DT Payments News > Tereon moves money in real-time

The Faster Pay­ments Task Force issued a final report in July with an eye-popping goal: National, real-time pay­ments by 2020. Kalypton and TEREON top the list!


In July, the Fed­eral Reserve-sponsored Faster Pay­ments Task Force capped off two years of hard work with a final report that set an ambi­tious dead­line: real-time, or near-real-time, pay­ments in the United States by 2020.

To help make that hap­pen, the Task Force presen­ted a com­pil­a­tion of final evaluations—managed by its out­side con­sultancy, McKin­sey & Co.—of some 16 sur­viv­ing faster-payments pro­pos­als. The exam­iners thor­oughly reviewed each pro­posal, detail­ing how they would work and zero­ing in on strengths and weak­nesses. The eval­u­ations included dia­log with each pro­poser con­duc­ted between ini­tial and final assess­ments.

The assess­ments included some 36 so-called effect­ive­ness cri­teria against which the pro­pos­als were meas­ured, ran­ging from “Very Effect­ive” to “Not Effect­ive.” The cri­teria are grouped under six major head­ings: Safety and Secur­ity, Speed, Gov­ernance, Ubi­quity, Effi­ciency, and Legal.

Below, we present sum­mar­ies of these 16 final eval­u­ations. How faster pay­ments will take shape over the next three years is not yet known, but it seems clear some com­bin­a­tion of these 16 pro­pos­als will play a major role—and will have to do so quickly.

To help read­ers assess the qual­ity of the pro­pos­als, Digital Trans­ac­tions quan­ti­fied the assess­ments for each one, and then tal­lied the res­ults to cre­ate the rank­ings in a chart (see print or Digital Edi­tion). To do this, we first assigned a value of one to each check­mark that the McKin­sey & Co. assessors—the Qual­i­fied Inde­pend­ent Assess­ment Team, or QIAT—gave every pro­posal based on 36 effect­ive­ness cri­teria. Each cri­terion could get just one of four assess­ments: “very effect­ive,” “effect­ive,” “some­what effect­ive,” and “not effect­ive.”

Then, we con­ver­ted the total num­ber of check­marks for a pro­poser into a per­cent­age of the total pos­sible score (36 for each of the four effect­ive­ness rat­ings), and finally ranked them by the sum of their “very effect­ive” and “effect­ive” per­cent­ages. Thus, the two highest-ranked pro­posers, The Clear­ing House/FIS, and WingCash, both achieved 100% scores based on their identical scores of 83.3% very effect­ive and 16.7% effect­ive.

Read­ers should keep in mind that these scores were con­ceived and cal­cu­lated by Digital Trans­ac­tions, not McKin­sey or the Faster Pay­ments Task Force. Assess­ing pro­pos­als to improve U.S. pay­ments is an often qual­it­at­ive and sub­ject­ive task.

For example, as at least one Task Force mem­ber noted, each cri­terion is given equal weight. That means, for example, that an “effect­ive” for inclus­ive gov­ernance in the Gov­ernance cat­egory counts the same as an “effect­ive” for risk man­age­ment in the Safety and Secur­ity cat­egory. Mak­ing an apples-to-apples com­par­ison of two such dif­fer­ing cat­egor­ies is dif­fi­cult, if not impossible.

Kalypton Group Ltd.
United King­dom

The eval­u­at­ors note that full details of Kalypton’s solu­tion were not avail­able for con­sid­er­a­tion as the com­pany was under­tak­ing pat­ent applic­a­tions. In brief, the com­pany pro­poses to use its Tereon engine to provide a so-called cent­ral core that would integ­rate with the bank­ing sys­tem. Tereon would move money in real time using Inter­net ses­sions or mobile-data net­works, and is avail­able to both bank and non-bank pro­viders. Kalypton is in the pro­cess of deploy­ing the first Tereon install­a­tion in Cent­ral Amer­ica, the eval­u­ation indic­ates. Not­able strengths include: Abil­ity to sup­port mul­tiple cur­ren­cies as well as banked and unbanked cus­tom­ers; and secur­ity, with device and user authen­tic­a­tion. Areas that need improve­ment or cla­ri­fic­a­tion include: defin­i­tion of trans­ac­tion inform­a­tion shared between Tereon serv­ers and banks; details about the flow of inform­a­tion within and between pro­viders; details about the needed infra­struc­ture or the accounts pro­viders must cre­ate. Kalypton’s pro­posal scores quite high, fin­ish­ing second for effect­ive­ness at 97.2%.

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