Nacha Payments 2012 Round-up

Last week I was in Baltimore for the Nacha Payments annual event, a regular fixture on my calendar. I just wanted to share some impressions, some of my own, others themes from the many conversations I had. For those of you who’ve not been, it’s a large event – registrations this year were around the 2500 mark, with just under 100 exhibitors. But for many it’s the conference itself that’s the attraction, with approximately (I haven’t counted!) 160 sessions, may running concurrently in 6 tracks. A quick word on the event overall. As an analyst we spend a lot of time attending events like these – indeed, you could easily do nothing but! Whilst a large number of attendees, a concern voiced by a couple of clients was that it both felt smaller in terms of attendees (something I’d have to agree with), and lower in level of attendee. There were some complaints that the exhibition was something of a poor cousin, relegated to the basement, a long way from the exhibition. At least one fellow delegate asked me where it was, though I have to say it was very well signposted. I feel that the event is still a must for most of us, but with budgets tight and getting tighter for many, ensuring the events deliver for attendees is an absolute imperative. At shows like this, we rarely get chance to attend many of the sessions, as we’re meeting clients & prospects, and walking the floor. I’ve usually caught up with the sessions by listening to the replays afterwards, so I was very disappointed to see that the sessions weren’t being recorded this year. A few themes did come out though. Of those I or those who I spoke to attended, the most animated audience award goes to that discussing the impending 1073 rule. It was standing room only, implying that the audience knew that it was an important topic. Yet the response of the audience suggested rather different – there was a palpable sense of disbelief at what was going to happen very soon. As an aside, I’d be very interested in hearing any opinions or insight on the topic. Mobile loomed large on the agenda. It’s not an area that I specifically focus on but I was struck by the diverging opinions. On one hand, some banks were saying that those customers who used the mobile service were the most profitable. However, others also said they didn’t know how or when they’d make money from mobile. That same polarisation of views came to the surface regarding faster payments in the US. The common debate has been whether the introduction of such as service would impact revenues from wire payments. The discussion seems to have moved on somewhat, with more (though not all) believing moving up the processing window to create a same-day service would have little impact. However, the discussion, probably fuelled the debate hosted by the Fed in September focussed more on immediate funds transfer. Whilst admittedly a small sample set, the discussions here seem to have moved from “should we?” to “how do we?”, with many pointing to ClearXChange as being the most likely to capitalise on this growing interest. The main question here is if or when the proposition moves from P2P to A2A, and captures the demand that AFP surveys show that corporates have. The nay-sayers interesting didn’t seem to questioning the demand, but focussed solely on the likely ability for banks to alter their systems to cope with the challenges that such speed brings. Overall, I was left with an impression that the industry was bracing itself for considerable change over the next few years, some driven by increasing regulatory intervention (welcome to Europe!), and others driven by the recognition that increasing demands from corporates and consumers require changes in the back office part of the system, as well as the front-end. ACH is playing a vital role today – but with some investment, could play an even greater role tomorrow. See you in San Diego for Payments 2013!