News Brief

How Mastercard is taking the uncertainty out of big monthly payments by offering payment choice

March 23, 2022

Mastercard is launching a new suite of Smart Payment Decisioning Tools to reduce risk in ACH payments and optimize cost and speed through open banking

It’s one thing to find out a small monthly payment didn’t go through. It’s quite another when that payment is your rent. When there are hiccups with big monthly payments, everyone feels the pinch. They can find themselves, at best, dealing with the friction between parties and scrambling to find different ways for the payment to come through and, at worst, paying large penalty fees.

Now merchants can use advanced data analytics and machine learning to make the payment experience safer and smarter for everyone. Mastercard is launching two new Smart Payment Decisioning Tools, Payment Success Indicator and Payment Routing Optimizer, part of Finicity’s open banking suite of services that enables payments and account creation seamlessly and securely.

“By fundamentally improving the payment experience and solving real-world challenges, we are delivering new technologies to offer more ways to pay with greater speed, convenience and confidence,” says Chiro Aikat, executive vice president, Product & Engineering, North America at Mastercard.

Bilt Rewards Alliance, a collection of more than 2 million rental homes across the country that lets renters earn points by paying rent, will be one of the first fintech partners to launch Payment Success Indicator.

“Our mission is to help renters get the most value out of one of their biggest expenses, and returned payments create significant expense and friction for both residents and landlords,” says Ankur Jain, founder and CEO of Bilt Rewards. “Payment Success Indicator should significantly reduce the potential for returned payments, delivering a digital payment experience that works harder and smarter for everyone.”

Eliminating friction in the ecosystem

Using real-time bank account information permissioned by the consumer, Payment Success Indicator lets the payment originator — a merchant, a bank, a digital wallet, or payment service providers — assess a consumer’s balance and historical behavioral risk patterns for each transaction.

Payment Routing Optimizer interprets that score and recommends the optimal day and payment rail (such as Same Day ACH or Next Day ACH) taking into account cost, speed and risk. So, for example, if Payment Success Indicator shows that the balance for a transaction is available today but may not be in the next few days, Payment Routing Optimizer will recommend using Same Day ACH.

This product aims to take the friction out of choosing between digital payments with future versions of the Payment Routing Optimizer potentially including a debit card option.

These new solutions are enabled by open banking, which allows consumers to affirmatively grant secure access to their bank account data for more seamless and innovative financial service experiences. Mastercard’s recent “Rise of Open Banking” study found that 74% of American consumers have or would connect their bank accounts to automate financial tasks, and that nine out of 10 GenZ and millennial consumers are already connecting their bank accounts to apps.

When payment originators use Payment Success Indicator and Payment Routing Optimizer, consumers provide informed authorization to allow their bank account data to be shared with the payment originator to enable transactions.

General availability of Payment Success Indicator and Payment Routing Optimizer for the U.S. is expected later in 2022.

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