Feb 2019 - Market Perspective - Doc # US44843218
The Federal Reserve's Proposed Real-Time Rails Highlight a Brewing Big Tech and Retail Payments Revolution
This IDC Market Perspective provides insights into the Federal Reserve's announcement regarding developing a RTGS payments network. The Federal Reserve opened up a Pandora's box when it requested commentary from the market on potentially launching a new set of real-time rails. Demands from fintech and merchants for open innovation and choice in payment type will not disappear even if the Fed backs down from launching new rails. Banks and technology providers must get ahead of the slow-building revolution underfoot with innovative API frameworks and new payments models with value-added services.
"What will happen if the Fed and banks don't come up with an option for fintech and retail? Think China. A large majority of noncash retail transactions in that nation are handled through two fintechs: Alibaba's Alipay and Tencent's WeChat. In both cases, there is little reliance on card rails or bank infrastructure." — Rivka Gewirtz Little, research director, Global Payment Strategies