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Power of Payments Ep. 24: Talking FedNow and real-time payments with Bottomline’s Jessica Cheney
March 01, 2023
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  • Jessica Cheney, VP of Product – Digital Banking Solutions at Bottomline Technologies, joins host Ismail Umar on this week’s podcast.
  • She discusses the current state of adoption of real-time payments in the US, and how the launch of FedNow is going to impact the banking industry.

Welcome back to the Power of Payments podcast. I’m your host Ismail Umar, and today I’m joined by Jessica Cheney, VP of Product for the Digital Banking Solutions group at Bottomline Technologies.

Jessica has been with Bottomline for over a decade. Prior to that, she held similar roles at a number of other fintechs, and was also part of the commercial product management group at US Bank. She has been involved with real-time payments for many years now, and says she has a comprehensive outlook on how payments impact financial services from a commercial, fintech, and retail perspective.

In our conversation today, Jessica discusses the current state of adoption of real-time payments in the US, and how the launch of FedNow – the Federal Reserve's instant payment service – is going to impact the banking industry. She also talks about how SMBs can use real-time payments to improve their day-to-day operations, and the overall impact that RTP adoption will likely have on banks, businesses, and consumers in the coming years.

The following excerpts were edited for clarity.

I lead the product management function for the banking segment of Bottomline Technologies. I've been there for about 11 years now. Prior to that, I was in similar roles at other fintech companies – S1 and Clear2Pay, most notably. I’ve also worked directly in the financial services industry in several areas. I was part of the commercial product management group at US Bank, and led the retail group at Skowhegan Savings Bank. So I sort of have a very comprehensive perspective on how payments impact the financial services world from a commercial perspective, a fintech perspective, and a retail perspective. I've also been involved with real-time payments since its conceptual launch with the Federal Reserve, for several years now. That really sparked my interest with the Fed Task Force, and I've been really involved in the industry ever since.

Given your expertise, what would you say is the current state of adoption of real-time payments in the US compared to other parts of the world?

I think that, to answer that question, it really depends on how clinical we’re going to be in using the term ‘real-time payments.’ And that is a concept that's applicable in the US and throughout the world. The term is really an umbrella that covers many payment options, especially in the US: P2P payments from Zelle, Cash App, Venmo, Same Day ACH supported by NACHA, the Fed, and The Clearing House, RTP launched by The Clearing House in November 2017, and now FedNow launching the instant payment network that's coming live this summer. In general, to answer your question, I would describe this as an industry that’s continuing to grow, though a bit more slowly lately. The P2P space continues to drive most volume and growth. Zelle reported over 550 million transactions, representing the movement of over $155 billion in June. That’s a 27% growth from 2021. Venmo is reporting more than $63 billion moved in Q3, a 6% growth over their record year in 2021.

Now, Same Day ACH, and ACH in general in the US, is continuing to grow. It saw 6% growth in Q3, with Same Day seeing the most increase in use. There were 176 million Same Day ACH payments made. And that's a huge, 102% increase since Q3 2021. The RTP network has also seen huge growth, reporting 49 million transactions in Q4, moving about $22 billion, another 9% growth over Q3.

When I really dig into this a little bit deeper, though, I think that there are some things driving this. There's a recent American banking article that noted disbursements and rent payments are among the fastest-growing Zelle use cases. And that kind of indicates that more users are relying on Zelle’s speed to make last-minute billing deadlines. The number of companies including insurance providers, education and government agencies, using Zelle to transfer funds also dramatically increased, 87% in the second quarter of 2022, compared to the year before. So while all this growth seems impressive, I think the industry is actually on the brink of truly having breakout adoption. There’s a saying that goes, ‘A rising tide lifts all boats.’ This tide is growing in the RTP industry, aided by the FedNow launch, as well as more B2C and B2B adoption. The current economic condition is also ripe for assisting growth in real-time payments as personal and corporate liquidity management becomes more and more important.

Can you share your thoughts on the kind of impact FedNow is going to have on the financial industry?

The biggest thing is that the Fed has for a very long time been seen as the preferred payment network provider. And that's probably based on their perceived stability and competitive neutral reach to all financial institutions. The Clearing House, for example, has roughly 280 participating banks. The Fed has a built-in customer base of over 9000 financial institutions that FedNow will now be offered to. That sheer jump in volume of banks reached that will have access to real-time or instant payments will lead to a really game-changing adoption in the future. The launch of the FedNow service also removes the “let's wait and see” excuse that some banks have used when it comes to real-time payments. Many until this point have seen RTP as only the purview of the largest banks in the US. Just as an aside, The Clearing House members that were initial drivers of RTP, and those member banks, are among the largest in the US. What the launch of FedNow does is make RTP mainstream in America. The Fed and NACHA launched ACH and direct deposit in the mid-70s, and that helped make ACH mainstream. Today, 94% of Americans get paid that way. FedNow has the potential to do the same thing with real-time or instant payments.

Once FedNow is launched, do you expect to see rapid adoption of real-time payments in the US, or do you think it will slowly build up over time?

Unfortunately, I think at least the next couple of years, we will continue to see a little bit of a slow adoption curve. And then we will reach a major launching point where we will have critical mass in both receivers and senders of real-time transactions. Too many banks have waded into this pool as receivers only, and not enough have jumped into the deep end to be senders as well. And you really can't have a network that is full of receivers but not senders and be successful.

Another unknown factor in how much interoperability will occur between these two networks will really impact adoption. Once we know that, and though the interoperability between the two networks is established, that's the linchpin of growth going forward. The networks have both been set up for interoperability, and they’re using similar message sets, similar operating guidelines and value propositions. But actual interoperability remains to be improved between the two.

A key point here is that eventually, the demand that we're seeing in the P2P space will also push into the business payments space. That, along with FedNow's reach, will really push adoption rates along. When payments become mainstream, their value is more widely understood, and that obviously drives demand as well.

Do you think there is a sufficient level of awareness among American businesses about what adopting real-time payments would mean for them? And what do you think is most important for FIs and businesses to understand about adopting real-time payments?

Unfortunately, I think the comprehension level of the value of RTP remains low. I’ll share a story with you. I was talking to a CFO of a midsize fintech about RTP about 18 months ago. And his initial question to me was, ‘Why on earth would I want to pay invoice faster? I want to hold on to my cash.’ So I went on to explain that RTP is actually the liquidity and cash management tool that helps him do that better than any other payment type out there. RTP lets you wait till the absolute last minute to pay an invoice, and either take advantage of payment terms offered or to get shipments released and delivered when needed.

I think lots of energy is now going into the education and benefits for businesses to use RTP to make payments, and RFP, request for payments, to get paid. First and foremost, I think that RTP and RFP are key business operating tools for small businesses. They help with liquidity management, financial planning, customer service, and efficiencies in both the accounts receivable and accounts payable processes.

First of all, liquidity management. As I mentioned before, RTP allows small businesses who are managing their cash really tightly to make payments at the absolute last minute. Sure, they can be scheduled in advance, but when cash is tight and you need to pay a vendor just in time, RTP provides that. RFP, or request for payment, is the ability to send an electronic invoice and request a real-time payment in response. This can really streamline the invoice to collection process for any small business and aid in reducing collection time. It is also a very cost-efficient way to send electronic invoices. Many merchant services providers are now offering instant settlement, providing access to funds immediately, which helps small businesses meet their immediate cash flow needs. What these merchant services are doing is, at the end of any particular sales period, where the small business will close out their credit card sales for the day, the merchant service company is providing settlement to these small businesses via RTP. On the flip side of this, RTP can also be used for instant payroll, and it can help many small businesses attract employees in this highly competitive labor market.

The other part of this that I haven't really talked about before is the fact that real-time payments can also have an accompanying real-time acknowledgment, meaning a payment that has been made by RTP can be acknowledged by the receiver. And that can also aid in reducing some of the financial anxiety that many small businesses are facing when they make just-in-time payments.

How do you think the current macroeconomic conditions and market volatility will impact the adoption and effectiveness of real-time payments?

I think that it’s absolutely going to have an impact. We don't have to look too far to see proof of that. During the COVID-19 pandemic, the use of cashless, contactless, and real-time payments grew like crazy. You just have to look at the volumes from Zelle, Venmo, and Cash App to see that impact. But today's economic conditions are driving consumers and businesses away from wanting to use credit or credit cards as means of payment – the interest rate’s just way too high. Companies and consumers alike do need to wait till the last minute to make key payments for things like rent and utilities, but they also need the financial certainty that these last-minute payments have been acknowledged. And RTP can do that.

Looking into the future, what kind of impact do you think the adoption of real-time payments is going to have on banks, businesses and consumers in the coming years?

I really think that RTP is the next revolution in payments. I think it’ll be a soft change. We've evolved into real-time payments in the P2P space being mainstream. And that will continue to flow into the B2B and B2C aspects of this industry. Financial institutions are already making investments to take advantage of this. It’s just going to be the next expectation, just like the expectation we have that the phones we carry in our pockets are mini-computers and basically can do everything that we want to be done instantaneously. That's the natural evolution and the next wave of payments in the industry.

There's a couple of things that I did want to mention, though. I think that people get hung up on the speed of these payments. But there are other aspects of RTP that also add value. The added value to this also takes advantage of some of the other things that we've grown very accustomed to. And that’s the instant communication that goes along with these payment types. There’s the ability to have these real-time payments instantly acknowledged. There are communication vehicles built into the payment rails that allow the sender and receiver to communicate with each other about questions that they have, either about the amounts that have been received or the amounts that have been requested to be paid. Again, it kind of takes what’s become very mainstream in our personal lives, with the use of instant messaging and texting, and goes along with the natural change in payments that’s occurring. I think that's the key to why RTP is the next revolution in payments.

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You want to build real-world assets onchain.

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Nation First outlines how the Israeli attack on Iran was planned by the Deep State and the Military Industrial Complex over 15 years ago.

Prepare to have your mind blown

~Namasté 🙏 Crypto Michael ⚡ The Dinarian

Dear friend,

What just happened in Iran wasn’t a surprise attack. It wasn’t a last-minute decision. It wasn’t even Israel acting alone.

It was a war plan written years ago — by men in suits, sitting in think tanks in Washington and New York. And yesterday, that plan was finally put into action.

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Let’s start with what just happened.

Israel launched a massive, unexpected strike on Iran. They hit nuclear facilities. They killed military generals. They struck deep inside Iranian territory — and now the whole region is on edge, ready to explode into full-blown war.

The media is acting shocked. But I’m not. You shouldn’t be either.

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Because we have the documents. They told us this was coming. Years ago.

Exhibit A: The Brookings Institution.

The Brooking Institution is a fancy name for what’s basically a war-planning factory dressed up as a research centre. Back in 2009, Brookings published a report called Which Path to Persia?

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“The United States would encourage — and perhaps even assist — the Israelis in conducting the strikes… in the expectation that both international criticism and Iranian retaliation would be deflected away from the United States and onto Israel.”

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  • Which Iranian sites to hit (Natanz, Arak, Esfahan).

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You’re paying attention.

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Pray for Iran’s civilians.

Pray for the Israelis caught in the crossfire.

Pray for a President who still wants peace.

And pray that we wake up before it’s too late.

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But the truth has just begun to spread.

Until next time, God bless you, your family and nation.

Take care,

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Source:

George Christensen is a former Australian politician, a Christian, freedom lover, conservative, blogger, podcaster, journalist and theologian. He has been feted by the Epoch Times as a “champion of human rights” and his writings have been praised by Infowars’ Alex Jones as “excellent and informative”.

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— George Christensen.

Find more about George at his www.georgechristensen.com.au website.

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The Possible Impact Of USDC On The XRP Ledger And RLUSD
Key Points
  • It seems likely that USDC on the XRP Ledger (XRPL) boosts liquidity, benefiting XRP, though some see it as competition for RLUSD.
  • Research suggests both stablecoins can coexist, enhancing the XRPL ecosystem.
  • The evidence leans toward increased network activity being good for XRP, despite potential competition.

The recent launch of USDC on the XRP Ledger has sparked discussions about its impact on the ecosystem, particularly in relation to RLUSD, Ripple's own stablecoin. This response explores whether this development is more about competition for RLUSD or if it enhances liquidity on the XRPL, ultimately benefiting XRP.
 

Impact on Liquidity and XRP

The introduction of USDC, a major stablecoin with a $61 billion market cap, likely increases liquidity on the XRPL by attracting more users, developers, and institutions. This boost can enhance DeFi applications and enterprise payments, potentially driving demand for XRP, the native token used for transaction fees. While some may view it as competition for RLUSD, the overall effect seems positive for the XRPL's growth.
 

Competition vs. Coexistence with RLUSD

USDC and RLUSD cater to different needs: USDC appeals to those valuing regulatory compliance, while RLUSD, backed by Ripple, may attract users preferring ecosystem integration. Research suggests both can coexist, increasing options and fostering innovation, rather than purely competing.
 

Detailed Analysis of USDC on XRPL and Its Implications

The integration of USDC on the XRP Ledger (XRPL), announced on June 12, 2025, by Circle, has significant implications for the ecosystem, particularly in relation to RLUSD, Ripple's stablecoin launched in 2024. This section provides a comprehensive analysis, exploring whether this development is more about competition for RLUSD or if it enhances liquidity on the XRPL, ultimately benefiting XRP.
 

Understanding RLUSD and Its Role

RLUSD, Ripple's stablecoin, received approval from the New York Department of Financial Services (NYDFS) in 2024 and is designed to be fully backed by cash and cash equivalents, ensuring stability. It is available on both the Ethereum and XRP Ledger blockchains, aiming to enhance liquidity, reduce volatility, and serve cross-border payments. With a current market cap of $413 million, RLUSD is smaller than USDC's $61 billion but has regulatory credibility, particularly appealing to institutions.
 

Impact of USDC on the XRPL

The launch of USDC on the XRPL is a significant development, given its status as the second-largest stablecoin by market cap.
 
Key impacts include:
  • Liquidity Boost: USDC's integration can attract more users, developers, and institutions, increasing overall liquidity. This is crucial for DeFi applications, as Circle's announcement emphasizes its use in liquidity provisioning for token pairs and FX flows.
  • Increased Utility: USDC enhances the XRPL's utility for enterprise payments, financial infrastructure, and DeFi, potentially making it more attractive for global money movement and transparent settlements.
  • Regulatory and Institutional Appeal: As a regulated stablecoin issued by Circle, USDC can bring institutional users to the XRPL, aligning with Ripple's goals for regulated financial activities.
  • Network Growth: Supporting a widely recognized stablecoin like USDC on 22 blockchains, including the XRPL, increases the network's visibility and adoption, potentially driving more activity.

Competition vs. Complementarity with RLUSD

While USDC's launch could be seen as competition for RLUSD, the evidence suggests a more nuanced relationship:
  • Competition: Both are stablecoins on the XRPL, and USDC's larger market presence ($61 billion vs. RLUSD's $413 million) might attract users and developers away from RLUSD. However, competition can drive innovation, such as lower fees or better services, benefiting the ecosystem
  • Complementarity: Different stablecoins cater to different needs. USDC appeals to users valuing regulatory compliance and widespread adoption across multiple blockchains, while RLUSD, backed by Ripple, may attract those preferring ecosystem integration and regulatory approval from NYDFS. The XRPL can benefit from having multiple options, increasing liquidity and fostering a diverse ecosystem.
  • Coexistence Benefits: Research suggests that having multiple stablecoins enhances liquidity and provides users with more choices, potentially leading to higher network activity. For example, institutions might use USDC for global payments and RLUSD for specific XRPL-integrated applications, creating a symbiotic relationships.

Impact on XRP

The introduction of USDC, alongside RLUSD, is likely beneficial for XRP, the native token of the XRPL, for several reasons:
  • Increased Liquidity and Activity: Higher liquidity on the XRPL, driven by both stablecoins, can increase transaction volumes. XRP is used for transaction fees, with some fees burned, potentially reducing supply over time and increasing demand.
  • DeFi and Enterprise Use Cases: Both USDC and RLUSD enhance DeFi and enterprise applications, such as liquidity pools and cross-border payments, which can drive demand for XRP as a settlement token.
  • Network Growth: A more liquid and active XRPL is more attractive to developers and users, potentially leading to long-term growth for XRP, as increased utility can drive its value.
Expert analyses, such as those from u.today and ledgerinsights.com, suggest the launch is a "massive boost" for liquidity and adoption, with RLUSD also playing a significant role.
 

Comparative Analysis: USDC vs. RLUSD

To further illustrate, consider the following table comparing key attributes:
 
Given the evidence, it is more accurate to view the introduction of USDC on the XRPL as beneficial for liquidity, which is ultimately good for XRP, rather than solely as competition for RLUSD. The XRPL benefits from increased options, with both stablecoins enhancing liquidity, utility, and network growth. While some competition exists, the overall impact is positive, fostering a robust ecosystem that can drive demand for XRP. This conclusion aligns with expert analyses and community discussions, acknowledging the complexity of the stablecoin market within the XRPL.
 

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