Episode 37: A world of payments: national stories, global impact

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Transcript of the recording

Elizabeth (Liz) Dempsey:
Hi, everyone, and welcome to Episode 37 of The PayPod. I'm your host, Liz Dempsey, and in today's discussion, we're revisiting another of our most popular mainstage sessions from The 2025 SUMMIT, A world of payments: national stories, global impact. 

In this session, Kristina Logue, our Chief Financial Officer, is joined by payments expert Kate Frankish, Nacha’s President and CEO Jane Larimer, and Jane-Renee Retimana, the Chief Strategy and Innovation Officer of Payments New Zealand. Together, they discussed the differences in similarities of their payment modernization journeys and what cross border collaboration opportunities exist.

Enjoy the discussion.

Kristina Logue: 
Good afternoon everyone, and welcome to our panel discussion, A world of payments, national stories, global impact. I think if you attended this morning's sessions, they set us up quite nicely for this afternoon, as you've heard a common theme around a collective effort to drive things forward. We're all experiencing challenges, and you got a good glimpse into some international benchmarks this morning. And so today we get a chance to dive a little deeper into some jurisdictions.

I am more than delighted to be joined today by three distinguished leaders who are experts in payment innovation across different regions of the world. As I'm sure we are all well aware, the global payment landscape is transforming at an unprecedented pace. While many of the challenges and opportunities we face are universal, the approaches to addressing them often reflect unique national contexts, regulatory environments and market dynamics.

Today we're going to explore how different regions are navigating their payment journeys, the lessons they've learned along the way, and how their individual paths contributed to the evolving global payment ecosystem. We'll discuss pivotal moments that have shaped each country's payment systems, examine cross-border collaboration opportunities, we're going to address the balance between innovation and risk management and look a little bit ahead into the future. With that, we'll start with a few introductions.

Kate Frankish: 
Hi and hi everybody. It's great to be here. My name's Kate Frankish and I'm from the UK as you can hear. I was the Chief Business Development Officer at Pay.UK, which is the UK's equivalent of Payments Canada until December last year. And now I work as a freelance advisor and consultant and I'm working with Payments Canada on the RTR and fraud implementation. So delighted to be here today and to share some stories from the UK and what to do and what not to do.

Jane Larimer:
Hi everyone, I'm Jane Larimer, I'm president and CEO of Nacha. We govern the US ACH network. Last year, the ACH network of the United States processed over 33 billion transactions valued at $87 trillion and running about a six and a half percent year over year rate.

Jane-Renee Retimana:
My name's Jane-Renee Retimana and I just now, in the New Zealand Maori language, just said thank you for having me here and just acknowledged your First Nations people here in Canada as well, in my introduction. Payments New Zealand is like Payments Canada and Nacha and Pay.UK. We govern the clearing and settlement systems in New Zealand, we run the payments monetization strategy and we also run industry lead open banking.

Kristina Logue:
Great. So we'll dive into our discussion now. I think it's fairly safe to say that each of your countries has undergone significant transformation in your national payment systems over the past decade and we here in Canada have been watching closely and to see what we can learn from each of you. So I was hoping we could start by: if you could share a pivotal moment or a decision that was taken in each of your jurisdictions that really helped shape your modernization and journey or how your ecosystem is currently facing. And if you have any lessons that you could share from that experience. So maybe Jane, we have two Janes, so Jane L, if you don't mind, give me a start.

Jane Larimer:
Thank you. So we don't have a mandate. We are market driven in the United States and we have currently, I think, a little bit fewer than 9,000 financial institutions. So it takes a lot of collective effort to move ahead. So one of the things that we are keenly aware of though, in 2008 was the advent and coming live of the UK's faster payments system. And so we were all aware of the need to start moving faster and that globally this was something that we're going to be doing.

So in the US and the ACH system, that's our batch system, we looked at same day ACH, and now we have four processing and settlement windows per day. We went live in 2016 with credits and in 2017 with debits and in 2017 the instant payments rail, RTP, came up and in 2023 FedNow came live too, the instant payments rails. And to give you an idea now of what volumes look like on those three rails, same day ACH in 2024 we had 1.2 billion transactions. We hit the billion transaction milestone, which was huge for us. They had about 340 million transactions on RTP and 1.5, a million and a half transactions on FedNow.

So one of the things that we really have seen, one of our lessons learned, is that with the advent of the instant rails and the overlay services on the instant rails, even though it's very early days now, what we've seen with those is the only transaction types on any of the payment systems that have been coming down are the cheque systems. So ACH, same day ACH, continue to grow at very healthy levels of card payments of course, but we are seeing a decrease in cheques. So I think we think that that's successful.

Kristina Logue:
Great. Jane?

Jane-Renee Retimana:
Well payments New Zealand's quite young compared to some other payment associations. So we were formed in 2010 when I came on just before 2015 was the first time that we had an attempt across governmental industry in setting a payment modernization strategy. And so we looked out, we looked at what the enabling capabilities that we needed as a payment system and then 2017 we explored a few different areas like proxy identifiers, API standardization, real-time, ISO, the whole shebang, looking at the UK again. But our pivotal moment really came in 2018 because we made a choice to go ahead with two things, which is quite different to everyone else. We made service availability as our top ranking priority.

And so as I said, we run clearing and settlement systems, our retail payment system, we are also a distributed batch settlement network, but what we did with that system, which does all our push payments, electronic credits we opened, we worked on a project to make all the payments that run through that system irrevocable, so we check for funds availability before the payment leaves the bank. And then what we also did is we opened that up to 365 days a year being open and because we wanted to make sure that we covered the whole kind of commerce in New Zealand.

And so now that system, that took a while obviously to work on that and to implement it. But two years ago that went live. So any account to account payments in New Zealand you can send, we have full clearing and settlement right throughout the day, 16, 17 hours a day, 365 days a year. So that was a big decision. We decided not to do real-time because the volumes might be slow uptake. We went for service availability and we went for API standardization and API enablement for payments and that was to create a dynamic partnering network and obviously to reduce the fragmentation. And that has also taken us a little while, but we have our API center, we've got two account information and payments initiation APIs at the moment, the four biggest banks are on their second round of implementation on our version 2.3, which brings in variable recurring payments at the end of this month and new features for account information in November. So at the moment, the four big banks, the fifth biggest bank in New Zealand joins next year, between the five of them, that covers about 94 per cent of our market in New Zealand.

Kristina Logue:
Great. So we've got two real-time systems, no real-time system.

Jane-Renee Retimana:
Not yet.

Kristina Logue:
Both of you have looked to the UK for guidance, and Kate.

Kate Frankish:
So faster payments was launched in 2008, a long time ago, but I think the most pivotal thing I wanted to talk about of change in the UK was back in 2017 when our payment regulator looked at the four different schemes that were live in the UK who were owned by the banks and they basically said we want to increase access to new participants in the market, to fintechs, to others, and actually having the banks owning the payment schemes isn't necessarily going to foster that relationship. So the decision was made to make Pay.UK pull all the schemes together and make it an independent company.

And in theory that's a great idea and you'd think that that would be a good way forward. One of the challenges of doing that and the learning very much so was being independent is one thing, but you're funded by the per click costs that your participants pay you who are the banks and fintechs who use your services, and taking away their skin in the game from a governance perspective isn't always going to really work for everybody. We've had a lot of pushback in the last few years about our participants having more control from a governance perspective. So I think that balance needs to be right.

Independence is great on one hand, but you're also providing a service to a set of customers as I look at it, and you've got to get that balance right. It has moved, the dial has moved in the UK and things are moving faster than they were over the last few years, and then that widening direct and indirect participation.

So faster payments until 2017 had 10 direct participants. When I left, to the end of last year, we had 47 direct participants and over 500 indirect participants, so not as large as Nacha today. And I was thinking, oh my god, that's very large.

But it does bring its challenges. So when we looked at the disparity of fraud levels between some participants versus others, a really big shift and there wasn't really a standard control from a fraud perspective. And that's a learning which Payments Canada is brilliantly bringing into play. When you bring RTR live in 2026, fraud controls at the center are there.

So I think looking globally, looking at what's been problematic is really important. And the last learning I was going to bring out from this was the other part is opening up for integrators and technology providers to provide services to the market is also great, it helps people get onto the payment system quickly. But one thing I would make sure that Payments Canada thinks about with the RTR is that it can lead to consolidation risk. If you have one provider providing over 50 per cent of the integration layer for payments with RTR payments in Canada and they go down, what does it do to everything else? So you're going to have to have some oversight on the technology and companies and aggregators. So I would suggest you think about a commercial relationship with them as well.

Kristina Logue:
Great advice, really nice little snapshot of each of the different jurisdictions here. But what we're starting to see is more, an increase in regional payment integration in areas like Europe and Southeast Asia. I would love to hear what opportunities or challenges deeper cross-border collaboration might bring for each of your jurisdictions and where do you see the most potential for alignment? So Kate, I'll start with.

Kate Frankish:
We've been approached, as you would imagine, in the UK by a number of the different schemes that are being set up. So you've got IXB, which is a scheme working with the European Banking Association, Swift and The Clearing House in America, because if you look at the actual volumes of cross-border payments, America has nearly 50 per cent of all cross-border payments that go through Swift today. Euro is about 22 per cent and then the UK is third about six and a half percent of payments. So you can imagine various different linkages.

Scalers are thinking the UK is an important corridor, how can we work with them? The other one is Nexus, which is really interesting, it was a project and now it's moved into an actual, there's been an RFP and one of the countries involved in the Nexus project will eventually run the scheme as such. And that's covering India, Malaysia, the Philippines, Thailand and Singapore. They've successfully linked those payment schemes and they're working together. So there's a lot going on in the market. There's a lot of demands.

The one question I've always had and when I was responsible for what do we do next, what's on our backlog in the UK, was where does it come, how important is it versus everything else that you are doing. And again, in Canada, if you look at your volumes of cross-border, whilst it's an important part of growing productivity and having growth in that space, is it the most important thing on your backlog? And I would tend to suggest no. So therefore being really clear on yes, it's something we're keeping an eye on and this is where it goes in the priority order with your participants and with your regulators is an important thing to take forward.

Jane Larimer:
That's a great point. I mean that's the calculus I think that's being made in the US too. One of the things we've, on the ACH system, we've had gateways, cross-border transactions for almost 30 years now, gateways into Canada, Mexico and Europe, Panama. But one of the things we think with cross-border and interoperability is being on the same version of ISO 20022, everybody thinks about the promise of ISO 20022, but if you're on a slightly different version, that really interrupts the interoperability, right? So it's the work to try to coordinate that so you can have technical interoperability and then for us it's always the legal framework, the rule set, allowing it.

Kristina Logue:
Technology might be the easier part, right?

Jane-Renee Retimana: 
I think it's all hard really, but I have to agree with Kate. It seems to drop, we say cross-border is very important, but on our payments agenda it tends to drop to the bottom. But if we were actually thinking about, from a New Zealand perspective, we are an exporting nation, we have to export food to the world. I did look up this morning, Canada's our 15th largest trading partner, so maybe we could do business together.

But yeah, I think you don't want your exporters or your importers to be paying more than anyone else around the globe, and trade is quite the hot topic up in this part of the world at the moment. But it is for us, we talk about around our dinner table, our primary exporters absolutely are out in the world selling our wares. So we do need those global payment systems to be working for them and to kick those costs down.

The other thing is, I'll just put a little bit of a pitch into trading corridors and channels. And I know with some of your Indigenous people here and in New Zealand and even into the States, that what we are seeing out of New Zealand is those trade corridors outside of maybe more formalized government, CP, TPS, I dunno, whatever the acronym is, that's the one we've got with you. But yeah, outside of those free trade arrangements, there are trade corridors going on and I think we just have to be cognizant of our markets, where they're playing, who their partners are and what we can be doing as an industry to support that.

Kristina Logue:
So if trade is a hot topic at the dinner table, I would suspect that fraud is as well. It's a topic we've heard mentioned a few times today, and I'm sure if you're enjoying any of the breakout sessions, you can probably follow an entire track on fraud. I'm curious to know how each of your jurisdictions are navigating the balance between innovation and risk management, particularly as new technologies and non-traditional players are entering the markets. Are there any particular regulatory frameworks or approaches that are taking shape in your jurisdiction? So we can start at the end, Jane.

Jane-Renee Retimana: 
I think fraud is probably globally a good market for the fraudsters at least. And we were down with Jane in the US last week at her conference and we had a panel on fraud and it occurred to me and the panelists afterwards that this is a space we could be doing a lot more in the cross-border sense. The fraudsters are pretty good around the globe, but we each are trying to learn from each other but each doing our own things.

So in New Zealand, we've just, our banking associations just updated a voluntary code trying to get in front of what the UK is doing with their reimbursement scheme. We've also used, and this is where we can learn from each other, we actually took the Fed in the US, well done to them, but we took their fraud classifier for reporting fraud. Look it up, it's really easy. It helps you tell a story and to understand the impact of fraud in your market. So last year all of our banks put in that reporting framework and so now a year on, we have a year's worth of data and we can actually see where solutions are needed.

And I can tell you fishable credentials is something we've got to get in front of. That's an area that people are being exposed to and scanned. And we've also got confirmation of payee, which our bankers association put in. So I think it's definitely an area of collaboration. I think it's not an area where your product needs to compete, it's an area where you all have to get on board. And also our next modernization, we've landed in a not dissimilar place it seems to Canada with looking at centralized fraud reporting and monitoring real-time as probably one of the first fundamentals we'll look at in our digital next gen system.

Jane Larimer:
So what we always talk about is the balance between risk and innovation. And we have a risk framework that we put together in 2022 for the era of credit push or authorized push payment fraud, very different than managing the risks of debit payments. And we've since then been putting rules into place, getting everybody in the industry to come on board because what we realized is it isn't any one participant who can take care of all of it, it's all the participants in the payment chain. And for us, one of the big C changes was having the receiving bank actually have responsibility, not just the sending bank because traditionally the sending bank is standing in front of every payment warranting the payment. And in this case we have some responsibilities on the receiving bank because with credit frauds, they're the ones actually in a better position sometimes to see the payments coming in.

So that was a big change for us. I think a place where we need to be, and I think everybody would agree in spirit that data sharing is crucial and that's still an area where because of data privacy and I think folks not really coming to a conclusion on the safe harbors that we have in the US for data sharing, that's somewhere where we really have a need that we still need to solve for. It's how do we go beyond saying it's a great idea and we really need it, but actually get to the place where we are sharing data because it is a collaborative effort and it does take all of us working together to try to move the needle on that, but we're not quite there.

Kristina Logue:
I wish we had more time on the panel. New Zealand and the UK have done great strides in the data sharing world, but sticking on this fraud theme, Kate.

Kate Frankish:
If you'd asked me 15 years ago, and I've always been in product development and innovation type roles, if you'd asked me about risk, I'd say it was a bit of a pain in the ass to be perfectly honest. But I've learned through scars, through payment incidents, through issues that actually now I'm a real fan of safe innovation. And what does that mean? It means you've got to think there's a good tension between risk and innovation. You've got to think through the unintended consequences.

And the UK is a great example of unintended consequences where we did have a voluntary scheme for refunding victims of fraud or APP fraud in particular — that didn't work because nobody implemented it in the same way. Some banks were giving all money back, other banks were hardly refunding any customers. So actually that's why the regulation and legislation that came into the UK last year on October 7th is burnt into my brain, because I had to deliver the actual systems and rules, et cetera to go around. That came into play and now it's mandatory and pretty much no bank or financial institution will be able to prove that their customer, the victim of fraud, has done something that's grossly negligent. It's a very difficult thing to prove.

So everybody, sending, the receiving, like in America, pays 50 per cent, 50 and 50 back to the consumer up to a maximum of 85,000 pounds. Now what does that do? It's great on one hand because all victims of fraud are treated in the same way. But on the other hand it costs, well, it adds costs. So is it going to stifle innovation, potentially in the UK? It might do, it might not do. We've still got to wait and see, but I haven't seen globally, anybody who's got it quite right because regulation's always trying to catch up with innovation.

Jane-Renee Retimana: 
I'll just jump in there as well, but I think prevention, isn't it? It's good to remediate after the fact, but prevention has got to be the case. It creates so much harm for people with, we've had, and actually I saw it on TV here about teenagers and sextortion and people losing their life savings because of an investment scam. So I think the harm, there is a call to action around reducing the harm at the front end and really getting in front of prevention.

I think things like digital identity and using, we've talked about it for so long, I think even we've had some Canadians down in New Zealand over the last 10 years talking about digital identity, but we really have to solve for it and it can't be one of those things that waits and waits. So that's also something we are doing in our making payments safer space is just you kind of as an industry sometimes wait for someone else to come up with the answer, but we definitely cannot wait.

So we are looking at the moment at payments use cases or in those open banking channels where verifiable credentials or that we could do something with that and there's the technologies there, but how do you create the scheme and the framework? I heard a lot about collaboration this morning, but to collaborate you do need scaffolding and you need people to come together and you need a scheme to make it work and you need a business model and all of those things. Industry driven tends to, I think tends to drive good outcomes.

Jane Larimer: 
Absolutely, totally agree. But I will say we were watching liability shift, with shock and awe from the States.

Kristina Logue:
And I was going to pull on the collaboration theme as well, Jane, I think this is the perfect example, we heard it referenced this morning,and a number of speeches as well, around the idea that there are some things that you can do on your own and there are some things that you will get so much more benefit and offer so much more value to the ecosystem. And I feel like fraud is probably one of those really great use cases where collaboration really comes to the forefront.

So this is a quick panel. We only have five minutes left, but we do have another question. We did just spend a fair bit of time doing a bit of a look back. We got to more present day where we are, and I would like you ladies to turn your heads to the future now and if you can think maybe five years ahead, things change rapidly. What do you think is going to be the most significant change in how payments work in your countries if you think to the future?

Kate Frankish:
Whilst the UK was the first country globally to launch faster payments, it's kind of been overtaken an awful lot. And whilst we've grappled with how to modernize the platform, there's now a plan in place to do modular modernization rather than big bank change which the UK just has to get on with and deliver. And why that's important, I think it links in with open banking payments, as Jane mentioned, we're seeing significant growth in the UK, I think last year, 6.5 per cent of all faster payment volumes was via open banking payments. And there's some really great use cases that are coming out that will really change the way consumers pay in the UK. Consumers love cards in the UK, Visa and MasterCard in particular backed cards. So the movement onto open banking payments is really supported in the UK.

Jane Larimer: 
I think that would be, for us, in the next five years, is open banking and pay by bank. So adding that kind of risk account validation layer that open banking provides both for the ACH rails and for the instant payment rails, both. So I think that we'll see that fully fleshed out right now. There's the enabling, I think regulation right now is in question, but I think the industry is moving, so we're moving ahead of that anyway.

Jane-Renee Retimana: 
I think we'll see a lot more automation or I heard someone at your conference actually say automagically and I thought, oh that's right, it's all magic for the consumer, at least, not in the back-end. But yeah, I think we'll see a lot more. I think we used to call it straight through processing, but now we call it automation. But I think there'll be a lot more digital automation and hopefully for small and SMEs and corporates actually, because the quicker that those businesses can get through their processes, the quicker they can build productivity and grow, et cetera. So if we can take away some of the administrative pain points for them, some of that double handling reconciliation, I think that will, that's how you take waste out of the system. I dunno if they'll get there in five years.

Kristina Logue: 
I think as a CFO who runs a back office, I'd appreciate the straight-through processing and efficiencies a ton. Before we wrap up, I wanted to try something a little bit different and we're going to do a very quick rapid fire round. So I'm going to present our panelists with two options, and I am going to ask for them to tell us which of the two is preferred in their jurisdiction. So we'll be able to highlight some of the differences between the countries we have up here. So we're just going to go down the line to get a chance to answer. So the first option is cheques or QR codes?

Kate Frankish:
Cheques.

Kristina Logue:
Cheques, okay.

Jane Larimer: 
Cheques are preferred, but we’d prefer QR codes.

Jane-Renee Retimana:
And I'm going to say QR codes, we don't have checks anymore in New Zealand.

Kristina Logue:
Okay, so cash or contactless payments?

Kate Frankish:
Contactless payments, definitely.

Jane Larimer:
It's probably both, but contactless payments is where we should be going.

Jane-Renee Retimana: 
I think both.

Kristina Logue:
And the last one will be mobile wallets or biometric payment authentication?

Kate Frankish:
Mobile wallets, in the UK.

Jane Larimer: 
Mobile wallets.

Jane-Renee Retimana:
Both.

Kristina Logue:
Okay. So a lot of similarities up here. Thank you for indulging me in that last little round. It does highlight a few differences, but a lot of similarities and I think as Canadians we also can relate to a lot of what was shared up here today. So as we conclude this discussion, I did want to take a moment to thank Kate and Jane and Jane for sharing their insights on how payment systems are evolving across different regions yet converging around shared global challenges. What stands out really clearly is that our national journeys may follow very different paths, but we're all working towards similar destinations and that's payment systems that are faster, more inclusive, more secure, and more interconnected. So I'd like to thank you all and I would appreciate everyone show some appreciation for our panelists.

Elizabeth (Liz) Dempsey:
What a great panel. If you'd like to view more content from The 2025 Payments Canada SUMMIT, please visit our website at, thesummit.ca, where you can now watch all of our on demand offerings. Thanks for joining us once again on this episode of The PayPod.