Businesses Drive Up Demand For Settlement Speed

A forward-thinking corporation’s massive bet on bitcoin may not be the boon that blockchain had hoped for as it continues to entice treasurers as a cross-border-friendly payment rail.

This week’s Payment Rail Innovation roundup looks at finance chiefs’ continued hesitancy toward cryptocurrency and finds businesses instead embracing innovations on top of more tried-and-true infrastructure to accelerate settlement and digitize transactions.

Treasurers Not Yet Convinced On Crypto

The buzz this week in corporate finance has undoubtedly been taken over by talk of Tesla’s bitcoin buy and its broader implications for corporate finance. Some analysts say the move is part of a broader inevitable trend in the treasury department as businesses embrace digital currency for a variety of use cases, including payments.

But it’s not necessarily a guarantee, according to a survey by Gartner. According to the company’s latest report, more than 80 percent of finance leaders said they plan to never hold cryptocurrency on their companies’ balance sheets. Merely 5 percent said they plan to invest in crypto within a year, while 16 percent said they plan to adopt the technology sometime in the future.

Alexander Bant, Gartner Finance chief of research, said in a statement that the findings all come down to “a lot of unresolved issues when it comes to the use of bitcoin as a corporate asset. It’s unlikely that adoption will increase rapidly until we get more clarity on these challenges.”

Pelican Backs SWIFT’s Cross-Border SMB Payment Effort

Payment technology SWIFT is lending its support for SWIFT gpi and use of the rail to facilitate low-value, cross-border, small- to medium-sized business (SMB) payments, the company said. Pelican is backing SWIFT’s initiative to roll out the low-value global payment service, slated to go live for SMBs as well as consumers by April of this year. The project is an expansion of the gpi rails that initially launched to address friction in high-value, cross-border corporate payments, not only facilitating faster movement of funds across borders but also boosting the transparency of the transaction for both sender and receiver.

According to an announcement, Pelican is integrating its intelligent payment data enrichment and validation technologies to facilitate straight-through processing of transactions for both originating and beneficiary banks.

“The success of SWIFT gpi, which is used by thousands of banks and carries billions of payments worldwide, will allow efficient transaction processing and full transparency,” said Parth Desai, CEO of Pelican, in a statement. “This provides an opportunity to transform the experience in the [SMB] and consumer payment markets.”

Nacha Notches ACH Volume Uptick

Nacha has posted another upswing in ACH Network volume, with B2B payments accounting for a healthy portion of the increase.

According to new statistics released by Nacha, B2B transaction volume increased by nearly 11 percent in 2020, reaching 4.4 billion transactions, making up one of four payment categories that saw more than 10 percent volume growth on the ACH Network.

Nacha also released new evidence that businesses continue to migrate away from paper checks, with check volume dropping by more than 21 percent last year. Today, that means checks account for less than 4 percent of ACH Network payments.

Cashflows Eyes Impact Of Faster Transaction Settlement

While the movement of funds across rails can be beneficial to businesses, for small merchants, having faster access to capital through an accelerated settlement of payment is key to cash flow management.

In an interview with PYMNTS, Cashflows CEO Amanda Mesler discussed the motivation behind the release of Anytime Settlement, a solution announced as the result of the company’s proprietary payment processing infrastructure that accelerates settlement of card transactions so merchants can access those funds more quickly.

Looking ahead, she said, SMBs will be increasingly demanding of faster settlement across payment rails, be them cards, ACH or otherwise.