With The Clearing House Payments Co. operating a real-time payments network and the Federal Reserve planning one for no later than 2024, payments companies are looking at slices of the market for opportunities in instant money movement. And these niche plays aren’t just the province of the country’s biggest banks.
The latest development comes from the financial-services software company Finastra, which on Monday announced it has launched a real-time bill-payment application.
The new service, in operation now at Certified Federal Credit Union, was built on Finastra’s FusionFabric open development platform by Allied Payment Network Inc., a 9-year-old vendor of bill-pay software for banks and credit unions. It comes as financial institutions are steadily losing share of U.S. bill-pay volume to biller Web sites, which controlled 73% of the volume in 2016, up from 62% in 2010, according to data from Aite Group.
It also comes as the big card networks are starting to muscle into this market. In the latest play, Mastercard Inc. in August agreed to pay $3.2 billion for Nets Group, a Denmark-based processor of instant-payment and e-billing transactions. The deal represents the biggest in Mastercard’s history.
Dubbed Allied Bill Payment, the new service from Finastra and Allied is designed to move funds immediately from the user’s bank account in an effort to limit risk to the financial institution. An “instant” push to the biller, with immediate payment confirmation to the user, is coming “soon,” Finastra says in its announcement.
Key to bringing the service to market quickly in a real-time market many see as becoming increasingly competitive was Finastra’s development platform, whose application programming interfaces helped reduce Allied’s development and integration time from 10 weeks to two days, according to Ralph Marcuccilli, founder and chief executive at Fort Wayne, Ind.-based Allied. “Consumers today have so much choice in financial providers, which is driving financial institutions to find new ways to engage their clients and remain relevant,” Marcuccilli said in a statement. Now, he said, Allied is looking to expand the service to other members of Finastra’s roster of client institutions, which numbers more than 9,000 in 130 countries, according to the company.
Time-to-market in real-time services is equally crucial to banks and credit unions. “While we may lack the size and resources of the national providers, FusionFabric.cloud is allowing us to collaborate with other fintechs to exceed our members’ expectations with access to leading-edge innovation,” said James Tomasso, vice president and chief information officer at El Monte, Calif.-based Certified Federal Credit Union, formerly Vons Credit Union, in a statement. The institution claims more than $600 million in assets, ranking it 19th among the nation’s credit unions.
London-based Finastra maintains two offices in the United States, including its New York City location and its development center in Lake Mary, Fla. It was formed in 2017 from the merger of two banking-software companies, Misys and DH Corp. Last year, the company acquired Malauzai Software Inc., a provider of mobile remote deposit capture software, for undisclosed terms.