Moving instant payments to every day transactions took a large leap forward today with the announcement by ACI that they are acquiring Western Union’s Speedpay division. On the surface, the acquisition looks like a great marriage between the ACI On Demand payment solution which connects issuers and merchants for bill pay capability. However, a closer look at the synergies between the two organizations provides a much larger vision – a roadmap to advancing instant payments in the United States. 
 
Bill payment capabilities are being re-invented across the United States and there is no one leading player in the industry. The bill payment functions rely on who connects into the platform – both merchants and issuers – which requires merchants to have multiple ways to receive payment for services.
 
The Breakdown
 
ACI provides scalable and reliable technology infrastructure used in many markets for national instant payment capability. The ability to provide issuer and merchant capability with the technology is a major component of payment the global payment modernization movement.
 
What ACI does not have is a consumer interface to enable the payments between merchants and issuers. The acquisition of Speedpay from Western Union delivers a great user experience, integration with over 4,000 merchants, and an experienced operations unit delivers what ACI has not been able to deliver in the On Demand and UP payment platforms. 
 
Speedpay currently does not utilize instant bill payment capabilities and will migrate to the ACI UP platform. The merger of the front and back end technology with a large number of merchants onboard, delivers a robust solution to the market. 
 
Market Needs
 
Consumers who are reliant on instant payments like Zelle and Venmo also have a higher likelihood of using remittance services like Speedpay to pay their bill the day they are due. Paycheck to paycheck consumers are a growing market segment which requires bills to be paid on or near the due date because they are waiting to be paid. 
 
The payments market has failed to provide the services needed to deliver instant bill payment services within financial institutions and fintech firms have filled in the gap. 
 
Implications beyond Instant Bill Pay
 
The technology integration of the ACI UP platform and Speedpay merchants will deliver even greater potential for real-time payments. Merchants are actively looking for ways to reduce their cost of accepting payments in store and on-line. Creating a new network of merchants and issuers to enable Speedpay on real time rails for any transaction, not limited to bill pay has significant appeal.
 
Payment companies are taking note on how instant payments will impact their business models and they are creating new products to address the growing threats. 
  • Mastercard launched Pay by Bank in the United Kingdom to enable in app direct debit transactions using the Vocalink real time payment system (interestingly also an ACI enabled technology)
  • Amazon Cash provides consumers the ability to use cash and fund their Amazon account for instant access
  • PayPal Cash Load enables consumers to use cash to fund their PayPal account
Internationally governments are recognizing the need to move towards instant payment access for consumers and merchants. Regulatory action and national commitments are driving significant levels of change. In absence of US regulatory change, the move to instant payments will be driven by corporations. The ACI acquisition of Speedpay is a great advancement towards the US moving faster into the instant payment technology. 
 
Author

About Krista Tedder

Krista Tedder is an experienced thought leader in the payments industry working with issuing and acquiring financial institutions, merchants, and payment service providers. She advises clients on how to move from foundational to transformational payment practices to improve consumer satisfaction while increasing profitability. Krista provides strategic consulting on core technology providers and methodologies, emerging technologies, and product marketing functions for payments, including market assessments, go-to market strategies, and content marketing strategies.

Krista’s experience crosses all payment verticals of the past 20 years — from merchant, consumer (debit, credit, prepaid, mortgage), and processor (acquiring and issuing), to brand networks. Her experience in various management roles at Bank of America, First Data, Mastercard, and fintechs brings a holistic point of view to payment research. She has given numerous presentations at conferences globally — BAI Retail Delivery, Card Forum, Mastercard Global Risk Leadership, World Credit Union Conference, and others.

Krista holds a Bachelor of Arts degree from York College of Pennsylvania with a focus on communications and education. Ongoing education and certification in product management, product development, and marketing enable Krista to articulate business challenges and opportunities to Javelin Strategy clients within the Payments Practice.


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