On September 20, ACI Worldwide announced a development in their multi-year partnership with Microsoft. Using Microsoft’s Azure environment, ACI has launched its Real-Time Payment Cloud (RTPC), leveraging Microsoft’s cloud technology to enhance real-time payment infrastructure. 

Initially, the companies deployed FedNow connectivity, developed as a result of their involvement in the payment rail’s pilot program since its launch in 2021. However, they aim to enhance the offering, adding The Clearing House RTP rail as well as ACH and cross-border RTGS capabilities as the product rolls out. 

“The cloud, as well as increasing the software’s speed to market and connectivity, brings an additional level of disaster recovery,” said Craig Ramsey, Head of Real-Time Payments at ACI Worldwide. “For Instant payments, when you’re meant to be running 24/7, you can’t have a service that doesn’t provide a 24/7 service. Azure gives us a path to offer that service, which under traditional data centers, is either very hard to achieve or very expensive to achieve.”

He explained that the software’s position on the cloud is designed to ensure no downtime, a factor that has become increasingly important for institutions to offer real-time payment capabilities to their customers. 

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Moving Banking from “Receive-only” 

FedNow’s July launch has created a sense of urgency in the banking sector, according to Mihail Duta, Director of Solution Consulting and Transaction Banking at Finastra. While real-time payment networks have been available for some time, the existence of a federally developed network is said to have caused a shift. Institutions previously unable or unwilling to develop real-time payment solutions for their customers are starting to explore options driven by consumers’ desire for Zelle-like capabilities. 

“We’re undergoing a sea change in Americans attitudes and expectations around payments,” said Joshua Siegel, Partner at Capco. “The world and the economy in the US, specifically, is becoming geared towards much faster delivery of products and services. And in the payment ecosystem has to support them.”

However, as of yet, much of the focus has been on creating “receive only” capabilities. Deterred by the possible fraud risks and the need to shift from business hours to 24/7 operation, many banks have been slow to allow customers the ability to send real-time payments. This has affected smaller institutions in particular as they may lack the resources to build in-house solutions. Many of these institutions have turned to core banking providers to provide them with infrastructure to support real-time payments and have been restricted by a lack of solutions.

“Some small banks are prevented from being able to send because their core banking provider 

isn’t yet supporting it,” said Ramsey. “That puts them in a non-competitive situation.” He explained that the lack of send capabilities could mean institutions lose customers to competitors that allow them to send as well as receive. 

As well as using the cloud to support the uninterrupted running of the system, the ACI system is built to allow customers to send and receive payments while applying risk scoring to transactions. 

Real-time Fraud Detection To Match The Speed Of Payments 

The risk score attribute of the solution aims to support institutions’ ability to combat instances of fraud within their real-time payment system. The threat of fraud has been increasingly connected to real-time payment usage, with other nations noting increases in real-time payment-related fraud while fraud related to card payments reduced.

RELATED: FedNow: Instant Payments or Instant Fraud

Built into the ACI solution is a machine learning model that updates information in real-time on the levels of risk associated with payments on the platform.  

“It’s a fraud model that’s constantly being updated,” said Ramsey. “It’s being applied to the systems according to the payments happening on the network.” 

“In the old world, fraud departments would create models for fraud detection,” he continued. “They would execute the model, looking over past transactions for fraud patterns. They would run the system through every three months and update their information. We’ve created a system that learns the fraud as the transactions come through, based on what’s been declined, what’s being accepted, and other input factors.”

He explained that this could effectively combat Authorised Push Payment (APP) fraud. APP fraud has increased along with instant payment usage, taking advantage of transactions’ irrecoverability. In some areas, banks are now being held responsible for reimbursements of funds lost as a result of APP fraud, increasing institutions’ vulnerability to risk.

“When you look at an individual APP fraud, the payment itself just looks like a normal payment,” said Ramsey. “There’s nothing that stands out as an issue. But when you look at the patterns for that customer and the circumstances around the payment, the scam behind the payment becomes clear. That’s what our AI risk-scoring model is targeting.”

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