently managing the traffic to stay within the tight time requirements.

Much like early railroad lines, consumers and businesses alike chase the value that these new real-time payment rails enable. The rails facilitate the transaction, but you need a digital overlay service to kick off the entire process. Request-to-pay is a common service that overlays onto a real-time payment rail, allowing a payee to request a payment from a payer. Historically, this has largely been a consumer-led service, but now businesses see the value and have quickly jumped on board. Request-to-pay is just one example of how digital overlay services create value and demand for real-time transactions.

The value of digital overlay services is two-fold. From the consumer and business side, digital overlay services bring convenience and immediate cash flow. From the bank side, digital overlay services create new revenue channels and a level of stickiness with their customers that all financial institutions desperately need right now.

REN Connect GO is our suite of Global Overlays that can help you and your customers quickly realize the value of real-time payment rails. For more information, please visit our website.

In SE Asia, cash is still the predominant form of payment. Being from the U.S. and going from paying for my coffee with cards or my smartphone to paying with cash required a mindset change. But that’s where I found myself as the pandemic exploded last year.

I wanted to use my card and phone to make contactless payments, but the acceptance rates were low. But, when covid-19 hit, I was among the local consumers afraid of encountering the virus. So we would sanitize everything we touched – all surfaces, doorknobs, elevator buttons, food, drink items, and even cash.

It has been about a year since the pandemic broke out globally, and it has caused a ripple effect on practically all aspects of our lives – from what we wear, what we eat, how we work, and how we transact with one another. Some developments have been sudden and involuntary, such as social distancing, wearing masks, limiting public transportation, and restrictions on travel. For others, it has merely accelerated the adoption of behaviors already gaining traction, such as digitization of shopping, banking, and more. Thus, the “new normal” has become a fact of everyday life.

When countries went under lockdown, we had to get used to spending a lot of time at home. As a result, working from home became the norm, and online shopping became more necessary than a luxury. However, the thought of going out for groceries or essential items brought concerns and risks of catching the virus from someone. Plus, the hassle of sanitizing oneself upon returning home is exhausting. Besides, online shopping gives consumers a choice and the ability to price compare, while the payment is secure and convenient using debit or credit cards. And there is also an option of transferring funds from bank accounts to the online shopping platform’s e-wallet. Therefore, it’s not surprising that Covid-19 has led to a surge in e-commerce and accelerated digital transformation. In fact, as far back as March 2020, contactless increased 150% compared to March 2019.

Online banking also took on more importance as consumers experiment with performing more self-service banking transactions themselves, so it is no surprise that mobile bank registrations were up 200% and traffic 85% by April 2020. Self-registering for online banking access to existing accounts, opening new current, savings, and time deposit accounts without going into the bank branch, then funding those newly opened accounts by easily transferring funds from another bank have made banking easier and faster. Even sending money domestically and internationally became painless.

After the lockdown, I always made it a point to pay using my phone or my contactless card every time I went out for groceries or essential items. In 2021, the acceptance rates of digital forms of payment have improved greatly, and no merchant has declined me! I guess it’s not surprising as the trend for contactless payments has taken off in the past year.

The experience of living through Covid-19 is changing the world in which we live and our behavior. Changes that provide positive experiences are likely to last longer, particularly those driven by convenience and well-being, such as digital adoption, value-based purchasing, and increased health awareness.

More than a year has passed since the COVID-19 pandemic became part of our lives, and our “new normal” started taking shape. Changes in our social behavior led to changes in the ways we do business. We increasingly avoided physical retail stores, opted for online shopping, and converted to digital forms of payment. Consequently, the use of cash decreased significantly.

Vaccines are once again shifting the new normal, and while some recently adopted behavior will remain, there is also a return to our former lives, including the use of cash for payments. Consider:

• Consumers who were avoiding cash due to hygiene considerations are comfortable handling cash after vaccination.
• Cash is considered by many a shelter in times of crisis.
• A considerable consumer segment—the unbanked and underbanked—continue to use cash as their primary payment method.
• The post-Covid era seems to be one of less cash, rather than cash-less.

How will the ATM participate in this new financial landscape? What will be the primary purpose of ATMs in the future, and how can financial institutions adapt to ensure they are running a profitable ATM fleet?

Evolution is the key to future-proofing the ATM. Even before the pandemic began, the ATM channel had started to play an expanded role, with services such as bill payments and mobile top-ups part of the offering. Now, with self-service being the preferred method of banking, it is time to extend the role of this powerful self-service channel even further—to become a digital payments and transaction hub. This transition will produce new functionality and new revenue streams that can compensate for the diminished frequency of cash withdrawals and turn the ATM channel into a revenue generator. Below are a few adaptations for your consideration:

• Cash-in transactions are gaining popularity. As the underbanked population with cash in their pockets seeks to participate in digital payments, the self-service terminal offers a way to deposit cash into prepaid wallets that may be used for online purchases or pay bills electronically.
• Consumers make purchases at the ATM. Consumers can buy tickets for events, local attractions, or public transportation, digital content cards, insurance, stamps, and prepaid cards—either plastic or virtual.
• Card-less transactions allow P2P cash payments to any beneficiary.
• Automated check deposits enhance customer service.
• Charity donations provide a simple and convenient way to support community service organizations.
• Services to travelers in airports, seaports, and train and bus terminals may include dispensing of foreign currencies or dynamic currency conversion.
• ATMs may act as a cash reward dispensing point for customer loyalty programs, B2C bonuses or incentives, or even lottery payouts.
• Advertising on ATM screens and receipts can provide additional income.
• Marketing Campaigns offer cross-selling opportunities to new and existing clients.
• Kiosk-type account services can reduce banking operating costs.
• Cash Recycling and Remote Key Loading can greatly reduce ATM maintenance expenses.
• While not a new revenue stream on their own, contactless, or less-contact transactions contribute to returning trust in the safety of ATMs.

As ATMs transform into digital payment hubs, they will gain an expanded significance for financial institutions and consumers, despite the declining demand for cash.

More than ever, your customers demand fast, convenient, and digital payments. Far beyond pizza delivery, consumers ordered everything from exercise equipment to cat litter to theatre tickets online – delivered straight to your door or email inbox. Classes from kindergarten through University are streamed live. Food delivery services, groceries ordered online and picked up in the parking lot—streaming movies – any movie – viewed on any number of platforms. Consumers not only expect but now presume convenience.

The slightest stumble in this instant gratification marketplace can disrupt the ideal customer experience – wait, you’re saying I have to get out of bed to find a physical credit card to complete this transaction?

Fintechs have held the edge over banks and traditional brick and mortar retailers in meeting consumer demand for convenient and fast payments. But taking an omnichannel approach to payments will allow merchants and banks to compete.

With the help of national fast payment networks, banks can compete today. However, connecting to a real-time payments network is often fraught with complexity. Does your bank have the knowledge, the skills, and the budget to connect your system to the network, all while minimizing modernization and security risks?

The most challenging aspects of connecting to an RTP are integrating with legacy systems while managing costs. On the surface, the seemingly best investment is to keep the process in-house – you already have people and technology resources, so why not leverage them to build the connectivity you need? But the obstacles with migrating to these new platforms include cross-border capabilities, retaining current card networks and payment rails, meeting regulatory compliance, integrating fraud detection, all while considering the possibility of cloud-based solutions. Are you ready to meet those tasks?

Working with a partner with Euronet’s experience and know-how and our REN Connect solution makes it easy for your bank to join an RTP network and gain all the advantages in participating in these faster payment networks.

REN Connect is dedicated to connecting participant financial institutions to your country’s real-time payments network. Available as on-premises software or in the cloud, REN Connect enables your users, like business analysts to software developers, to connect your back-office systems to a real-time network through a visual drag-and-drop interface or industry-standard XSLT code.

REN Connect specializes in transforming message types (ISO8583 to ISO20022, for example) and can be extended easily in the future to accommodate any new message types. The solution also provides access to Euronet’s REN Foundation – digital overlay services you can leverage to build products for customers that utilize your new connection to the real-time payments network.

In a recent press release, Euronet Worldwide, a global financial technology solutions and payments provider, announced that the placement of AMBER Alerts on its ATM screens in several European countries had resulted in hundreds of phone calls and the successful location of eight missing persons during 2020. AMBER Alerts are emergency messages issued when a law enforcement agency determines that a child has been abducted and is in imminent danger. AMBER Alerts inform communities to assist in the search for and safe recovery of an abducted child.

Euronet initiated this community service on their ATMs in the Netherlands in 2019, and quickly expanded to four other European countries. Given the success, Euronet expects to broaden the service to its ATMs in other European countries in the coming months.

One reason we can provide this important service is the ATM Channel Manager software that Euronet has developed and deployed on its ATMs”, said Tony Warren, Managing Director – Euronet USA. “Because the ACM Client eliminates the dependency on states and screens, it allows dynamic content to be remotely deployed to ATMs easily. With ACM, content updates such as these alerts and even targeted advertising can be handled by marketing staff without IT involvement. To increase the value and effectiveness of content ACM enables it to be customized by ATM location, ATM User or even time of day, making it possible to deliver timely and relevant information to both ATM users as well as passersby.”

Euronet’s ATM screens, viewed by millions of users and passersby each day serve not only the community’s financial needs, but also provide important public service announcements such as these AMBER Alerts and notifications for area events. And since ACM supports both video and still imagery, the information can be shared in a variety of formats.

ATM Channel Manager Client Solution (ACM Client) is a multi-vendor, multi-function ATM driving software for financial institutions and ISOs looking to modernize customer experience and fleet operations with a rich transaction set and state-of-the art tools for comprehensive real-time fleet management.

Renowned business author Ken Blanchard noted the importance of collaboration in “The One Minute Manager.” That quote speaks volumes for banks interested in joining a real-time payment network. As the trend of real-time payments has swept over the world, it has repeatedly shown success, and with success comes another surge in participation. Everyone from banks to fintechs to merchants are looking to capitalize on the potential revenue from being part of a real-time payment network. The dilemma for those looking to join a network is where to start. Like most trends that hit the payments industry, there is a large learning curve, particularly for the development teams required to connect the bank to the RTP network.

Here’s where we return to Ken Blanchard’s quote: banks won’t know everything they need to know as they start this process, and that’s okay–there are experienced companies that can help. It’s in a banks best interest to find a partner to help guide them through the process, gaining speed to market and education along the way.

Euronet recently partnered with Forrester on research with 325 payments executives worldwide, half that had already joined an RTP network, and half that are planning to join one soon. Three points were abundantly clear after the study:

• Banks want to participate in an RTP network.
• Banks feel unprepared.
• Banks that enlisted a payments solution provider to help were happier than those that did not.

Following the momentum of real-time payments around the world, eighty percent (80%) of the executives listed “Faster Payments” as their customers’ current top expectation. This finding was no surprise as real-time payments were the hottest trend in payments before the global pandemic. Since the pandemic started, contactless payment options have become a requirement to ensure safety while conducting business. The need for contactless has created a sense of urgency by consumers, even in countries where there isn’t a formalized RTP network.

As a result, banks that might have been hesitant to adopt RTP must get on board. The same is true for countries without an RTP network in place. The past year has sparked immense interest in RTP as a contactless payment option and plans for new networks are quickly spreading.

While most executives know their customers are demanding real-time payments, many existing RTP networks are waiting for banks and merchants to join. According to the study, many executives attribute the slow adoption to three things:

• Integration to an RTP network is too difficult.
• Banks are currently short-staffed.
• Lack the necessary skills to develop the RTP connection.

The good news is that all three of these primary concerns can be remedied through a partnership with a payment solution provider. Creating the connection to an RTP network can be difficult. Most banks have a legacy payments solution in place, and these typically use ISO 8583. Nearly all the RTP networks utilize ISO 20022, and this can be a non-starter for a bank with little to no experience in that message type. For a bank to properly integrate a legacy solution to a modern RTP network, there must be a translation layer to handle the two message types used on either side of the transaction. Using a ready-made offering from a partner that sits between the bank and RTP clearinghouse can seamlessly route and translate RTP transactions, reducing the bank’s legacy system burden.

Another benefit of partnering is that the expertise found at a payment solution provider can make up for the bank’s staff’s experience and staffing gaps. Having a partner with experience in building complex payments solutions, specifically for participation in an RTP network, can greatly reduce time to market.

In an industry that is becoming increasingly “digital-first,” the ability to offer real-time payment solutions is crucial in establishing market share. Our independently commissioned research showed that bank executives that outsourced the development of their RTP connection were more satisfied with the experience than those who chose to devise their own RTP connection.

If you have found yourself struggling with connecting to an RTP network or are just getting started and are looking for a partner to minimize risk and greatly speed up your time to market, please consider Euronet and our latest offering, REN Connect. Just remember, none of us is smarter than all of us. Let us work with you to develop the connection that best meets your needs, today and tomorrow.

As we start reopening of the economy, what might the world look like for the payments industry? In this link, Accenture shares 10 ways COVID-19 is impacting payments (May 5, 2020). It’s likely that the first two impacts mentioned – that the largest economies will stumble hardest, and that consumer spending will be in retreat – will be short term consequences of the pandemic. Of course, the short term is relative in this environment. Is the short term for three months or two years? According to a New York Times poll released May 20, only one in five Americans expect business conditions to be “very” or “somewhat” good in the next year. And yet we are seeing some positive signs, not the least of which is a global network of scientists and pharma working toward a vaccine as early as 2021 or even sooner.

As Accenture points out, there will be a rise in digital wallet usage. Merchants and consumers were already embracing digital payments, but the pandemic has spurred this segment to greater growth and acceptance. With a greater demand for fast, easy, and safe payments, we agree that consumers and merchants will more quickly embrace digital wallets and embedded payment methods. This growth of digital payments will also lead to a greater need for fraud protection and banks must be prepared to deliver multilevel authentication.

Digital payments growth will come at the expense of cash. But don’t bury cash just yet. Roughly 30% of U.S. transactions, 40% of E.U. transactions, and over 80% of India’s transactions are still cash-based. Consumers want options – an omni-channel approach to payment methods – not restrictions.

The Accenture article also points to the consumers’ need to manage cashflows more tightly during these uncertain financial times and thus having a desire to control their finances. The ’08 recession combined with the simultaneous adoption of the smartphone had already given consumers the technology necessary to control their finances. Once again, the pandemic is simply speeding up this adoption. Banks and merchants will need to deliver the customized experience consumers have come to expect online.

This delivery of technology and innovation is at odds with another Accenture impact: that payments firms will shift short term priorities from investing in innovation to cost reduction. On this point, we can’t state strongly enough that banks must continue to innovate, or their own recovery will be in jeopardy. There are solutions that meet the needs of both innovation and lower total cost of ownership. Our REN Foundation is purpose-built and future-proofed, offering advantages for our clients such as:

• Lower Total Cost of Ownership. Ease maintenance concerns and pursue new opportunities with microservices architecture.
• Adaptive Routing. Securely route any type or size of data between different applications and systems.
• OS and Database Agnostic. Eliminate incompatibility. Operate with existing hardware, OS, and databases.
• Infinite Messaging. Process QR codes, fingerprints, graphics, or any type of data in singular transactions.
• Linear Scalability. Operate within a small footprint in your data center and scale-up on commodity hardware.
• 100% Availability. Make changes and update without taking the system down or the need for idle redundant servers.

As more and more nations are feeling the effects of the COVID-19 virus, virtually every aspect of our lives have been impacted in one way or another.

To decrease the speed at which the virus spreads, social distancing, curfews, and in some areas commercial business shutdowns of all but essential services have become the norm.

The economic impacts of this global pandemic are enormous and are forcing quick action by governments around the world to provide relief for citizens, while also providing protections against the virus.

As the pandemic spread into the Western hemisphere, the government of Honduras found it necessary to announce a national-level curfew would be starting on the night of March 16th. At this same time, banks in the country were asked to find ways to assist businesses with providing financial relief in the form of salary advances to their employees during the pandemic. A handful of banks were able to do this as a teller transaction. However, Banco Atlantida, the largest bank in Honduras, and a long-time customer of Euronet, wanted to go the extra mile for their customers.

The bank has the largest ATM fleet in Honduras, with over 450 ATMs at locations throughout the country. Banco Atlantida’s leadership had the idea that by making the salary advances available at the ATM, not only would it be more convenient for their customers since ATMs have 24-hour availability, but it could be potentially safer for their customers since ATM transactions don’t require face-to-face contact and would be in line with social-distancing guidelines.

Recognizing the importance of the request, Euronet’s software implementation team committed to deliver the transaction even though the project posed a significant challenge due to the quick turnaround and resource constraints, as well as the fact that this new transaction had implications for other ongoing projects and dependencies. Despite these challenges, with a true team effort and a determined mindset the project was delivered successfully in time for the new salary advance transaction at the ATM to be available at the start of the curfew. ​

​Consumer adoption of contactless payments via cards, wearables, and mobile wallets, has been increasing at a consistent pace. Not huge leaps forward, but consistent growth. Solutions like those for the London Underground has helped propelled consumer usage. Still, certain regions of the world are trailing in the adoption of contactless. Will the novel coronavirus serve as another step change to drive contactless payment transactions to greater growth?

The impact of the virus on our health and the economy changes daily, but the frenzy surrounding the possible effect on us individually has had an immediate, significant, and perhaps long-term impact on social behavior. In our own industry, the handling of cash, passing credit cards between consumer and merchant, and keying in PIN codes by hand are all susceptible to passing viruses across the population. In fact, the World Health Organization (WHO) has suggested switching to contactless as just one more safety measure to protect yourself from the coronavirus (The Telegraph, March 3, 2020).

In response to the current events, UK Finance has raised the contactless card daily limit from 30 to 45 pounds. Meanwhile, small businesses who previously eschewed online sales are being forced to move product sales online or shutter their doors, facilitating an immediate need for better digital payment solutions.

Is this uncertain time also a silver lining moment for the growth of contactless payments? If so, are you prepared for the expansion? How will you keep up with competitors who offer strong solutions today? Can you move quickly to meet the needs of customers with minimal downtime? We would love to hear your thoughts on this subject.

The adoption of instant payments, nearly doubling over each of the past five years, has motivated countries to implement their own Instant Payment networks. These national networks seek to create a streamlined and regulated channel by which instant payments can thrive in a controlled and trackable environment.

Some of the earliest adopters include TIPS in Europe and NPP in Australia. The momentum continued in 2019 when The Netherlands and Russia each launched national instant payment networks. This is certainly a trend that will continue into 2020 and beyond.

In those and other countries that are building networks, banks are now left with a decision. Do we adapt and join the race for instant payments or stay out of the race and try to protect our legacy payments business?

According to Accenture (Accenture, 2019), banks must transform a) to protect legacy payments revenue that is being displaced by new payment types, and b) to capitalize on the over US$500 billion in incremental revenue growth that is being created by new payment types over the next five years.

Against that backdrop, joining these networks seems to be the right financial decision for most banks, yet we know it isn’t that simple. ISO 20022 has become the standard message type for instant payments, but the majority of banks use ISO 8583 messages. Banks will need to either transform their legacy system or adopt a message layer that can convert message types to those required by the Instant Payment network.

In addition to the infrastructure changes that instant payments require, there are other factors out of the banks’ control. The national networks are all relatively young, if not brand new, and it will take time – and iterations – for each network to operate flawlessly. Each of these networks also carry strict requirements. These requirements can range from the amount of time that is allowed to complete a transaction, to the scalability of the program, to the security around the transaction itself. Banks must be prepared to operate in compliance.

It is undeniable that instant payments are here to stay. In order to stay competitive with other banks and stay relevant with consumers, banks will likely face the task of creating their own mode of instant payments or integrating to a national payments network. These transformations will be unchartered territory for the banks. Undertakings of this magnitude require a knowledgeable, trusted partner to help guide you through the adoption of the technology, and message formatting, with an understanding of the requirements expected of a participant bank operating within a national instant payments network.​