Microsoft has boosted its role in the digital payments migration through a series of ventures, using its cloud computing platform to support merchant upgrades and real-time processing.
It’s most recent collaboration involves Volante, a Jersey City, N.J.-based company that develops software to comply with messaging protocols that enable payment processors to support digital payments.
The collaboration creates ways to link fintechs, banks and other stakeholders to financial message automation, open banking and ISO 20022. Microsoft and Volante will focus on managing dramatic increases in wire volumes by migrating Fedwire payments to a Microsoft Azure cloud. Microsoft and Volante announced First American Trust as one of their initial users.
ISO 20022 and open banking are designed to support Swift, The Clearing House’s Real Time Payments service and the pending FedNow real-time payments network.
Fedwire fund transfers usually involve residential and commercial mortgage settlements, syndicated loans, treasury management, B2B payments and other transactions — generally larger payments that carry transaction fees of between $10 and $25.
“But that is only if the payments are processed in an efficient and timely manner,” said Vijay Oddiraju, CEO of Volante Technologies. “If they fail or are delayed, that can have major repercussions for both senders and receivers, and of course for the bank’s reputation and margins.”
E-commerce requires merchants and financial institutions to support these and other faster payment rails. Additionally, the coronavirus pandemic has led to a quick
The move to digital payments accelerated an existing trend, but also posed a challenge since the acceleration was so sudden it harmed visibility. PayPal, for example, has ramped up hiring in its analytics department in an attempt to understand how “societal norms” have changed, according to
“None of us has a crystal ball right now, but the cloud has an advantage in helping manage the flexibility needed for transaction processing,” said Tom Feher, an industry director at Microsoft. “In the payments industry there’s a transformation going on in which people are looking at how to manage all of these changes but do so in a ‘consumable’ manner and not having to do it all at once.”
Cloud computing has already demonstrated it can help business owners handle unexpected volume, as
Microsoft’s Volante partnership was preceded by a recent collaboration with
“The cloud enables us to see how banks are responding to changes in how they are interacting with clients,” Feher said, adding Microsoft sees Azure and APIs as a way to enable banks’ competition with fintechs. "Everyone's taking a different approach."
