Check Disruption with Jessica Pinkston // Cornerstone Hot Takes

I think we’re all looking at FedNow to see if it’s going to be the disruptor that we think it has the potential to be.

Not a good track record in the past in terms of payment innovation adoption in the U.S. I mean, we’ve been slow to do it. We may be more open to it now after we finally accepted same-day ACH. Maybe now we’re ready to do that.

But in some respects, right, same-day ACH in a lot of cases maybe eliminates the need for real-time or minimizes the use cases for real-time.

Right.

If I’ve adopted same-day ACH, as long as I get the money by tomorrow, whether it comes to me instantly or at the end of the day isn’t a game changer for a block of my transactions.

It all disrupts checks, right?

Disrupts checks.

So whatever it takes to disrupt checks and cash, we’re all on board with that.

But I kind of wonder if there’s a little bit of a push-pull there with same-day ACH, where they just added the late-night window and sort of all these other things are happening there because NACHA doesn’t want to lose the volume either.

NACHA doesn’t want to lose the volume.

I think the original use case that we saw for same-day ACH was that emergency payroll file, right? What happens if something went wrong and I have to pay my employees? I didn’t have a way prior to same-day ACH to do that if I had a technology goof.

Right.

Yeah, and I don’t want unhappy employees who have payroll delayed. That is not a good experience for anybody.

We’ve seen anecdotally from banks and credit unions that that is how their clients are primarily using same-day ACH. However, we know from looking at volumes that NACHA provides that there have to be other use cases that are out there.

So they’re in the B2B space.

Sure.

They’re in the bill pay space.

Definitely.

Those consumer-to-business payments. So what that really tells us is we may be talking to our clients, so banks and credit unions may be talking to their commercial clients about how they’re using it, but they’re not really doing any data review to see what those actual use cases are.

Wait, I’m sorry. Banks are struggling with data analytics?

Struggling with data.

What you’re telling me is shocking.

I know. Absolutely amazing.

Yes.

That’s going to hinder them in real-time payments because if you don’t know how your customers are making payments now, then you can’t encourage them to adopt a new behavior. It’ll be even harder to get them off checks.

Absolutely.