Companies with global operations have touted several benefits of blockchain technology for their payments: Delays and costs can be trimmed, while the tech allows organizations greater flexibility to program guidelines for how funds flow.

Quicker money movement enabled by technology also gives global corporations new options for how they pay vendors and employees worldwide, along with improved optimization of many financial functions.

Tom Halpin, who leads North America, global payments solutions, for London-based HSBC, discussed the growth of real-time payments and cross-border funds innovation in an April 15 interview. He is based in New York City.

Earlier this month, HSBC expanded its tokenized deposit service to the U.S. market, enabling the cross-border movement of money 24/7 on a blockchain. The service is also available in Hong Kong, Singapore, Luxembourg and the United Kingdom, supporting major currencies including the euro, pound and U.S. dollar.

Last month, Swift, the international financial messaging service, said it had finished designing its blockchain-based shared ledger and had begun work on the first version to allow for tokenized transactions. 

Editor’s note: This interview has been edited for clarity and brevity. 

PAYMENTS DIVE: Where are you seeing most of this real-time blockchain push from cross-border clients? In the U.S., in Asia, elsewhere?

TOM HALPIN: Globally. If you think about how [corporate] treasury is evolving, they have multiple centers. Sometimes the bigger centers are offshore, so they want that ability to move money to different markets. Also, time zones don’t always align perfectly. So how do you expand the working day so they can optimize their liquidity? It’s customers of all types. Some wanting to move money into the U.S., some wanting to move the U.S. currency out to different markets based upon how they operate.

Is there any industry or region moving faster on blockchain tokens than others?

There are a lot of people talking about it. It’s very hard to gauge who's actually moving faster with live solutions, with flow going through it. You’ve got some of the global banks that I’ve seen in this, you’ve got some of the fintechs who have been talking about this space. The question that I always ask is: How much real flow and connectivity is there, and how are they truly solving for the last mile equation? 

How do you think about the adoption of real-time payments in the U.S. and what are some of the things possibly holding back growth?

One thing many people don't necessarily realize: the full adoption of real-time payments isn’t driven by the banks. It’s driven by the underlying corporates more so than anybody else. For instance, if I were a corporate customer making payments … with an ERP (enterprise resource planning) system, maybe a TMS (treasury management system) that is producing a file format, and it’s delivering it over an API in a real-time sense. And I know the format. I'm comfortable with it. I know how to work within that. Do I want to prioritize going to a new format? Because going to real-time for them also means a change in their back-office operations on some level. 

Before, they weren’t worried about receiving a payment on a Saturday and having to apply that to an outstanding balance to make sure a customer wasn’t going to be getting charged a late fee or a credit. So, they have internal workings to do. This isn’t just about the banking community adopting and leveraging it. It’s about the business case that needs to be made from a corporate lens perspective.

What’s the likely time frame, in your mind, that a large majority of U.S. payments become real time?

One of the biggest shifts will be, how much do regulators encourage the migration from check? Because that will create a stimulus shift from checks to real-time. Take a group that is very familiar with using a (peer-to-peer payments) Venmo solution. Years ago, that would have been either people handing cash to each other, or it would have been cutting checks for some of that stuff. You have to look at the world very differently between the consumer side of it versus the wholesale side of it. The wholesale side moves faster when they see that they’re giving up a competitive advantage. 

This is my personal opinion, but I believe that as corporates are looking at their technology infrastructure and their stack, I think that’s when you'll see shifts. Like, ‘Wait, this is a great time to think about real-time payments, and can we leverage it?’

What are some of the primary issues driving faster payments? Lower costs? A 24/7/365 settlement capability?

E-commerce activities are operating on a much wider business time clock, so that's changing it. There’s greater need to deliver payments with added velocity. There’s a cost component to it, as you said. People are thinking that this will be a more cost-efficient mechanism. On the other side of that, it's not just cost in terms of the fee for the service, but it’s also an efficiency play. Am I leveraging my working capital better? Can I move my working capital from Country A to Country B so that I could operate within that business day and really maximize the efficiency of my liquidity, as opposed to operating very independently? The one big difference that I see now versus years ago, I think everyone was trying to find a way to use the technology. I think they’ve now said there are real, live business problems and challenges that need to be solved and this technology can help us do that. 

How will digital tokens and stablecoins work together in the cross-border market, over time, in your view?

Over time, a key component of the success of a stablecoin, or even some of the tokenized deposit solutions, will be that ability to interchange between coins. Can you take a Bank A coin and have somebody convert it to a Bank B coin, and you can go in and out. So interoperability, ubiquity – very similar to some of the legacy payment rails. If there's two different wire schemes you could interoperate your messages if one is down and go to the other. If you’re doing an ACH, you could do that between formats. Right now, they’re going to be very single-track solutions that will be really tied to the underlying business case that the customer is looking to solve for. Over time, I think stablecoins will actually [be] a Swift initiative. Swift is going to sit in that middle and be the player who connects the world. The key is getting enough players to come on to that utility to allow the interoperability of the coin, which is the challenge that we have sometimes seen with real-time payments.