Three Must-Dos: Faster Payments, Stablecoins and Agentic Commerce
By Steve Cocheo, Senior Executive Editor at The Financial Brand
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Executive Summary
- U.S. faster payments programs continue to advance, especially the Federal Reserve’s FedNow program and The Clearing House Real-Time Payment Network.
- Meanwhile, the passage of the GENIUS Act this summer has introduced stablecoins into the payments arena. They will intersect with faster payments, but also represent a separate, parallel payments rail.
- Consumer experimenters are tinkering with agentic commerce wedded to payments, but the most exciting progress may come on the business side.
Reed Luhtanen frequently uses an analogy to describe the realities of the payments business.
Say you’re sending something by FedEx, says Luhtanen, executive director and CEO of the U.S. Faster Payments Council. “You don’t tell FedEx, ‘I want you to use a Peterbilt truck or a Mack truck.’ Users don’t care about those things. They care about matters like: How much is it going to cost me? When’s it going to get there? Do you have insurance if something goes wrong? ”
Users’ interests in payments are pretty much the same, according to Luhtanen.
“Very few people care whether the transaction goes over Rail X or Rail Y or Rail Z,” says Luhtanen, a payments veteran and top staffer at the council for nearing six years. Instead, he says, they have basic questions: “How much will it cost me to send this money? How long is it going to take to get there? What information is traveling along with it? Is there liability protection?”
The key point is that banks and credit unions should approach payments from the perspectives of consumer and business users, not as payments nerds. The mechanism — whether instant payments, stablecoins, or agentic commerce —is secondary.
Going forward, in fact, these methodologies may run as alternative parallel tracks or they may intersect. For example, stablecoins may someday dominate the “journey” of a specific payment, but the Federal Reserve’s FedNow or The Clearing House Real-Time Payments Network may act as an on-ramp or off-ramp to handle the shifts from fiat currency to stablecoin (or vice-versa).
Luhtanen says there just as easily could be use cases where stablecoins provide bridges between FedNow and RTP.
“It’s more likely that you’ll have financial institutions as well as other participants in the ecosystem, issuing stablecoins, and their transactions will be purely stablecoin transactions,” says Luhtanen. “And there’s no question that, at the same time, we’ll have trillions of dollars moving simply through RTP and FedNow.”
Especially for smaller payments providers, understanding the basics of stablecoins as quickly as possible will be critical.
“The thing to do is identify the aspects of the existing ecosystem and find where there are gaps that need to be filled. It’s unlikely you’ll want to compete directly with very large companies,” says Luhtanen. “But there’s almost always an opportunity to fill a gap that exists between the large platforms and various things that they weren’t purpose-built for.”
The GENIUS Act’s Impact on Faster Payments
Luhtanen considers passage of the GENIUS Act as a “permission slip” from Congress for participants in the payments business to take a serious interest in using stablecoins. (GENIUS stands for “Guiding and Establishing National Innovation for U.S. Stablecoins.”)
But there’s a balancing point that every player has to find. For some players, the cryptocurrency could eventually be a big deal. Luhtanen says institutions have to remember how quickly new technology gets adopted these days.
“We’ve seen it with AI, which went from almost nobody knowing anything about it to using it all the time, every day,” says Luhtanen.
The flood of announcements of new stablecoins and related developments is dizzying. But Luhtanen points out that the GENIUS Act isn’t even fully in effect yet. For example, the Treasury Department published an advance notice of proposed rulemaking for implementation, but extended the comment period to Nov. 4.
“Everything will not necessarily be cemented in place in the next year or two,” says Luhtanen, who is an attorney. Institutions with the resources to do so can “place a variety of bets” on different opportunities.
“You have the opportunity to get up to speed as much as you can, and then, once the regs hit, you can be in a position to know what you want to do,” says Luhtanen.
Implemented as written, the GENIUS Act provides some guardrails for stablecoin activities. But Luhtanen says banks and credit unions will have to learn to sort trustworthy issuers from others. They need to ask questions about who the issuers are, assess their risk profiles, and think of the end users —consumers and companies — that will be using the coins.
“I don’t mean that the issuer needs to be a very large established company, but they have to provide transparency into what they’re doing and how they do it, and what they’re backing up their stablecoin with,” says Luhtanen. One facet of the GENIUS Act provides for the auditing of factors such as the holdings backing up the coins, with access to that information made available publicly.
Read more:
Where On the Field Is the ‘Classical’ Faster Payment Business?
In spite of the ebullient mood over stablecoins, Luhtanen doesn’t believe they will overwrite the progress that’s been made in faster payments in FedNow, RTP and other avenues.
In fact, for laggards, “if they have an interest in playing in the instant payments space, they need to very quickly get up to speed and identify what the value proposition they can offer might be,” says Luhtanen.
He says an important thing to understand is that the instant payments business itself is in flux.
“It’s one of those situations where you’re consistently making progress and then moving the goalposts back on yourself, as an industry,” says Luhtanen.
FedNow or RTP, combined, accounted for about three quarters of a trillion dollars in volume in the second quarter, Luhtanen says, with third quarter numbers expected to show further growth in quarterly volume.
To put that total in perspective, the annualized run rate of $3 trillion a year would put it nearly at par with the volume of same-day ACH in 2024, says Luhtanen. “So, in terms of usage, it’s already very strong.”
However, many more institutions are set up in “receive” mode than “send” mode. “So, the send volume is predominantly coming from a relatively small number of senders,” says Luhtanen. He expects more institutions to enable sending funds on the two services in the near future, and that that will then produce a surge in overall volume. (The council recently put out an annual report on faster payments that’s worth a look.)
Beyond receiving and sending, says Luhtanen, “everybody seems to be gravitating toward ‘request for payment’.” This functionality, available on both networks, enables someone to send a message through the system asking another party to pay something outstanding, with the communication element built into the payment flow.
Usage could be as simple, says Luhtanen, as one sibling asking another to pay their share of a parental birthday present. But much more could come of it.
Read more: White-Label Crypto: Speed to Market, Risk to Reputation — and Maybe More
Will Faster Payments Intersect with Agentic Commerce?
Agentic AI for purchasing is taking off as a concept, and some users are already trying out bots for purchasing. It’s not unusual to see industry figures test-driving agentic purchasing and reporting on their experiences on LinkedIn.
Luhtanen says this method of purchasing hasn’t intersected with use of FedNow and RTP yet. There’s the slower growth of send transactions as one drag. Another is the need to address many aspects of customer experience once agentic and instant payments cross.
Initial efforts have raised many questions, such as the handling of exception items.
“Say the bot goes off and buys something that you didn’t want it to buy: Where are the recourse options? Can you return it? Can you get your money back?,” says Luhtanen.
“One of our council members raised a concern about a bot buying something that you do like, but you don’t recognize the charge on your account because you didn’t do it: How do we make sure that’s handled appropriately?”
Answers to questions like these are part of the learning process, he says, and in time the answers may guide how pay-by-bank solutions are implemented in an agentic context.
But what excites Luhtanen more is the business side of agentic commerce and instant payments. For many companies, especially smaller ones, faster business payments aren’t seen as being as important because after hours there’s no one there to deal with a payment that’s arrived.
As agentic purchasing bots become more common, company treasury “staff bots” will be handling the back end, he predicts.
“They don’t get tired, they don’t get hungry, they don’t sleep. They don’t have kids that they have to take to the dentist,” says Luhtanen.
Being on 24/7, he adds, “they’ll just be there to take in whatever information they have available about what you want to do with your business, and leverage whatever payment options are available to move money around, either to invest it or make a payment due on an invoice.”
Luhtanen says this could boost efficiency. “And it would only be truly unlocked by combining instant payments and those agentic bots.”
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