Banks Replace Separate Payment Systems With One Shared Hub

A business customer asked its bank for a direct connection to instant payments and was told to wait 18 months. The bank had to rebuild its systems first. Robert Mancini, a partner at SRA Consulting, shared the story on a PYMNTS On Air discussion about banks moving from separate payment systems to one shared hub.

What changed

Many banks run each type of payment, such as wires, ACH and instant payments, on its own separate application. Those types are often called rails. A payment hub puts common work like routing, controls and daily operations in one place. Mancini said the goal is to say yes to a customer's next request fast, without a two-year project.

Why separate systems cost more

Mancini described banks running the FedNow Service through one vendor, ACH through another and wires through a third. In his words, that means three contracts, three supporting teams and three upgrade cycles.

• Staff must learn different screens for fixing payments and viewing pending ones.
• Fraud and sanctions checks can end up with different vendors for each system.
• Call centers and operations teams repeat the same work.

Radha Suvarna of Finastra said that at a former employer, three payment systems had collected three different fraud detection vendors.

How banks are starting

A bank does not have to replace everything at once. Mancini described a cooperative bank that started with wires, added instant payments, then moved ACH, all on the same platform. Suvarna said the first design step is to separate payments from the bank's core system, then add common coordination across rails.

The panelists said controls must be tested and payments must be visible before customer activity moves over. Mancini suggested three questions for vendors. Can the bank call a similar customer? Who answers during a failure? Who pays for the next rail and future AI features?

What it means for business customers

Rob Noon of Atlantic Union Bank said customers like a simple screen but rely on the bank to move their money. A company running payroll needs staff paid on time, however many systems sit behind the screen. Mancini said banks can no longer replace their platforms every two to three years. They need to buy once and buy for the next decade.

What is not clear yet

Mancini called the hub table stakes, meaning a basic requirement. Suvarna said banks do not yet use all of its features. Advanced routing, which picks a payment path by cost and other factors, is one area where use lags. The material gives no figures on how many banks have moved to hubs. The source text is also cut off before its section on ISO 20022, a payment data standard.