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Goodpods has curated a list of the 10 best PaymentsJournal episodes, ranked by the number of listens and likes each episode have garnered from our listeners. If you are listening to PaymentsJournal for the first time, there's no better place to start than with one of these standout episodes. If you are a fan of the show, vote for your favorite PaymentsJournal episode by adding your comments to the episode page.
Mitigation of P2P Fraud Begins with Education
PaymentsJournal
09/26/23 • 17 min
Zelle has laid the groundwork for what could be the massive P2P wave that has taken consumers and financial institutions by storm. Consumers want more convenient ways to pay, and this solution was the answer to many of their pain points. Consumers are now expecting their FIs to provide this type of P2P service as part of their regular offerings.
But many FIs are concerned about making the leap and possibly being on the hook for millions of dollars.
In a recent PaymentsJournal podcast, Karen Buell, SVP of Operations, Banking and Fintech Solutions at Paymentus, and Kevin Libby, Fraud and Security Analyst at Javelin Strategy & Research, discuss the true story behind the headlines of these P2P fraud schemes, how can fraud be confronted, and how FIs can enter the P2P market armed with information and not fear.
PaymentsJournalMitigation of P2P Fraud Begins with EducationPaymentsJournal Mitigation of P2P Fraud Begins with EducationPaymentsJournalP2P Expands Despite Growing Incidences of Fraud
With popular P2P platforms such as Zelle making the news, and with increased incidences of fraudulent attacks on consumers who have no recourse, it’s no wonder that many FIs are leery of adopting these payment platforms and offering them to customers.
“In 2022 alone, 28% of identity fraud scam victims that suffered a loss ended up losing that money through P2P transfers,” Libby said.
“That percentage is essentially flat year over year, but that’s a significant number of consumers, and from a consumer protection point of view, the fraud we’re seeing is enough to get the attention of consumer advocacy groups and regulators, and I think that’s why we’re seeing some of the headlines that we have.”
Headlines aside, consumers want an easier way to pay. They don’t always carry cash, and even if they do, it’s rarely the right amount. P2P payment platforms offer them a way to conceivably pay at any time, any place.
What FIs Can Do to Quell Consumer Fear Amid Growing P2P Fraud
The key to settling the apprehension customers feel about using P2P payment platforms is to provide education. Although fraud is still taking place, current statistics, according to Libby, show that “as a percentage of transactions, fraud on P2P platforms is very low.” In fact, reports have shown that the incidents are lower than 1% and even decreasing.
“FIs can do a lot to educate consumers that they don’t need to be afraid of these tools, of these payment methods, but they do need to be smart about using them,” Buell said.
Specifically, FIs should warn customers not to give away their banking credentials, as this seems to be a more common occurrence. Furthermore, implementing technology that protects consumers is essential for FIs to safeguard against and mitigate fraud.
Implementing challenge questions that only the consumer and the recipient would be familiar with would help offer that protection. This can also avoid situations where the sender might mistype a phone number or provide another type of vulnerability that can enable an account takeover to happen.
Preventive measures are key, as P2P payments are essentially real-time payments. They are immediate and final.
Buell emphasizes the importance of FIs’ role as a trusted partner, equipping customers with the critical knowledge they need to protect themselves and their accounts. Ultimately, FIs should empower them to use these platforms with confidence.
FIs should also educate their customers on what banks will never do or how they will never engage in a certain way with their consumers. For example, it’s important that FIs communicate with their customers that they will never ask for their PIN number or their one-time passcode.
“Analysts at Javelin, in our fraud and security practice, have been arguing for years that education is the cornerstone of any building plan designed for reducing fraud across most payment channels,” Libby said.
“I think that’s especially true for P2P fraud, particularly since many identity fraud scams culminate in P2P transfers. Susceptibility to scam victimization is largely about being educated about what’s out there, what scams are taking place, how to recognize them when you see them, and what to do if you believe you’ve been targeted.”
Knowledge is power. Educating consumers on some of the pitfalls of using these platforms better equips them to use the solutions carefully and responsibly.
“Another thing that FIs can do to reassure consumers is to let them know that they understand the fraud that’s taking place and that they’re employing and constantly refining very sophisticated fraud detec...
In 2023, Real-Time Payments Expanding Across the Globe
PaymentsJournal
09/19/23 • 24 min
In a recent podcast, PaymentsJournal talked with experts from different parts of the payments world to discuss how real-time payments are proceeding throughout the world, and particularly in the United States and Australia. It featured Elisa Tavilla, Director of Debit Payments, Javelin Strategy; Adrian Lovney, Chief Payments & Schemes Officer, Australian Payments Plus; Nathan Churchward, Payments Domain Lead, Cuscal; and Kate Knudsen, Senior Program Director, BHMI.
With the launch of FedNow, the United States has fully embarked on its journey toward real-time payments. Across the globe, real-time payments are creating not only competition among payment methods but also new use cases, making previously unattainable services accessible to businesses and consumers.
PaymentsJournalIn 2023, Real-Time Payments Expanding Across the GlobePaymentsJournal In 2023, Real-Time Payments Expanding Across the GlobePaymentsJournalYet the road to global ubiquity in real-time payments has challenges. Technical hurdles, legacy systems, and the imperative of interoperability need to be overcome. In a world with seventy-nine countries operating real-time payment systems, achieving cross-border real-time payments requires diplomacy and meticulous planning. Furthermore, the modernization of outdated back-office systems is imperative to keep pace with the exponential growth in real-time transactions. The good news is that businesses recognize this urgency and are upgrading technology infrastructures and streamlining processes.
Real-Time Payments in U.S. and Australia
Real-time payments are quickly becoming more widely available throughout the world. In the United States, FedNow’s launch in July is starting to increase traffic and demand for real-time payments.
“In the U.S., the FedNow service recently launched with 35 financial institutions,16 service providers, the Department of the Treasury, and more set to join,” Tavilla said. “The RTP network, run by The Clearing House, hit 500 million transactions with over 370 participating institutions. With two real-time gross settlement systems live in the U.S. now, I’m optimistic that it will help accelerate the growth and adoption of instant payments here [in the U.S.].”
In many cases, real-time payments are much more developed abroad. For example, Australia in 2018 launched its New Payments Platform (NPP) for real-time payments, and it has taken off ever since.
“Around 30% of the volume that was previously processed through the bulk Electronic Clearing System in Australia has now transitioned to NPP in the past six years,” Lovney said.
Initially, purchases on the platform were mostly P2P, but now, it is increasingly used by businesses and corporations. Some examples include paying taxi or Uber drivers at the end of their shifts and making insurance or emergency payments.
According to Lovney, the next phase of use cases will involve recurring (bulk) debit payments, such as subscriptions or utility payments.
“We expect to see bulk payments coming from businesses, corporations, and government entities, such as salary or dividend payments,” Lovney said. “Australia has set a goal to potentially phase out the ACH system by around 2030, approximately 12 years after the launch of NPP.”
As Churchward hinted, all of this is slowly creating significant competition among payment methods.
“During the pandemic, as cash usage declined and electronic payment methods increased, including ACH, we saw significant growth in account-to-account payments, especially person-to-person credits, accounting for 38% of the total payment volume growth,” Churchward said. “However, NPP’s growth has outpaced that of ACH. Currently, real-time payments represent 37% of all account-to-account credit transfers among our clients, which include banks and payment service providers.”
But real-time payments are creating new use cases, not just the substitution of existing ones.
“Payment service providers, in particular, are offering receivables management services to businesses using account-to-account payments that weren’t available before NPP,” Churchward said. “Customers love using Pay ID, a feature that links their mobile number or email address to their bank account—80% of payments received by our payment service providers from business customers use this feature.”
Challenges in Implementing Real-Time Payments
The United States has over 11,000 financial institutions, and many of them, especially the smaller ones, rely on legacy systems.
“Transitioning to a payment system that operates 24/7, 365 days a year will take time, and e...
03/13/25 • 18 min
Just as organizations are implementing artificial intelligence and machine learning in novel ways, cybercriminals are continually looking to incorporate AI into their attacks. The disruptive technology allows criminals to find targets more effectively, scale their efforts, and forge better attacks that are increasingly harder to detect.
In a PaymentsJournal podcast, Alex Cox, Director of Threat Intelligence, Mitigation, and Escalation at LastPass, and Jennifer Pitt, Senior Fraud and Security Analyst at Javelin Strategy & Research, discussed the AI-powered methods cybercriminals use, the impacts of AI-related fraud, and the ways that organizations can protect their customers and themselves.
A Big Data Problem
One of the areas where AI excels is in sifting through massive datasets to pinpoint an anomaly. Many organizations use that capability to identify fraudulent activity. On other hand, criminals use that functionality to find their next target.
“Bad guys have a big data problem that AI is helping them address,” Cox said. “For example, there was the MOAB list that came out recently, which is the Mother of All Breaches, and it had billions of username/password pairs. If you think about the magnitude of credentials that are available publicly, the amount of data makes it difficult. The bad guys figured out that if they put these things into language learning models and use AI to help them manage that data, they’re able to pull things out more efficiently and summarize it.”
Once criminals have parsed large data sets to find their target, AI can also be implemented to make fraud attacks more effective. In the past, phishing attacks were much easier to spot. There may have been incorrect grammar in the email, a logo that wasn’t quite right, or other cues that the communication was fraudulent.
“Enter AI and LLMs, and criminals can go to this LLM and say, ‘Help me craft this phishing e-mail based on this lure,’” Cox said. “It will write it for you in very convincing English language that appears it’s from a native speaker. Once you get past all the technical controls, the final barrier is the person. If the person can look at an email and think it sounds like a person, it’s not a phishing e-mail, and they respond to it, it has made the bad guys that much better.”
A Blended Threat
Another way that cybercriminals are employing AI is to create deepfakes, with the objective of either creating a convincing persona or assuming an existing identity. This ability is just one aspect of the growing AI arsenal available to criminals.
“The combination of these capabilities is significant,” Cox said. “Microsoft has analyzed how some of the bad guys use ChatGPT, and you see them using it the same way that the traditional good guys are using it. They’re summarizing, they’re getting help with coding, and they’re getting ideas on how to improve their attacks. With this blended threat, they are able to use AI to pull information on a target, based on their internet presence, and craft an attack that is potentially able to compromise the target’s machines.”
The powerful technology has led to a decrease in the technical sophistication required to carry out damaging cybercrimes. There has even been a shift toward AI agents, which are fully autonomous fraud engines. It means criminals can lean on artificial intelligence to do much of the heavy technical lift.
“AI is allowing these bad guys to do this en masse,” Pitt said. “We used to see phishing emails where you’d have one single attacker that would have scripts and send out a few phishing emails or a few social engineering attacks. Now it’s all being automated with AI, so it’s thousands of emails, thousands of social engineering attacks, thousands of malware attacks all at once. It’s just easier for them to get that information out there.”
People, Process, Technology
Just as criminals find new ways to implement AI, many financial institutions are searching for ways to combat these attacks. To do so, a three-pronged approach that considers people, process, and technology is required.
On the people side, it means education. Organizations should ensure that their employee base, and potentially their customer base, understands that fraud attacks are now more sophisticated. The end user should understand that they can never fully trust the communications they receive, and they should question unusual asks.
From a process standpoint,
Why Painless Payouts Matter
PaymentsJournal
01/23/25 • 22 min
The buzz is growing louder. Many merchants are tired of navigating intricate payout processes that drain valuable time and resources. They want to be rid of payment headaches and welcome more seamless efficiency. Merchants demand a cutting-edge payout solution that helps them focus on their business while giving them the peace of mind that the complexities of their payout operations have been managed.
A Personalized Payouts Experience
Payouts have historically taken a back seat to adding new payment acceptance functionality for consumers and the resulting experience can be fragmented and inefficient. Each market has its own set of payout rails that can be leveraged by domestic merchants but trying to cobble together a unified, global payout experience that allows for personalization has been a substantial challenge for organizations.
In a recent PaymentsJournal podcast, John McNaught, Senior Vice President and General Manager of Payouts at Worldpay, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed the importance of payouts, the ways merchants can customize the customer experience and the innovative tools that can optimize payouts.
No Longer Ignored
One of the main reasons there hasn’t been substantial headway in the payouts space is that it hasn’t been a high priority for many organizations. While merchants have fiercely competed over the shopper checkout experience, payouts have often been deprioritized and accomplished using traditional systems.
In the insurance industry, the payout experience was often purposefully neglected in the past. For example, an insurance company may have intentionally caused a poor payout experience by delaying the payment for weeks and sending a paper check in the mail. The company might have hoped that the check would get lost or stolen or the beneficiary would forget to take the check to the bank.
“That type of thinking has changed in the last few years because there has been an increase in competition,” McNaught said. “Particularly amongst marketplaces and similar platforms, the payout experience can drive overall ecosystem participation and directly generate more content and more goods for sale. It has made the payout experience something that can no longer be ignored and it’s a space where many platforms are now competing.”
As these platforms aim for global reach, they have faced significant challenges. Merchants have often relied on local payment rails accessed through traditional banking partners to pay domestic beneficiaries. However, when the beneficiary is located outside the merchant’s country, the payment experience often deteriorates dramatically.
“Oftentimes, the wrong currency arrives for the beneficiary and it might take three to five working days for the funds to arrive,” McNaught said. “The merchant might not know exactly how much to expect because correspondent banks will take off a varying amount from the transaction principal. It’s a horrible experience for beneficiaries and it’s a barrier to adoption for the service they’re being paid.”
Gradual Realization
In the past, many merchants held onto their cash as long as possible, a practice that —while giving businesses greater control over the timing and management of payouts —often led to inefficient processes. This manual approach lacked transparency and created a frustrating experience for consumers.
“In fairness to merchants, there weren’t many good solutions for payouts up until the last couple of years,” Apgar said. “Now that merchants have new tools available, they are realizing that the benefits of a positive customer experience outweigh what you gain by optimizing payouts to the benefit of the company. It underscores how important the customer experience has become in all facets of interaction.”
When payout beneficiaries become aware of mechanisms and rails that allow them to receive payments reliably, in their preferred currency, in real-time, and often at no cost, it could profoundly transform the payouts industry.
“I call that the Amazon effect,” Apgar said. “You just need one disruptor in the market to get consumers to say, ‘Why can’t it be that easy all the time?’ That effect will start to get traction in the payout space. As consumers continue to have positive payout experiences, they will want that from all their interactions.”
This realization has led to a dramatic shift in the way many companies offer payouts today — touting the speed of their payouts as one of their most important selling points. However, speed isn’t the only consideration. Many companies now process payouts via different payment rails and in the consumer’s preferred currency, all to remain competitive in a crowded market.
This grow...
Making the Most of the Recurring Payments Model
PaymentsJournal
08/01/24 • 11 min
As a reliable revenue stream, recurring payments help both organizations and their consumers by giving them the option to “set it and forget it.” However, ensuring that these recurring payments run smoothly can be a challenge when businesses face returns or declines due to errors, outdated payment information, insufficient funds or even fraud. With the right partner, a subscription model can help businesses run smoothly while ensuring sustained cash flow.
In a recent PaymentsJournal podcast, Suman Chaudhuri, global vice president of revenue growth at CSG Forte, spoke with Don Apgar, director of the merchant payments practice at Javelin Strategy & Research, about how businesses can take advantage of recurring payments.
Building the Model
When Dollar Shave Club first launched its direct-to-consumer subscription model, the company garnered attention by combining a higher level of brand engagement with competitive pricing. This shift from one-time to recurring payments highlights a growing trend among businesses, bringing much-needed stability to their cash flow. That stable income allows them to forecast more accurately, allocate resources more efficiently and invest in growth opportunities with greater confidence.
A good example would be what has transpired in the car wash industry.
“When you look at a business like a car wash as something that’s heavily weather dependent and has extreme revenue swings from day to day or week to week, to be able to stabilize the revenue with the membership and recurring payments is tremendous,” Apgar said. “A business like a car wash was 100% card present, and the migration to a subscription model is moving that payments activity from card present to card not present. From a processing perspective, it presents additional challenges, and the businesses that are making that transition may not be ready for card-not-present transactions.”
There are broader benefits, too. Businesses can leverage data from subscription payment models to gain insights into customer behavior and preferences, enabling them to tailor their offerings and enhance customer satisfaction.
Customer retention is another key advantage. Subscriptions can help create an ongoing relationship between a business and its customer, increasing the likelihood of long-term loyalty and ensuring their ongoing business by automating the repeat purchases.
The Autopay Revolution
Whether from retailers like Costco or Dollar Shave Club or from utility and insurance companies, customers expect to see an autopay option at checkout.
However, it’s important to note that recurring payments can fail for various reasons. Customers might get a new credit card due to fraudulent activity, or they might have insufficient funds in their bank account. Such declines and returns can cause cash flow issues that put extra stress on customer service teams to contact customers and retry payments.
Businesses that experience declined card transactions can consider using an account updater solution, which automatically updates the cardholder information for Visa, Mastercard or Discover. When these cards get replaced or reported stolen or lost, the updater ensures you have the new payment information, reducing the chances of failed payments. Businesses can also automate sending payment reminders ahead of time, so customers are reminded to update their account information or ensure their accounts are funded for the upcoming payment.
Failed payments can lead to service cancellations, which ultimately cause customer satisfaction issues. An experienced payment provider can guide the business through these challenges and offer solutions to automate payment retries, alleviating the burden on the customer service team.
While it might sound counterintuitive, businesses also need to make it easy for customers to cancel their recurring payments.
“We’ve all worked with a business that has their cancel payment button buried seven layers deep inside their website or their application,” Chaudhuri said. “That can be very frustrating, because when a customer makes up their mind to cancel their payment, they will find a way to cancel that payment. If you don’t make it easy for them, you’re increasing the burden on your call center and customer service teams because the customer will fire off a ton of emails or make calls to your call center.”
The Mechanics of Recurring Payments
Credit cards, debit cards and Automatic Clearing House (ACH) payments are all well-suited for recurring payments. However, ACH offers several advantages over credit cards. For one, accepting ACH payments usually costs the business less. Additionally, account numbers typically change far less frequently than credit or debit card numbers. An...
03/22/21 • 20 min
03/04/21 • 22 min
06/20/22 • 14 min
The fight for consumer mindshare is more competitive than ever. Customers are bombarded with messages in a number of different channels, and standing out among the noise can be difficult for merchants.
The key to doing so is to deliver targeted, relevant promotions and offers in the mobile channel at the right time. To learn exactly how merchants can accomplish this, PaymentsJournal sat with Amit Chhabra, Head of the QSR/Restaurant Merchant Subsegment at ACI Worldwide, and Don Apgar, Director of Merchant Advisory Services Practice at Mercator Advisory Group.