Daniel Stanton, managing director and global head of Transactional FX at Bank of America, stated during a conversation with media representatives that as financial institutions move onto real-time payment networks, providing corporate clients with faster payment capabilities will be a long-term project.
The Clearing House’s RTP network was launched in 2017. The FedNow Service, the central bank’s foray into real-time payment transactions, was introduced in 2023. The mentioned examples are what can be called evidence of the growing importance of payments of the specified category.
Daniel Stanton stated that real-time payments are the journey that Bank of America is currently undertaking. According to him, the relevant process is an action within the framework of the mentioned definition, not only from the point of view of a financial institution but also in the context of the fintech area. He stated that this is a joint journey to expand the capabilities and improve or even redesign the bank’s infrastructure, to get out the 9 to 5 thought process, and to operate 24/7 wavelength.
Daniel Stanton suggests that in the long term, real-time payments will become commonplace, reflecting the ways information is exchanged and increasingly faster ways in which people live. According to him, for enterprises cooperating with Bank of America, the benefits of the mentioned category payments are greater control over when and how funds their beneficiary is paid. It was also noted separately that this means that senders can better manage their working capital.
Along with the growth in pay-to-card and pay-by-bank use cases, Daniel Stanton was quick to underline that RTP is not a solution looking for a problem. According to him, Bank of America strives to bring this mindset to its customers, especially when they examine the ways and means that they are going to have to reconfigure their workflows and back-end processes with artificial intelligence in the mix to provide additional lines of defense in the fight against money laundering and transaction monitoring.
Daniel Stanton stated that the workflow will need to be changed not only to simultaneously make transactions and send information but also to receive and digest the data provided to truly take advantage of the transparency and speed of RTP. According to him, it is also necessary to recognize that not all transactions need to be carried out in real-time, and partnering with financial institutions such as Bank of America can help companies determine the applicability of specific payment categories for some use cases, but not for others. Pay-by-bank, as Daniel Stanton noted, is just one of the types of real-time payments that can be embedded at points of sale or within an e-commerce experience. He stated that pay-to-card can improve B2C interaction, for example, with the gig economy.
According to Mr. Stanton, payments from a cross-border standpoint are inundated with friction. It was noted that currently in the global economy, it is observed that user experience is of paramount importance, and RTP opens the way for additional value. The same applies to cross-border commercial payments, where costs are streamed, and all parties know exactly where and when payments have been sent – and when they will arrive and settle. Daniel Stanton stated that this level of transparency is a factor contributing to the growth of loyalty between buyers and suppliers, and helps them navigate the volatility of foreign exchanges. Bank of America, for its part, has integrated its currency solutions into a real-time payment value chain to improve supply chain dynamics. The mentioned category of payments is already transforming technology, media, telecom companies, remittance providers, and e-commerce as they digitize payouts.
Daniel Stanton noted that there is a certain level of instant gratification that bank’s clients and their town end customers desire. According to him, a financial institution should be ready to meet the corresponding demand.
As we have reported earlier, Bank of America CEO Says Financial Industry to Jump Into Crypto Payments.
