NEACH’s 2017 Payments Management Conference Faster payments trends may affect you sooner than you think! Hear about the latest solutions in development from the Federal Reserve Task Force activities, the Clearing House, and other initiatives. Learn about what’s on the horizon and what will it mean for your financial institution.

1. Demystifying Faster Payments –
Separating Hype from Reality
Thursday, May 11, 2017 | Framingham Sheraton Hotel and
Conference Center | MA

2. Getting To Know Us
2
Joseph Casali
Senior Vice President
Nasreen Quibria
Managing Director &
Founder
Douglas Green
Director

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Today’s Discussion…
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Today’s Discussion…
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Forces Driving Change
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1. Digital Age
2. Tech Innovations 3. Millennial Shift
4. Pressure to
Reduce Costs
5. Consumer
Preferences
6. Big Data

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Faster Payments versus Real-Time Payments
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Faster Payments
Accelerated payments
from established
schedules e.g.,
reducing payment
times between different
banks' customer
accounts from days to
same day ACH
Real-Time Payments
Instant or immediate
payments; an interbank
account to account payment
posted and confirmed to
receiver and originator in less
than a minute
60 seconds
Completed
instantaneously –
majority within 1
minute
Finality – cannot
be reversed
Certainty –
confirmed as
either
completed or
rejected
ISO 20022 –
underpinning
standard of
many payments
systems
Payments can be
made 24 x 7 x 365 –
not all systems
operate at these
levels, but process
payments nearly
every day during
specified times
Common Characteristics of Real-Time Payments

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Global March to Faster Payments
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Proprietary
Players
Alternative
Players
Powerhouses

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Federal Reserve Faster Payments Task Force
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Focus on Improving Payment System Speed,
Efficiency, and Safety from End-to-End
› Speed
› Security
› Efficiency
› International
› Collaboration
Five desired outcomes developed with extensive
stakeholder input

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Today’s Discussion…
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10. © 2017 Q INSIGHTS. All rights reserved

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C2B
•Bill Pay
•eCommerce
•POS check conversion
•Merchant debit
•Collections
C2C
• Person-to-Person
• Account-to-
Account
B2B
•Multiple uses
B2C
• Payroll
• Insurance, refunds
Over 60% of estimated Same Day ACH volume
comes from existing ACH
Available Use CasesOpportunities
o ACH is Ubiquitious
o Credits ready
o Debits soon
o Ability to leverage
existing investments
o ACH is rails, Industry
open to innovation
o Business concern
o Limited windows
o $25,000 cap
o Unknown effect on Cash
Management
o West coast limitation
Challenges

12. A look at Innovators

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Zelle Network
SM
Faster Funds P2P Example
In-Network to Out-of-Network Experience
$34.59
• Debit Cindy’s acct. $34.59
• Message Zelle Network
• Message Cindy Completion
• Funds moved to Visa/MC
settlement account
• Acquiring – Funding Auth
Cindy SENDS Don
$34.59
Don*
RECEIVES $ IN MINUTES
Using Zelle App
ACH/Wire
$34.59 to Visa/MC
Bank A
Settlement Account
Bank B
Settlement Account
SETTLEMENT
FUNDS
POSTED
USER EXPERIENCE
Messages
Message Don -
Funds Received
Bank A
Zelle Participant
Bank B
Out-of-Network Bank
ACH
Visa or
MC
Credit Don’s acct $34.59
Wire
Visa or
MC
*Out-of-network user

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Zelle℠ P2P User Experience
Consistent, Simple, Delightful.
ZELLE APP* INTEGRATED IMPLEMENTATION
Common Experience Across Financial Institutions
*Abbreviated flow for illustration purposes

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› Lower fees: free micro-
transactions (under $10); 25
cents transaction fee
› “Instantaneous transfers”
› Agnostic to payment type i.e.,
P2P, B2B, C2B, B2C, G2B, B2G,
etc.
Now Available
Same Day ACH
API

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“Overall, the faster payment solution
allows us to improve the customer
experience. Striving to do whatever it
takes to put customers’ minds at ease
so they will know their money is
going to be in their account quickly is
a cornerstone of great customer
service.”
ACH Use Case
Protection1 Solution
• Address Customer Overpayment
• Traditionally took 3 – 5 days
• Faster Refunds improve customer
experience
• Considering further innovations
with Same Day ACH Debits

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Global Trend in RTP
➢ Countries are and will most likely continue to develop domestic real-time
payment solutions with an eye towards interoperability with other
countries
➢ Consistent formatting across countries: ISO 20022 is the new global
standard and could be leveraged for interoperability

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Key Facts – Benefits and Use Cases (TCH)
End to end cost Timeliness Transparency
Managing Payee
Banking
Information
Settlement Risk
• Provides immediate confirmation
of payment, notification of receipt,
and availability of funds.
• Irrevocability provides payment
certainty.
• Extensive real-time messaging
capabilities such as requests for
payment.
• Real-time fraud prevention and
optional security features such as
Alias and Tokenized accounts.
• Convenience of flexible
connectivity options for payments
and messaging available 24x7x365.

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Opportunities
➢ Opportunity to realize your Digitization strategy
➢ Strategy is to think global with Regional accelerators.
➢ Chance to redesign the end to end journey
➢ 24x7x365 provides an opportunity to rework your Target Operating Model
➢ Modernize client connectivity e.g. API’s.

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Challenges
➢ Business Case Justification
➢ Batch vs Real time modernization of legacy platforms
➢ Regional Variations of ISO20022
➢ Build /Buy vs Replace/Modernize
➢ Variation in Retail and Corporate Use Cases
➢ Evaluation of Use Cases through the journey

22. Today’s Discussion…
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What is BLOCKCHAIN?
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Technology underpinning bitcoin, a public decentralized ledger
of all transactions
Also, known as distributed ledger technology, blockchain goes beyond
any cryptocurrency

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Distributed Ledger Technology is Exploding
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SOURCE: World Economic Forum, The Future of Financial Infrastructure, 2016
Biggest Blockchain Consortia

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From this…
To this…
Instant and bilateral
› Synchronization
› Latency
› Liquidity
› Risk
› Visibility
› Fees

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Simple consistent experience and pricing regardless of the underlying rails or
country corridors © 2017 Veem Inc. All rights reserved

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Thank You – Questions? …Let’s Connect
(m) 617.388.6207
nasreen.quibria@qinsights.net
nasreenquibria
@nquibria
Nasreen Quibria | Founder
(m) 617.470.4673
Douglas Green | Director
douglas.green@volantetech.com
(o) 781.321.1011
jcasali@neach.org
Joseph Casali | Senior Vice President
joecasali
@jcasali
douggreen