14 Nov 2024 Sumner Francisco from BNY on Open Banking and Pay by Bank
episode
Off the Rails from the U.S. Faster Payments Council - FPC
29 min
1 speaker
6 chapters
transcribed 1 month ago
Transcript
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Transcript generated automatically by AI and may contain errors.
What is the overall focus of the conversation with Sumner Francisco on open banking and pay‑by‑bank?
Off the rails from the US Passor Payments Council.
I am Reed Utanin, Executive Director of the U.S. Faster Payments Council, and this is Off the Rails from the U.S. Faster Payments Council, sponsored by Open Payment Network. Today I'm talking with Sumner Francisco, head of Bankify at BNY. Sumner and I continue what feels like has been a prolonged conversation about pay by bank that's been going on for a lot of the second half of 2024. We get to a lot of the details on what's going on there. And as I mentioned last time, uh we are planning to release the second episode of November one week early on November twenty first. So those of you in the United States driving to your holiday destinations will have something that is sure to be fun for the whole family to listen to.
Then in December we'll be doing episodes on the first and third Thursdays instead of our normal second and fourth Thursdays to avoid those December holidays. And with that, I Program Nope, let's get right into that conversation with Sumner.
All right. We are joined by Sumner Francisco with B N Y. Hey, welcome to the show.
Thanks, Rek. Thanks for thank you very much for having me.
All right, let's jump in. Uh we've been talking a lot about pay by bank on the show this year, and I think, you know, for good reason. But why don't we start with you by hearing some of the things you're seeing in pay by bank generally and what you think is feeding into the trends that are causing every guest I have to want to talk about it.
Yeah, sure. Um, you know, I think there is definitely a resurgence uh of pay by bank um as evidenced by the number of guests that you had on that that talk about it. Uh but there's a reason for that, right? Um in one piece of education I that I see that needs to uh take place that that I've observed is that um there's a common misconception that Bankify is is a new a new concept. Uh when really actually it's not. Uh pay by bank is something that's been around for as long as ACH has been around, really, right? Um, you have merchants out there that are already leveraging ACH and their consumers are paying them by ACH. But when we look at who are those merchants that are doing that, namely the um the the underlying payment flows they support are um are recurring in nature.
So we're talking about Um utility companies, telecom telecommunication companies, generally those companies are already accepting ACH transactions. So there's already precedent for this here in the US where merchants are allowing their consumers to pay them using a bank account. Um, what is new here in the US and why I say it's a resurgence, uh, is this new concept of open banking. And it's not very new. It's it's new for us here in the US, but around the globe it's not particularly new. Um but open banking is a is a set of technology or or or a principle that helps shift uh how payment account information is collected uh and shared from the consumer that has the bank account uh to third parties that that need that account for one reason or another, the main reason being to set up a a payment.
Uh, in in the advent of open banking, or what open banking is allowing companies to do is to uh reevaluate, well, what can I do now with open bank? What does uh open banking unlock for me in terms of pay by bank? Um, and more specifically in terms of one-time payment use cases, right? Right now, today, and You couldn't go to your grocery store or you couldn't go to your big box retailer and pay using your account. This is not an option that's generally supported. Um But in the advent of open banking, that makes it actually reasonable and feasible for these types of retailers to to actually uh it makes it practical for them to quite honestly uh support bank payments. Now They say bank payments, obviously this referring to ACH, but also now increasingly in the discussion is uh immediate payments as well.
And right, I'm talking about RTP, talking about about Fed now. And there's so much going on in the immediate payment space that's very exciting.
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Chapters
6 chapters
1
What is the overall focus of the conversation with Sumner Francisco on open banking and pay‑by‑bank?
0:05–6:39
2
How does open banking change the way merchants collect and use bank‑account information?
6:39–12:16
3
Why is pay‑by‑bank considered a resurgence in the United States today?
12:16–18:38
4
What consumer pain points does open banking solve for one‑time and recurring payments?
18:38–23:22
5
How do tokenized account numbers improve security and usability for pay‑by‑bank?
23:22–27:39
6
What are the cost advantages of pay‑by‑bank compared with card payments for merchants?
27:39–29:10
Speakers
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