Good morning.
Good morning.
Great attendance. Appreciate that. We all appreciate that. It's good to see everybody here. Thank you for joining. Hello to everybody on the webcast. For those of you who haven't met, I'm John Kraft, and I run our investor relations, as the voice of God said. We're very happy to be here today. Actually, we have a couple of board members that I'd like to introduce: our chairman, Ron Almeida, and Charlie Peters. If anybody wants to say hello.
Hello.
Hello.
We've got a full agenda for you today. The first part, the morning session, has generally been designed for financial analysts and investors. We'll go through a number of topics and have plenty of room for Q&A at the end. We'll have a break somewhere in the middle there, probably right after Debbie talks. The afternoon session is generally designed for our industry analysts. We're going to get into the details with our subject matter experts and talk about ACI's strategic initiatives. This section actually will not be webcast. Everybody is welcome to stay. We encourage the financial analysts to stay as well. We'll wrap up. 3:30 P.M., something like that, is what we're looking for. With that, I'd like to turn it over to our President and CEO, Tom Warsop. Tom?
All right. Thank you. Well, so I was going to walk up here. I'm from Kansas City. And so recently, there's been a lot of my favorite football team has had a lot of connection to a very famous pop star who had a song that was absolutely perfect for the entry music. It's called "Welcome to New York." I said I would like to it was the only Taylor Swift song I know. So I was going to use that as my walk-up music. And our partner said, "You can't do that." I said, "Why not?" He says, "It's going to cost you like $100,000." So then I said, "I know. I'll sing it." And Scott Behrens said, "You sing it, and I'm not coming." But anyway, welcome to New York and the ACI 2024 Analyst Day. It's been a while since we've been together.
I don't think we're the only company that had COVID interrupt our normal schedule of analyst and investor days. But it is great to have all of us together. So I thought I'd start with a quick introduction because I've met many of you, but certainly not all of you. And you probably heard a little bit about my background. But just to put everybody on the same page, my history with ACI goes back a long way, more than 20 years. I know we have some investors and analysts in the audience that go further back than I do. But I've been a customer of ACI twice in my career. And if I go all the way back, I started my career with a company called Electronic Data Systems Corporation. So EDS was started by Ross Perot. The company invented IT outsourcing.
I know Ron is going to argue with me about that later with IBM. But one of the things I did was I was responsible for business process outsourcing for financial services. And as a result, we used ACI software, many pieces of ACI software, to provide services to our customers. And what I learned while I was doing that was the software was really, really good. It worked incredibly well. I got a chance to be a CEO, which is what I wanted to do. Sorry, before that, actually, I joined Fiserv. I almost skipped that one. So I joined Fiserv. I was group president of Fiserv. And I was an ACI customer again because same thing. We provided services to financial institutions all over the world. And we used ACI software to do it in many places.
Not only was it really good, I realized I couldn't actually do what we did without ACI software. Then I got a chance to be a CEO. For about 10 years, I was CEO and/or executive chairman of several different private equity-owned portfolio companies, always somehow connected to the financial services industry, a lot of insurance, and similar stuff. During that time, 2015, I joined the board of ACI. I was really excited to join because I had a lot of experience in technology, in payments, in financial services. I thought, this will be a great opportunity for me to learn and to provide value, hopefully, in the boardroom. Then in 2022, when I was the non-executive chairman of the company, we decided we needed to make a change with our CEO.
And I stepped in as an interim and then ultimately the permanent, I guess you would call it, CEO back in June of last year. People ask me, were you glad that the board made that choice? Well, I wouldn't have put my name forward if I didn't want the job, of course. I'm ecstatic about it. There's a huge opportunity for ACI. There are things happening in the financial services market, in the payments market, that I believe only ACI can take advantage of. And it is a great place to be. I think hopefully, at the end of today, you'll have the same kind of excitement that I do. One of our great investors who's here in the room told me the other day after our earnings call that he really appreciated my calm confidence.
But he wasn't quite sure if New Yorkers would appreciate it as much as Midwesterners. So hopefully, I'll come across you'll get that excitement, Steve. But the theme today, new paths, new payments, new paradigms. I think it's perfect. It sets up what's happening at a foundational level. And the thing, if you remember only one thing about today, it should be that we are on a new trajectory for growth. We are expecting to grow 7%-9%, so upper single digits, like we've been saying. And you don't have to wait for that. It's happening this year. Scott will give you more details about that in a minute. So I know this might seem weird to have a question like this in front of a group that knows a lot about ACI. But this is the most common question I get.
It was the most common question I got as the chairman of the board as well. As weird as it might seem, it's not really about what do we do. It's about how do we do it? How do the things fit together? Let me really simplify this for you. Our software and services enable the movement of money from one place to another. That's actually all we do. We do it in a lot of different ways. There are a lot of different flavors of it. You're going to hear from Debbie Guerra about very specifically what the products and services that do that, how they do it. That's really what you need to know. We help move money from one place to another. We have a line that we use to describe the value proposition that we have.
We call it intelligent payments orchestration. So you're going to hear that again and again. I think that does a pretty good job of explaining it. But we not only enable our customers to move money, but we enable them to do it in an efficient, effective, fast manner. Global commerce relies on ACI. I love that line. And it's absolutely true. In a minute, I'm going to give you. You're all sitting there thinking, well, at some point, he's going to give us this slide with lots of big numbers on it. Everybody does that, right? And I'm going to do that. I'm not going to disappoint you. But the point of that isn't really the big numbers. It's to demonstrate how important we are to global commerce. But that's not enough. Sure, we process lots of transactions, move lots of money. Our software does. But that's not enough.
We have fantastic customers. Our customers stay with us for a very long time. They have very sticky relationships and products. We absolutely must continue to help our customers deal with the things that are happening in their business and help them be more successful. Again, I think you'll have a good feel for how we do that. But we have a really strong approach to doing it. I think you're going to continue to see acceleration. Here's the big number slide. I'm going to start in the upper left-hand corner. Our solutions handle more than 1 billion transactions, 1 billion payment transactions, every single day. Those billion-plus transactions move $trillions every day. Now, that is a big number. I said trillions with a T, just to be clear on that.
The amount of money that our solutions move in a day is larger than the gross domestic product of most countries. So that hopefully gives you a little bit of an idea of how important we are. We serve all 10 of the largest 10 banks in the world by asset size. We do business in 94 countries. If you think about real-time payments, we support 26 regional and national real-time payment schemes around the world. We're the leading player in that space. We have 400 member banks. We have 10 central infrastructures. So central infrastructures tend to be central banks or agents of central banks that facilitate those real-time payment schemes, 400 member banks that rely on us. And 30% of all real-time payments in the world are protected by our fraud detection and prevention solutions. In our merchant space, 80,000 merchants.
We have 6 of the 10 largest merchants in the world. We are able to connect to 800 payment endpoints with a single API, so way more than any of our competitors. In our bill pay ACI Speedpay, we handle $200 billion of bill pay every year. 3,000 billers rely on us. I think that's probably pretty clear. Those are big numbers. We're very important to global commerce. I should mention also that in our Speedpay business, over the last 18 months, we've signed the largest deals ever in the history of our bill pay business. It's a great set of businesses, really important to global commerce. You're probably sitting there wondering, what's changed since the last time we were together? It did look a little bit different when we were together. I think it was 2021.
But I'll highlight this may not do it for you. But let me tell you what I'm trying to depict here. At any given time, like any organization, we have to take into account what's happening in our industry, what's happening in the global economy. We have to make decisions about prioritizing investments. You can't do everything at once because if you try to do that, you're going to do kind of a crappy job on everything. But if you go back to 2020, 2021, so the analyst day in 2021, we were focused on real-time payments. We've been very successful with real-time payments. We continue to reap the benefits of the investments we've made over that period of time. A month or so ago, we signed the Banco de la República de Colombia, the Central Bank of Colombia. We will be providing central infrastructure services.
We'll also be connecting all the banks in Colombia to that infrastructure. There are a lot more wins to come. But we've been very successful in real-time payments. We were also focused on merchants. We told you back then that we were going to focus on sales, on adding value-add services to our merchant solutions. And we've done that. We exited 2023 with the highest growth rate of the year in merchant. And we expect that to accelerate into 2024. And then in our Speedpay business, we told you back then that we were going to focus on sales and account management. And that, again, has been very successful. We had a little bit of a challenge, as everybody's aware. With our interchange program, we fixed that. And that business is performing very well. We've signed some of the biggest deals in the history of the business.
Ron Shultz will talk about that in a little bit. We've done what we said we were going to do. That's really the point, if you go back to 2021. We're the leaders in real-time. We have seen great improvement and great results in ACI Speedpay business. We've seen a turn in the merchant business. We're seeing that acceleration right now. What's new? We are turning our focus to a very significant opportunity in our banks business. That's the business that provides the largest amount of revenue and profitability for ACI. It's the place we have the right to win. Business in that segment has grown faster than the others in the last few years. We expect that to continue to provide great growth for us. The opportunity that I'm talking about is rooted in market discontinuity.
There's a lot of things happening, as we all know. A lot of change is happening every day. Real-time payments, even though volumes are relatively small in many parts of the world, real-time payments is driving an intense examination of payments infrastructures, the technology, the infrastructure that large financial institutions, midsize financial institutions, all financial institutions have around the world. Leaders at those banks are saying, can I handle this massive amount of growth in transactions that I know is coming? I don't know exactly when. But I know it's coming. They're thinking about, how do I do this? How am I going to make sure I'm ready? How do I modernize? It's a good thing that ACI is here because we have the market position that you all know about. We have unquestioned scalability, reliability, dependability. We have the right to participate in these opportunities.
We're virtually always included on the short list of partners or potential partners to help these institutions modernize. We're usually near the top. They know us. We have what it takes. Customers and prospects are actually coming to us to talk about, how do we do that? Those drivers I just talked about, they lead to more opportunity for ACI. We probably wouldn't be here talking about it if I didn't believe that. For some context, when we think about the markets we serve, we look at total addressable market. Everybody looks at total addressable market. The challenge for me on that is those numbers are so huge, it's almost impossible to get your arms around it. What we do is we try to look at something a little bit more tangible. We call it a serviceable revenue opportunity.
So it's a subset of the total addressable market. What it means is that these are opportunities we think are in our wheelhouse, so to speak, of customers, that we have already what it takes to win those deals, and that we can compete for right now. We have the right to win those deals. So as I said, subset of the total addressable market. But that's much more manageable for us. So I'm going to give you some examples. We're expanding this kind of sweet spot of our serviceable revenue opportunity. Right now, that's in the bank business. That's about $2 billion is what that represents. We have about $700 million-$800 million of revenue now. So still some significant opportunity. But that's how big it is now. We're expanding that in two ways. One, we see opportunities with the mid-tier financial institutions.
ACI has historically focused on the mega financial institutions. That is banks with more than $250 billion in assets. We're very strong there. We're going to continue to be very strong there. There's an equally interesting opportunity with the mid-tier. That's banks with $50 million-$250 billion of assets. Those institutions haven't always had the robust infrastructure required to take advantage of what ACI can do. But they are looking for the same benefits that their larger counterparts already enjoy. In addition to the mid-tier, we are building a cloud-native, multi-tenant payments hub. That allows existing customers to migrate to new products in a lower-risk, proven way. Because it will run in multiple operating environments, it'll run pretty much in any environment that our customers want. Mid-tier financial institutions can take advantage of this right away. Debbie's going to talk about that in detail.
At a high level, we're going to connect our proven products to our payments hub. We're going to connect new products that, as we build them, to that same payments hub. That is what will allow that much lower risk, more straightforward migration. As I said, the hub can be run wherever the customer wants: public cloud, private cloud, hybrid, on-prem, whatever they want to do. I believe ACI is the only partner that can do that. We have the existing products and services. We have the expertise. Our competitors just don't have that. We can facilitate that lower-risk move. We intend to take full advantage of that opportunity. With those changes, that increases our serviceable revenue opportunity by more than 100%. You get to about $4.5 billion of opportunity by 2028, which obviously is significantly more than we have today.
And we intend to take a lot of share out of that. Abe Kuruvilla, our Chief Technology Officer, is going to talk about how we're doing that in a little while from a technical perspective. Debbie Guerra will talk about the product strategy. So how are we going to do this? There are some fundamental underpinnings, cultural and organizational, that are going to allow us to achieve what we need to achieve. There are three tenets that run through everything we do at ACI: focus, speed, partners. And that's my cute thing, huh? So focus. I'm going to use a quote from Steve Jobs because I think he said it really, really well. People think focus means saying yes to the thing you have to focus on. That's not what it means at all. It means saying no to the hundreds of other good ideas out there.
That is the challenge. Our payments hub, the expansion to the mid-tier, that is what we're focused on in 2024. You're going to hear about it again and again. Speed, we have to move faster than ACI has ever moved before. I call it moving at lightning speed because these opportunities we're talking about, they're relatively limited. We have to take advantage of them now. We're using tools like generative AI, machine learning, large language models to drive significant productivity improvements. We're already seeing those improvements. IRL, as my kids told me to say that in real life. We're seeing those now. Abe's going to give you some examples, some specifics on that. My point is we're going to move at lightning speed. I say it every day to ACI. They need to be ready. Finally, partners.
We need to leverage the expertise not only of ACI but of people that we trust to help us deliver on these great opportunities. We use partners intelligently to attack revenue opportunities where we don't have feet on the street. So an example of that is our Interswitch relationship that we announced last year. In Sub-Saharan Africa, Interswitch is using our software, providing services. We don't have the ability to harvest those opportunities. They do. We also use partners to access specialized skills that we either don't have or don't have enough of inside of ACI. So an example of that is Peer Islands for AI-driven development. Again, Abe will mention a little bit about that. And then finally, we use partners to augment our skills in periods of high demand. Cognizant and iEnergizer are examples of that.
We have not always at ACI exhibited enough of these three things: focus, speed, partners. We have them. But we don't always have them enough. Going fast with the level of quality we require, that's really difficult. Focusing, saying no, is really hard. And partners are extremely rewarding. Partnerships are extremely rewarding. But they are difficult to manage. So those three tenets for us, though, they're non-negotiable. That's absolute table stakes for us. And I might be showing my age on this. But the way we're looking at it is we're going to crank this up to 11. Does anybody know that? Yesterday, I asked my team. And everybody was like, what are you talking about? This is Spinal Tap if you're unaware. No discussion of technology would be complete without talking about AI. Gene Fox earlier said to me, "everybody, that's all that anybody's talking about.
Well, I didn't want to disappoint you, Gene. We're going to talk about AI quite a bit today too because it's really, really important. In fact, my wife and I came here a couple of days early. My daughter lives down the road. We took her and her boyfriend to breakfast. On the two-minute walk between the door of the restaurant and the table that we sat at, I overheard three conversations about AI. I think if you rewind the clock even one year, that would have been zero. But today, everybody's talking about it. Well, we should because AI is a huge opportunity. We're already seeing, as I said, benefits. We're seeing business results improve as a result of the use of AI, huge opportunity for us, for our industry. ACI will continue to be at the forefront of using AI. We have to be.
The opportunity is just too great not to be a leader. I've mentioned on our earnings call that ACI has used AI for, I think I said, more than a decade. It turns out it's actually closer to two decades that we've been using AI. We have used it on our fraud detection and prevention, our payments intelligence solutions for a long time. We're continuing to do that. If you stay for the afternoon session, you're going to hear a lot about how we do that. We continue to get better at our proprietary approaches. Going forward, we're going to have three primary use cases for AI. Again, you'll hear about all of them. We will continue to use AI with our proprietary fraud detection and prevention solutions, our payments intelligence. Our models continually train themselves.
We, in fact, have a patent on something called incremental learning where our models are able to virtually not quite in real time but almost to generate new information and learn payments intelligence. Second is customer service. So we have, in fact, loaded into our own proprietary instance of a large language model. We've loaded everything we have in terms of documentation for many of our products. We've given access to that to our Help24 customer service representatives. And what that allows them to do is get productive almost immediately. And it also, over time, will allow us to give access to that directly to our customers so that they can get answers to their questions very fast and will dramatically increase our productivity. And then finally, software development and modernization. Our teams are using generative AI already.
We have seen significant improvement in terms of automated development and testing. We've seen more than 15% overall improvement in productivity. When we look at modernization, so extracting capabilities, functionality out of our proven systems, turning it into microservices for the cloud, we've seen 15 times the productivity that we expect from an engineer doing it by hand. That's 15x, not 15%. Let me summarize what this all means. You're going to hear a lot about the payment hub today. You're going to hear a lot about mid-tier. What does this mean for us as shareholders, as people who follow the company, as customers? We'll continue to reap the rewards of our earlier investments. We'll more than double ACI's serviceable revenue opportunity. The payments hub will be market-leading. We believe we're the only solution that allows our customers to modernize in a lower-risk, proven way.
Our expansion to the mid-tier, that's banks with $50 million-$250 billion in assets, combined with the SaaS capabilities that we've built, gives us a new segment with the same needs as our proven large financial institution segment. That's not cannibalization. That's net new. We're going to deliver high single-digit revenue growth beginning this year. You don't have to wait. I created this with Copilot. I don't know how many of you are my age or maybe a little older. You might remember a General Motors ad campaign called "Not Your Father's Oldsmobile." There are people in this room who don't even know what Oldsmobile is. But I don't know how successful that campaign was. But I love the idea of it because this is not your father's ACI. We've been around it for a long time. We've been in business almost 50 years.
You probably saw that flashing across the screen. Next year it'll be 50 years. We're really good at what we do. We're doing it differently. We're taking advantage of new opportunities. We're going to drive higher growth than you've seen in a long time from this company. We're very excited about where we are. We're ruthlessly focused on executing a clear strategy. We're leaders in applying AI and other critical technologies for the benefits of our customers and ultimately our shareholders. We're going to grow consistently. We're going to do what we say we're going to do. We aren't your father's ACI. We're way more exciting than that. And finally, I think hopefully, that's helpful to you. I want to just sum up. You're going to see this slide again and again today.
What should you have in mind about ACI as you listen and learn, hopefully, from my fellow presenters today? Four things. ACI is a fantastic investment opportunity, a fantastic opportunity for our customers. We have a strong market position. We have a leading position in the global payments ecosystem. Global commerce relies on ACI. Our systems and solutions handle $ trillions of payments every day. Our solutions are trusted. People who do business with ACI don't lose sleep at night, at least not from us. We're accelerating our growth. We're going to deliver high single-digit revenue growth beginning this year.
We have excellent cash flow. We use that cash flow in ways that benefit our shareholders. ACI is a great company. Things are going in the right direction. I'm sure that many of you are sitting there. I know there's a bunch of financial analysts here. You're probably sitting there saying, OK, that's really interesting stuff. But what about the numbers? What are the economics? So I'm going to turn it over to Scott Behrens because that's what he's good at. Scott?
Thanks, Tom. Good morning, everyone. Welcome. For those of you who don't know me, I'm Scott Behrens. I'm the Chief Financial Officer. I have been with ACI now for 17 years. So if you look into that in dog years, as a public company, that's 68 quarters. So I've been here a while. I know most of you in the room. And if I have not met you after 68 quarters, please take the opportunity to break to introduce yourself. But as a little bit of history, since I joined the company in 2007, we have increased revenue 4x. And we've increased equity value 9x. And we've done so with 7 million fewer shares outstanding.
We've done that with a disciplined, focused, long-term capital allocation strategy that balances reinvestment in the business, maybe not as much reinvestment as Abe wants, but reinvestment in the business, M&A, and share buybacks. We'll talk more about our capital allocation strategy, kind of what the trends have been recently and what our outlook is going forward. At the heart of what we do is we're a software company. We are very well positioned for the growth and just the secular growth in electronic payment transactions, but more importantly, the emergence of real-time payment transactions.
Today, what I plan to go through is talk a bit about our three business segments, especially for those of you that are new, talk about what our trends have been in some of our key metrics over the last several years, then talk about what our growth drivers are for each of our business segments. So I'll talk to the segments a bit. And then we'll go in more detail with our product leaders. To start us off, our three business segments, starting with banks. Banks, we have a blue-chip, long-standing customer base. And this customer base, our key competitive advantage with this business is that we've been operating for decades and have built out a global scale. So Tom talked about us being in 94 countries. But to operate in those countries, you have to build out what are called localizations.
So you have to have device drivers. You have to have network connectivity. We've been building that out for decades. And all of that expense is sort of in our past. And so when you look at our business units, this one has the highest EBITDA margin. And part of that is that we've expensed all the build-out over the years. What that has left us with is a high-margin license and maintenance business that is predominantly licensed software and about 75% international, 25% domestic. Our biller business serves, and Ron will go into that in more detail, serves customers in the consumer finance, utilities, telco, insurance, higher education, to name a few verticals. And that's 100% SaaS. This is our second highest EBITDA generation. I think what's important with this business is it has scale.
So when you serve this many verticals, you have the ability to layer on incremental revenue and deliver high flow through the EBITDA. Merchant solutions serves large global merchants focused particularly on e-commerce, 50% U.S., 50% international, smallest in terms of EBITDA contribution. But that's really a function of scale. So as we scale, it'll grow higher EBITDA. Next is what have we done over the last few years? Tom mentioned that we set out in our 2021 Investor Day. We said we were going to grow 7%-9%. We're on track in 2024 to deliver that 7%-9%. I think if you look back, we said merchants would be the highest growing segment, then billers and banks. It ended up being flipped. Banks has been the strongest growth over the last several years.
I think the only other anomaly, if you look at it, is 2022, we had the interchange issue in our biller business that we had to work through, corrected for that in 2023. Now we're back on track. Use of cash. I said we've been very disciplined with our capital allocation strategy. This shows what we've done in the last 3 years. 60% of our cash flow generation has been used to buy back stock, 30% for debt service, and about a small percentage, 10%, for growth investments. That's primarily capital spend in our SaaS business. Very strong capital allocation strategy. The other thing I'd add here is so we exited 2023 at 2.2x leverage.
We have significant financial flexibility, meaning from a credit facility standpoint at this leverage, where we have cash around the world, where we can deploy it, and we can deploy it quickly. If you look at Q4, we generated $85 million of cash flow, redeployed $90 million within three months to repurchase shares. What are the growth drivers in each of our businesses? I think across all of our segments, it's going to be the secular growth in electronic payment transactions. That's going to be key across all three. In banks, another key driver is cross sales. And if you look at that, it's demonstrated in 2023 with our growth and our fraud detection product, which was 35%, and our real-time payments product, which was 25%. Then we layer on new logos and then the payments hub and the increase in the total addressable market that Tom talked about.
Billers, again, transaction volume growth, the shift so we're in biller direct bill pay versus bank bill pay. There is a secular shift of electronic payment volumes from bank bill pay to biller direct. So that benefits us. Then cross-selling of value-added services. And we'll talk more about that later. And then, of course, new logos. Merchants, again, focused on e-commerce, cross-selling, international expansion, and then new logos. So when we look out and we build a whether we're building a 30-day forecast, a 12-month budget, 3- or 5-year plan, we really start with our existing installed book of business. If you see this first layer, it shows kind of a slight decline. We modeled in our first layer is attrition, some level of attrition. Then second is transaction volume growth, which more than makes up for any attrition that we have.
Our licensed software contracts in the banks and merchant segment in particular have CPI uplift provisions. So that's not really in response to recent inflation. It's really a function of structurally how we've had those. So this has not been a significant factor historically. But in the last few years, it has been a significant contributor to revenue growth. And then finally, price increases, especially in our bank business and omni-commerce. We push through price increases on renewal. So the point here on this base of business is that this is very low risk in terms of getting to mid-single-digit growth just with the base of business that we have, then layering on cross sales.
So again, in banks, fraud detection, real-time payments, value-added services, and things like biller and merchant. Then the last layer is new logos and ultimately the payments hub, so as a cross-sale opportunity, but also selling into our new serviceable revenue opportunity. What is it to deliver? In 2024, it's going to deliver 7%-9% growth. Over the longer term, we would expect this to deliver high single digits with an opportunity for additional upside in terms of penetrating into tier two banks. Adjusted EBITDA should track revenue growth. Cash flow should follow EBITDA growth. But we expect the conversion of EBITDA to cash flow to increase over time. We'll continue with our 2.5x leverage.
Our allocation of capital, I would expect in the near term and medium term pretty much to follow what we have done over the last few years, heavy emphasis on share buybacks, investments in the business, and debt service. Finally, just to leave you with a summary of investment thesis for ACI, we have a solid blue chip customer base. We have a high barrier to entry and different aspects in each segment, a wide competitive moat, significant recurring revenue to underline the business, and a very strong capital allocation methodol ogy. With that, I will hand it over to Debbie Guerra to go into our products in more detail. Debbie?
Thanks, Scott. Good job. Well, hello, everyone. I'm Debbie Guerra, Chief Product Officer here at ACI. And I'm really thrilled to be here with you today, hopefully, to provide some more insight into ACI's business segments, our product strategy, and also to share how we are going to remain the standard for intelligent payments orchestration and the best solutions for banks, billers, and merchants. So I like to think of us as the original fintech innovator that shaped and matured electronic payments globally. We're now nearing our 50th anniversary in 2025. And we're in a really enviable position of trust and leadership across our business segments. So Tom talked about setting new paradigms for ACI in 2024. So I had to look that up. So a paradigm is a set of assumptions that creates a viewpoint. The word traces itself to a Greek verb meaning to show.
So in English, we use the word paradigm to establish a standard, a perspective, or a set of ideas. So in this section, what I really want to do is to challenge you to create a new perspective of ACI, what we do, and how we're going to drive future growth as we set the standard for intelligent payment orchestration in the future. So in the next hour, you're going to hear from me. You're also going to hear from my colleague, Ron Shultz, as we provide updates on the three business segments that ACI serves and the product and growth strategies for each area. Additionally, I'm going to spend a little time talking about our payments hub modernization journey in our banking segment, as well as our differentiated payments intelligence focus.
This is really an essential capability that harnesses the power of payments data, artificial intelligence, and intelligent decision-making across all three of our segments. Let's dive in. As you heard from Scott, today, ACI serves three distinct customer segments, our banks, our merchants, and our biller segment. We have unique software solutions that help customers move money across the payment ecosystems in which they operate. Essentially, we orchestrate payments. We have an enviable roster of long-term blue chip and geographically diverse customers. That's really one of our greatest assets. As you can see, while the solutions that we deliver in each segment may vary, there really are some striking similarities across the customers we serve in each of these segments and the challenges that they have and the value we deliver. First, what are some of those similarities?
First, today, ACI serves the largest, most complex businesses in each segment. In the banking segment, that's mega banks, tier one banks, and processors globally. In the merchant segment, that is really large, sophisticated merchants and PSPs globally. In the biller segment, it's our largest direct billers in the U.S. market. Our payment solutions are mission-critical. They're at the heart of revenue-generating activities that bring money into the organizations that we support. They're part of how our customers interact their customers interact with their brands. For these customers from mission-critical solutions, ACI has to deliver solutions that perform reliably and at scale. That's every day, seven by 24, 365. Our customers' businesses really rely on our payment solutions. I'd like to say, and Tom said it earlier, global commerce relies on ACI.
So second, another similarity is that the customers in each segment are faced with challenges to address the rapidly changing consumer payment preferences that are occurring today. They have to adopt new payment methods. They have to deliver differentiated consumer experiences. And they have to do that across numerous payment channels. So the pace of change and the complexity in the payments industry has really never been greater. And that's further fueled by the rapid adoption of real-time payments that's happening around the world. Third, all of our customers have to react to growing threats from fraud and financial crime and the increasing costs that are associated with mitigating both the crime as well as the downstream implications that occur to their customers. These threats have a direct impact to their bottom line. So fraudsters today, they're increasingly well organized. They're tech-savvy.
And now, they're even leveraging AI themselves to enhance their nefarious activities. So our customers need more than just protection from fraud and financial crimes. They need fast, informed intelligence that allows them to outsmart the fraudsters while still effectively serving their actual customers. So this makes ACI's own long-term use of AI in our payment intelligence solutions so important to how we safeguard our customers and their customers across the payments ecosystem. So fourth, our customers have to respond to a complex and changing regulatory and compliance landscape, whether it's country-specific regulatory challenges, whether it's payment network or scheme compliance requirements, the adoption of new messaging standards like ISO 20022, updates to PCI standards, data privacy, information security concerns. It is really complex. And it's rapidly changing. And when you think that we operate in 94 countries with customers in 94 countries, you can imagine the complexity.
So fifth, our customers are really concurrently faced with modernizing their own applications and underlying technologies. Many of them have a strong focus on moving to the cloud. Their core business applications are tightly integrated to their payment services as well. As they modernize and those modernization journeys across cloud ecosystems occur, it creates opportunity. But it also can create complexity for how quickly they can consume the new payment services. Then last, all of our customers in these segments have needs to harness the power of payments data so that they can offer richer experiences to their own customers, so they can differentiate themselves from their competitors, and that they're poised for the responsible use of AI as a business accelerator. Our focus on payments intelligence and intelligent orchestration, we believe, are really core to harnessing the power of that data.
So hopefully, understanding the similarities between these customer profiles and the needs we address makes it easier to understand why ACI operates in these three segments. So why don't we jump into the banks segment and what we're doing today and where we're going? I mentioned earlier that ACI is proud of our blue chip, geographically diverse customer base. And that's particularly true in our banks segment. Our solutions today are used by the largest global banks and processors to capture and authorize payment transactions across channels, to drive the expansion of real-time payments both globally and locally, and to move $ trillions daily in high-value wires and cross-border payments. And we do this, as I mentioned before, across more than 90 countries. So within this segment, we actually focus on two areas, consumer banking solutions.
That includes card issuing, merchant acquiring, ATM driving for self-service banking, and account-to-account payments. Then we also focus on wholesale banking solutions. That encompasses wires, ACH payments, SWIFT cross-border payments, and instant payments. These two areas really support today distinct areas that operate within most financial institutions that we serve. The market dynamics today are driving opportunities to bring some of the capabilities across those two areas, consumer banking and wholesale banking, together so that solutions, they can be served with common solutions. Today, as an example, we already provide a common solution for the management and settlement of instant payments for consumer and wholesale banking. That solution is live with over 100 financial institutions across these two portfolios. Now, you can see here that we talk about our Enterprise Payment Platform. That's evolving to be our future Payments Hub.
We'll be talking a lot more about that. That's really going to be enabling our customers to run on an efficient, modern, cloud-native payments environment for the years and the challenges to come. It's going to also enable them to better deal with the challenges in the industry that they're facing, many of them small fintechs, who are often bringing interesting technology to bear. But they don't necessarily come with a full solution, nor do they come with a burden of being able to serve a mass market. You can see here that underlying all of this is our differentiated enterprise fraud management solution both across consumer and wholesale banking solutions. I'm going to talk a little bit more about that in the second half of the morning session. Let's kind of dive down into consumer banking.
So our consumer banking solution is really where ACI's proven solutions shine, where we support authorization, capture, clearing, and settlement of payment transactions for some of the largest financial institutions and processors in the world. Our software is highly configurable. It's got rich functional depth. It meets the complex needs of our customers in this space. These solutions are reliable, rock solid. They provide high value and peace of mind to our customers. Historically, these solutions were sold as software licenses. They were implemented, integrated, customized, and managed by customers to run in their own premises. Today, these solutions are now cloud-enabled and increasingly sold or renewed to run in either public or private cloud instances.
Right now, as you're going to hear from Abe and myself a little bit later, these solutions are being modernized to run cloud-native as an integral component of our evolving payments hub solution. Over the past 10 years, also thinking about consumer banking, ACI has really emerged as a leading provider of instant payment solutions. We deliver valuable solutions for both financial institutions as well as many of the central bank infrastructures with which those financial institutions have to interoperate. We support 26 real-time instant domestic payment schemes and 10 real-time instant payment central infrastructures. In fact, last Thursday, we actually went live with the Central Bank of Qatar as our 10th central infrastructure. We're really excited about that one. We have more than 100 direct participant banks in 18 countries in production with our real-time instant payment solutions.
We also support, with these solutions, aggregators and technical service providers. This extends our reach to over 400 participant banks. We provide a SaaS solution today for the FedNow service and for the The Clearing House Request to Pay solution here in the U.S. In the U.K., we support faster payments and the SEPA instant payments in Europe. We've got a lot of coverage here. We're currently supporting about 50 institutions in production with this service. Tom talked about speed. Well, last year, we added 10 participant banks in a 10-day period. We are already working to move as fast as we can. Now, shifting to wholesale banking, we provide a reliable and robust software solution that powers high-value payments across wires, ACH, and SWIFT cross-border payment flows. This is with ISO 20022 compliant messaging.
So to get a feel for that, we process more than 66% of all Fedwire transactions that occur every day, 50% of the The Clearing House volumes. We facilitate about 25% of all SWIFT payments traffic in the U.S. And what's interesting is that we estimate that in addition to the value that our customers get from the wholesale payments volumes that they process, our solution, collectively speaking, helps all of our banks create more than $22 billion in payment fee revenue that they can earn over the course of our contracts, which, once again, that volume, when you process trillions of dollars a day in high-value payments, is a significant capability. So these solutions in the wholesale banking space are cloud-native, cloud-enabled, and on-premise. We have all the software delivery models for our account-to-account instant payments.
Then in our wholesale banking payment solutions, particularly in the wire space, that's either sold as a software license that runs on a client's premise or as a subscription that can be hosted by ACI. So you've heard a lot about real-time payments, right? And what we've seen is that as real-time payments experience explosive growth, our solutions are really at the heart of this growing payments revolution. ACI has also published something called ACI's Prime Time for Real-Time Reports. And this is annual primary research that we do. And it tracks the growth and impact of real-time payments globally. It addresses how account-to-account payments, instant payments, are being adopted, the impacts at a consumer level, impacts to financial inclusion, as well as the achievement of a country's economic objectives. And so this is an annual publication that we have to really reinforce our thought leadership in this space.
As an example, with the recently completed research that'll be coming out, we have a new economic impact report that was done in conjunction with the Center for Economic Impact and Business Research. And for the first time, this will show an empirical link between instant payments growth and financial inclusion. And that research is going to be published later this year. And it's really going to help show how instant payments create a fairer financial system for all, improving the chances and economic outlook for previously underrepresented groups, women, young people, and low-income earners in countries around the world. So for those of you that are here in the room with us today, we've provided a copy of the 2023 report in your briefing book. So in the banking space, Tom talked about our serviceable revenue opportunity and the growth projections for this segment.
You can see that we have an SRO that, at the product segment level, is growing from about $2.5 billion-$4.5 billion by 2028. So ACI has been a leading player in our traditional consumer and wholesale banking solutions. But the market is moving away from the delivery of discrete software solutions towards integrated orchestration solutions or payments hubs. And these allow modular onboarding of payment services, flexibility on hosting options, and begin to layer in those value-added services beyond processing of transactions. So the payments hub space, and this is indicated by the dark blue on the left side of the graphics, is expected to grow 2-3 times faster than the other product solution areas and be 50% of the revenue opportunity by 2028. And this growth occurs in all of the solution areas. But it's most pronounced in the payments orchestration hub.
That, for us, incorporates our consumer banking account-to-account payments as well. We're really excited about the serviceable revenue opportunity across our product areas. As you heard from Tom and Scott, we're going to continue in order to continue to grow the ACI franchise; we're investing to speed the building of our own payments hub with the ambition to be the market leader in this currently uncontested space. We're also dramatically simplifying our go-to-market by focusing on the 18 markets in the world that will deliver about 55% of this addressable, serviceable revenue opportunity. This also corresponds to our focus. We'll be focusing on these markets. We're going to be expanding within those markets our mid-tier banking focus going after financial institutions with anywhere from $50-$250 billion in assets.
As both Tom and Scott mentioned, this is a new addressable market for us. Today, these banks, just like the large banks, are feeling pressure to modernize and grow their businesses. And they also want to compete more directly with the capabilities of many of the larger banks. So as you heard from Scott earlier, we expect our B&I business will grow at upper single digits from 2023 to 2026, starting this year. And even though we'll continue to serve our traditional client base, we're going to see a shift towards higher growth subsegments and the delivery of our payments solutions through our Payments Hub. So because it's such a catalyst for our growth, let's spend some time on how we see the Payments Hub opportunity evolving.
So first, it's important to understand the drivers. We didn't just come up with this concept of a payment hub on our own, right? But it's really backed up by industry analysts and our own voice of the customer research. According to McKinsey, banking modernization, active planning on cloud strategies, global real-time payments adoption, and the continued post-COVID cash decline are all drivers that have created tailwinds for the payment hub opportunities. BCG, another consultant, sees the payment hub as being able to address multiple fragmented payment processes, multiple payment file formats, and send and receive connectivity challenges that many of the banks face.
Additionally, a modern payments hub can replace legacy systems with numerous unsupported enhancements that have evolved over the years and really improve how those payment systems implementations and integrations occur in the future. So right now, I'd like you to listen to some of the observations from Gareth Lodge at Celent. He's in the audience. So you can talk to him later. He's a noted industry analyst who's focused on bank modernization and payments hub.
My name is Gareth Lodge. I'm a principal analyst here at Celent, the research and advisory firm. I've been in the payments industry for many, many years. I'm probably best known for my work in real-time payments and payment hubs. Every bank will benefit from a payments hub. Quite simply, they can' t continue with the payment systems that they have. In terms of costs, simplifying your payments estate so you have a single platform to make any of those changes to rather than every single thing that touches the payment system, every time there's an iOS change or a regulatory change, that will pay for itself over time.
The other use case is revenue. Every bank strives to do innovation. They can't because of their payment systems. Those payment systems were never designed to do innovation. So that's where the biggest challenge are. But with a modern payment hub using microservices, not only can you use an interface that rapidly builds the process that you want because it's using a standardized process, you have to do minimal testing. So not only are you innovating, you're doing so at a very agile, fast rate.
So from ACI's perspective, a modern payments hub brings process optimization and automation by modernizing payments by design. So the associated enhancements can include keeping up with everything from regulatory and compliance requirements to improving the customer experience. So our vision for the payment hub actually differs from that of many of the smaller new entrants that are delivering today some excellent cloud-native hub solutions. But they tend to address a more narrow set of functional needs. And typically, you'll find that focused only on account-to-account payments. Our view, though, is that our vision for the payments hub actually includes the consumer payments more broadly for card issuing, merchant acquiring, ATM driving, particularly spanning the authorization, clearing, settlement, and capture activities that are important.
That's really an important distinction because we anticipate that account-to-account instant payments are going to continue to displace cash and debit as instant payments penetration accelerates. That's why it's so critical that our payments hub includes these capabilities. As I talked about earlier today, we embed our rich and differentiated payments intelligence and enterprise fraud management solution in the payments hub because combating fraud is a needed integral capability that ACI is uniquely positioned to solve, particularly from a common technology solution. You're going to recall that today, in our banking segment, we serve the consumer and the wholesale banking customer needs. Historically, these areas of the bank have operated very independently with unique technology solutions. For many banks, this creates complexity. Total cost of ownership is higher.
They can have difficulties in harnessing some of that common data that is required for a common customer experience. Our payments hub solution is going to offer services that each area of the bank can access but from a common technology platform. This really offers, we believe, some unique opportunities for banks to modernize but also to address the TCO challenges that they face today. I think the other thing that's really exciting about the payments hub is it features a robust partner ecosystem. Value-added services are one of the real desires for many of the large FIs to take advantage of. Many fintechs are providing excellent opportunities. Our payments hub partner ecosystem is really going to open the path for new engagement of partners. We also see that as a new monetization opportunity for both ACI and our partners.
Fundamentally, we will support intelligent payments orchestration on a broad level across our payments hub. One of the other key characteristics of our payments hub vision is that it's cloud-native and cloud-agnostic across multiple cloud environments. We enable the acquisition of our solution based on customer preference. They can run it in their own private cloud instance, in the public cloud, as a single tenant or multi-tenant. A driver for many of the banks is to get to the cloud. We're seeing this every day. They want to stop operating, many of them, out of their own data centers, often because they are challenged, resource-constrained, and challenges keeping up with technology change and regulation.
Our relationship with the top players across the cloud ecosystem, and that includes Microsoft, AWS, IBM, Red Hat, ensures that our Payments Hub solution can offer a critical option to accelerate that cloud transition, particularly based on our design focus to ease the migration of complex mission-critical solutions that are used by our current customers as they want to move to the Payments Hub and how they want to move there.
So for those banks that want to continue to operate on-premise, we're going to support that. But we'll do it with cloud-native tooling. So our deployment models for the Payments Hub will match the demand that we're seeing from customers we serve today as well as the market needs of the new mid-market needs of the new mid-market-sized banks that we're going to be selling into in the future. I'd invite you to listen to Peter Hazou of Microsoft, who's also here with us today, as he shares some of the drivers for cloud that we see in financial services.
My name is Peter Hazou. I'm on the industry team for financial services at Microsoft responsible for payments. Banks are adopting public cloud across the board. It goes to the core of their business and operating models and the modernization thereof. There are a lot of reasons, certainly within payments, why cloud is a chosen way. For one thing, it's much more flexible in terms of the business needs for modernization. There are a number of trigger points in payments that are more easily accommodated, for example, the ability to quickly adopt real-time payments or to become ISO compliant. Banks more and more are adopting cloud as a flexible, easier path for these mission-critical workloads.
We live in a data society. Payments are the main source of data. They contain the full flow through the economy and have a huge amount of insights that really only artificial intelligence can discern, really, not only the value of data for clients but also the other elements around financial crime, anti-money laundering, those things that are so crucial to banks. Cloud computing is really the only kind of broad technology that contains all the tools that can really analyze these flows.
So you're going to hear a little bit later from Abe Kuruvilla, our CTO, on how we are building the hub, the AI and technology enablers that we have today that are driving speed, as well as the benefits that our cloud-native approach is going to deliver. So as you can see, ACI not only has strong traction and impact today with the payment solutions we deliver to leading banks worldwide, but we're actively advancing our payments hub solution to offer lower-risk modernization paths to these existing clients and to address the needs of a new mid-market tier offering. So what I'd like to do now is introduce Ron Shultz. He's the head of ACI's Speedpay business to talk to you about our biller segment. Thanks.
Thank you, Debbie. As far as banking goes, that is pretty exciting. Hey, it's an honor to be here representing all my colleagues from ACI Speedpay business. I joined ACI at the beginning of 2023 after about two decades in the payments industry, significant time at American Express, and more recently at Mastercard, where I led their global bill pay businesses. Last year was a very successful one for ACI Speedpay business. Net revenue grew at greater than 20% while making improvements across the board in our business. Let me start by framing the market ACI Speedpay. so we're talking about the U.S. only. We're going to zero in on the 130 million households in the U.S. The heads of these households pay about 17 billion bills annually, representing about $6 trillion in payments.
Going back a few decades, consumers paid these bills across a variety of payment types, including checks, which are not dead yet, phone, walk-in payments. They moved most of their payments to bank bill pay. Today, we're nearly about 80% at biller ACI Speedpay, as you heard, is in the biller direct business, where we build and host biller direct payment sites or provide payment capabilities via APIs. Why biller direct? Because paying on a biller direct site offers more payment choices, often an ability to view and pay your bill in one place, and the peace of mind that your payment's been received and your account's been updated. Look, Americans are known to be last-minute bill payers, either because they're carefully budgeting day by day or they just procrastinate like I tend to do.
Regardless, when your bill is due on the 30th of the month, you're facing a potential service shutoff from your utility or a late fee from your loan provider. You need to pay your bill now and have certainty that the biller has credited your account. That's ACI Speedpay does for our billers and their consumers. Household bills typically come from a steady set of industry verticals. You saw them earlier, consumer loans, mortgages, utilities, et cetera. When you look at consumer behavior in bill pay, it's followed the trends you see across the payments industry in the U.S. Consumers are increasingly using mobile payments, of course, becoming more and more interested in new payment types like Apple Pay, Google Pay, and PayPal. In the past year, 40% of consumers have used a mobile wallet to make a payment, up from just 26% in 2020.
Generally, while we've seen some advancement in biller direct technology and the customer experience, most would agree our industry has lagged the overall digital payments market. We have room to improve the biller direct customer experience. If you picture the head of household sitting at her kitchen table on a Wednesday night doing some online shopping, when she switches over to pay her bills, it may seem like she's stepping back in time 20-plus years to the late 1990s. That said, the bill pay market is stable. It's generally recession resistant. It's been growing steadily in the single digits for years. But I'm excited ACI Speedpay to lead the biller direct market down a path toward modernization. The biller direct market is served by midsize players ACI Speedpay, along with Paymentus, Kubra, divisions of FIS, and Fiserv.
There are another dozen or so smaller players that include industry specialists in higher ed, utilities, government. ACI Speedpay is, by most metrics, the largest biller direct player in the U.S. with over 3,000 clients, nearly $700 million in revenue. It processes $200 billion of bill payments every year across ACH, credit, and debit. Our clients include many of the top companies across mortgage, auto lending, electric and gas utilities, names like GM Financial, Selective Insurance, Entergy, the IRS. We are absolutely blessed with some of the most talented people in the industry. We are hands down the absolute best in this business, best in the world, I'd say, at processing bill payments. As you see, we offer a full suite of solutions and capabilities meeting the needs of billers in all segments and sizes.
These include basic features like consumer websites, customer service portals, recurring payments, ERP integrations, electronic billing, and disbursements. Now, in addition to being a payments geek, I'm also a lifelong student of business. I've read my fair share of books on strategy and business performance. One valuable business book I reference lately, even though the book is almost 20 years old, is "Good to Great" by Jim Collins. Collins delineates the characteristics of those companies that separate themselves from a pack of good competitors to rise above and sustain great performance. There are three critical elements that must be defined for these companies that achieve this breakthrough performance. Number 1, be clear about the one thing you're best in the world at. Number two, define what you're passionate about. The third thing is to identify that most important financial metric that moves your business.
Collins then goes on to define the flywheel effect, where companies make many small improvements, all working toward the same objective, which eventually, with their cumulative effect, delivers that breakthrough performance we're striving for. ACI Speedpay business is on that path toward breakthrough performance. It'll accelerate our growth trajectory and distance ourselves from the competition. So let's get back to Collins' three elements. ACI Speedpay, number one, we are the best in the world at enabling payments for billers. Our payments team averages more than 15 years of industry experience. We have the sharpest expertise you can find, covering ACH payments, card processing, vast card network knowledge, and longstanding relationships. We deliver best-in-market payments guidance to our customers, including which payment types to accept and which channel and at what price. We consolidate our billers' payments into one digestible reconciliation file.
We pay our billers faster than any other provider. We offer what we call integrated treasury management, which means we pay our billers in just one day with all the remittance data they need in the right format at the right time. Number two, what are we passionate about? Payments, payments, ACI Speedpay is powered by hundreds of self-proclaimed payments geeks. We're passionate about delivering high-quality service to our clients, including reconciling their payments down to the penny. We have industry-leading risk management and fraud tools that leverage not only network tools like address verification, CID, but also our very own proprietary AI-driven fraud prevention tool that identifies and prevents fraudulent and expensive card behavior, saving our clients $ millions every year. Third thing, our most important financial metric, it's net revenue. We are experts in managing interchange expense.
We're experts in managing interchange expense, structuring customer deals in the right way, optimizing payment operations, all to maximize our net revenue growth. We have the scale. We have strong relationships across the payments ecosystem, including our large processing partners like Chase and Worldpay, the card networks Visa, Mastercard, Discover, and American Express. We also work directly with payment innovators like Apple Pay, Google Pay, and PayPal, in addition to debit networks like Star, Pulse, and Maestro. Here's an illustration of this "Good to Great" program in action. You heard, in the middle of 2022, we started a flywheel campaign, if you would, to manage our escalating interchange costs, which represent by far our largest expense. Numerous teams came together to add to that momentum, working with large clients to reprice unprofitable deals and to implement additional logic and controls with others.
We kept that momentum going throughout the year, which helped us turn interchange management from an area of risk ACI Speedpay to a competitive advantage, ultimately driving that record net revenue you saw for the Speedpay business in 2023. We put all this together to enable frictionless payments across all channels for our customers. And at the end of the day, that is primarily what billers want and need for payments to work securely and quickly for their consumers and to receive their funds and remittance data accurately and timely. ACI Speedpay does this better than anyone in the business. Add to that our digital-first product suite, including our patented mobile wallet capability called Walletron, omnichannel payment choices, IVR, advanced fraud tools, all powered by modern APIs, and an improving consumer-facing experience. That is how we win and improve our business.
Let me bring this to life with a couple of examples for you. I did warn you earlier that we're payment geeks. So let me geek out for a minute with this example, how we flexed our payments expertise to improve ACI's bottom line. We had an insurance client ACI Speedpay for several years with flat to no profitability from our perspective at ACI. The financial arrangement was such that ACI charged the insurance carrier a single fee to cover debit and credit processing costs. Let's call that 2.3% and a smaller fee for ACH payments. The insurance carrier, in turn, allowed their customers to pay with their choice of credit, debit, or ACI Speedpay safely, securely, and quickly processed all the consumer payments and provided the funds and necessary data back to the client on a daily basis. All sounds good.
ACI absorbed the processing costs for all the debit and credit transactions. However, consumers were increasingly choosing credit cards and often expensive credit cards, which cost us more than the 2.3% we were charging the client. We were not making money. In partnership with this insurance client, we adjusted the pricing, where consumers were charged a service fee of 2.4% for using their credit card. The client continued to absorb the fee for debit and ACH. Consumers paid a fee for using their credit card, but not so for debit and ACH. What happened? We saw consumer behavior change based on the new pricing model. A good percentage of consumers shifted their payment choice from credit to lower-cost debit and ACH. Our clients' payment costs decreased 10%. Our margins ACI Speedpay improved from about 0% to just above 20%.
Still below our average, but it's a hell of a lot better than 0%. So remember that flywheel effect that we're pursuing that will deliver that breakthrough performance. So this is one example of many adjustments we made across our client base, our own operations, all to better align pricing with consumers' payment options and improve our net revenue per transactions. We executed dozens of initiatives, which ACI Speedpay's interchange expense, adding $ millions of net revenue in 2023 alone. We still keep a very close eye on the cost of debit and credit card acceptance, as these rates and policies do change frequently. And again, as interchange management may have been a challenge in the past ACI Speedpay, i consider it a core competency and a differentiator for us within the bill pay industry today. Give you one more example.
I stated a few times that we're the best in the world at bill payments. I think you got that. We also offer numerous value-added services to our clients beyond bill pay. One example is for a large utility client in the Southeast. In the midst of the pandemic, this utility received funds from the federal government to assist low-income customers with their energy bills. These customers, however, needed to be prescreened and qualified. The funds needed to be distributed in a timely manner to meet the government deadlines. ACI Speedpay team developed a simple solution for the utility that could be implemented quickly and accessed by all their customers. The ACI team configured and launched a customized IVR solution for them in less than two weeks. The utility's goal was to enroll 10,000 of their customers in that first week. They enrolled 90,000 in just two days.
We helped the client reach their customers who really needed relief at this time of high energy usage and rising rates. More recently, we worked with this same utility to tackle a different problem related to fraud. We put controls in place to block card aggregators. We used our ACI Fraud Management solution that detected patterns that indicated that this utility's websites were being used by card testers, a scam where fraudsters test stolen cards to determine if they're valid. The fraudsters were operating at scale, testing hundreds of cards, resulting in very high chargeback rates for this client. We worked with this utility to put some changes in place on their websites and account validation protocols to block the card testers. Once the blocks were in place, the card testers moved on within a matter of days.
The clients' chargeback rates dropped back down to normal. Again, these are small changes pushing that flywheel toward breakthrough performance. So what's next in bill pay? What's next for us ACI Speedpay? first is our continued path toward modernization. You might call it a new paradigm ACI Speedpay. as you see, we've grown through acquisition and organically over the past couple of decades. We've acquired unique capabilities with each acquisition. And we're now finally leveraging the power of bringing the best-of-breed capabilities to one platform for our customers. In prior years, we onboarded each client to one of our four platforms that best met each client's needs. That's changing as of the beginning of 2024. We're now onboarding all of our new clients onto our newest release of our biller direct software called Speedpay One.
Speedpay One is a scaled, configurable, agile, and modern version of our software featuring continuous deployment. This increases the efficiency in product development immensely and makes us more agile and responsive to changes in the market. So the flywheel keeps turning as we improve processes and capabilities across the ACI Speedpay organization, which will power accelerated, profitable growth for years to come. And for those of you sticking around the afternoon session, you'll hear more about our solutions and product capabilities that will allow us to meet those ever-expanding needs of our bill pay customers and make us the absolute best in the industry. Let me wrap my session. Let's hear from one of our clients that uses our proprietary ACI Walletron electronic billing and payments product.
With Walletron, we've seen a huge shift from customers now self-serving and making payments kind of on their own volition instead of, again, needing to call in and work with an agent, which these days, no one really wants to pick up the phone. In the middle of 2019, we actually hit our peak of just over 25% of our payments were being made via an agent over the phone. That number today is just under 4%, a massive, massive shift. And we've undergone a number of initiatives. But Walletron is 100% a key bullet there. So it's definitely helped us on a number of fronts.
So great impact there, leveraging our ACI Walletron technology. So I thank you for listening. I hope to see many of you this afternoon. And we'll see you after the break to hear more about our merchant business from Debbie Guerra. Thank you.
Please welcome back to the stage Debbie Guerra.
Well, well, thanks, everyone. Hope you had a good break. So welcome back. We're gonna get started again. I'm gonna cover our merchant business and then move into payments intelligence. So before the break, Ron talked ACI Speedpay and the solutions in our biller segment. I will tell you, I won't be geeking out like Ron did, to talk about merchant and payment intelligence. But I do wanna talk to you, a little bit about our focus on intelligent payments orchestration and the role that plays not only in the value we deliver with our biller customers ACI Speedpay, but also in how we drive net revenue growth as we optimize interchange and really drive better payment decisions across the ecosystem.
Another area where intelligent payments orchestration is critical is in our merchant segment. Before I get into that, though, I wanna address a question that comes up very often. People ask, what's the difference between a direct biller and a merchant? I think sometimes when Ron wants to grow the biller business, he likes to pull some of the merchants under his umbrella. But what I would tell you is that there is a way to think about it. While not definitive, in general, a direct biller takes payment after a service is rendered. So you can think of that as they pay later versus a merchant, which typically takes payments when goods or services are procured, when the customer pay
s now, right? Merchant customer may initiate a payment at some kind of point of sale where a biller direct customer usually pays or schedules a payment based on receipt of a bill from the biller, right? And there are similarities, though, between both. And that could be spanning the use of wallets, alternate payment methods, subscriptions or recurring payments, and then increasingly mobile payments. So hopefully that helps you understand the differences in the segments. Oops. Let's see. Let me go forward. I think I there we go. So in our merchant space, ACI serves more than 450 large direct merchants globally.
So we have deep capabilities in supporting orchestration for some of the largest retailers as well. We have more than 80,000 in-merchants that we support indirectly. And that happens through payment service providers that often white label our payment orchestration solutions and then go to market to a larger merchant base. We have an unparalleled global reach of connectors. So what is a connector? A connector is a route for a transaction to a specific country, an acquirer, or a defined payment type with unique defined functionality. And this is where our global e-commerce really, really shines because of the breadth of our connectivity. So for merchants, ACI provides independent, and that's an important word, intelligent orchestration platforms for large, sophisticated merchants who want to own and manage their customers' omnichannel experiences.
They wanna own the decisions about tokenization, about transaction routing for desired outcomes, about payments intelligence, and importantly, to take advantage of multi-acquiring. So multi-acquiring is an important cost concern for large merchants, particularly those that are operating in lower margin businesses given the high cost of interchange and the high cost of acquiring that many merchants face today. So by offering payments orchestration that can deliver the best acquiring routes and multi-acquiring routes, ACI is able to help these very large merchants best manage costs. But also it helps them to differentiate, and helps us to differentiate from competitors that may be an individual acquirer that bundles a very standard type of merchant solution. So we believe that being, having an independent payment orchestration solution is really a great fit for these large, large global merchants. We see large merchants very focused on making decisions that improve transaction authorizations.
So what is that? They wanna drive a, a really positive customer experience. They wanna get the revenue into their businesses at the point of sale, whatever, wherever and however that occurs. So the auth the transaction authorization and routing includes decisions such as rules for authorization, least cost routing, transaction routing for speed, or optimal authorization rates. And you have to do that at the same time that you're balancing keeping down fraud, and chargebacks. And that's particularly true in the digital channels. So our solutions really can support most software and necessary card scheme, acquiring bank, and network certifications, for all the acceptance devices that are in use. And that's really important because it's a very complex space when you think of all the terminals, the routes, the connections, the payment methods in use, and the acquirers and the network connections.
Our solutions span global e-commerce payments orchestration, merchant fraud detection and prevention, and omnichannel payments orchestration. We serve the retail, the fuel and convenience store, the grocery and drug store, and the quick serve restaurant verticals primarily, but not exclusively. And in this space in merchant, while we do have some situations where we still sell and maintain on-premise software solutions, increasingly most of our merchant customers use ACI solutions that are hosted either in our own data centers or now that are live in the Azure public cloud. So we've seen a similar shift in merchant that we've seen in the bank segment. And that applies to traditional in-store merchants that are looking to see a strong uptick in digital payments. They're looking for cloud ecosystem capabilities. They wanna be able to scale in peak periods, and they want improved time to market for new programs.
This whole idea of speed to market and scalability that the cloud can offer is also a driver for the types of merchants we work with. Let me talk a little bit about the serviceable revenue opportunity in our merchant space. We actually, and once again, we serve large merchants that typically have revenues in excess of $1 billion a year and that desire an independent payments orchestration platform. Many of them have numerous thousands of physical retail outlets as well as growing e-commerce and mobile payment needs. Many operate globally, and they need a solution with a broad set of connections to numerous countries, payment methods, and acquirers. This group represents today about a $2 billion-$2.5 billion serviceable revenue opportunity.
We see it growing 6%-8%, over the next five years to $3 billion-$3.5 billion. And we're well positioned in this space. Additionally, as I mentioned a little bit earlier, specifically for large and growing payment service providers, many that operate across various countries, we provide our secure e-commerce payment orchestration solution, which bundles the e-commerce platform with our merchant fraud solution, and that they then white label that, to take their solutions to market.
So what I'd like to do now is share with you some testimonials from two customers. I would ask you to remember we're a global company. So the first of these is in French, but we do have subtitles. And so that's with Auchan, who's one of the world's largest multi-format food retailers with over 2,000 stores. Then we also have a testimonial from HyperPay, which is a rapidly growing PSP in the Middle East.
Sommes en relation avec ACI depuis de nombreuses années, et nous avons différents axes de travail. Nous avons des sujets opérationnels que nous travaillons au quotidien avec des experts disponibles de la part d'ACI sur des sujets techniques, mais aussi fonctionnels. ACI nous accompagne aussi sur des sujets plutôt stratégiques, plutôt long terme, en nous proposant de nouvelles solutions basées sur des nouvelles technologies. On en a évoqué certaines. On a d'autres qui sont encore en cours. Mais effectivement, on apprécie finalement de pouvoir avoir un partenaire qui nous aide sur des sujets au quotidien et qui nous aide aussi à nous projeter sur des sujets d'avenir en matière de paiement.
Donc voilà, ça, ça participe aussi à la fluidité, à la rapidité, ce qu'attendent nos clients finalement en termes de paiement, que ce soit sur l'activité digitale ou en magasin. Nous l'avons vu, nous sommes sur un marché très dynamique sur le commerce digital en termes d'offres de paiement, en termes de réglementation, en termes de technologie. Et donc pour Auchan, nous avons dû définir des priorités effectivement pour savoir quels sont les enjeux sur la partie paiement à adresser.
What we really like about working with ACI is that we get obviously the world-class payment gateway, which allows us to, which comes with all the ready-made tools that allows us to go to market very quickly. So it took us only six months to get up and running with our first bank. And we've gone from one bank to connections with more than 12 banks. So we've actually grown to the largest network in the region. ACI has not just helped us going forward. They've helped us all through the whole process.
So really, for the last year and a half, we've been working really hard on the Saudi market. So we're starting to see all the hard work materialize from that market. So we've actually experienced 300% growth in the last quarter. We're looking to, you know, by the end of the year to get to actually double that. The best way to do that is partnering with, again, with ACI because, again, there's that scalability and reliability. But also there is the forward thinking that if we ever need anything in the future, ACI will ber able to help us out with that. So the e-commerce and payment orchestration solution, this really helps our customers, both direct merchants and PSPs, to sell more, providing the e-commerce solution
The mobile card-not-present, payment options that most resonate with consumers in a local market, but doing it in a way that optimizes transaction authorizations while leveraging AI-enabled, fraud protection to reduce losses from fraud and chargebacks. This same solution is increasingly used by our omnichannel customers, all accessible from a single API. And it's the basis for the striking increase in digital transaction growth that we're seeing in traditional in-store customers, particularly in the grocery space, for example. You know, as Scott mentioned earlier, ACI's merchant business will continue to grow in 2024 at mid to high single-digit growth. We serve a very focused target market with our independent payment orchestration solutions. So now I'd like to focus on ACI's payment intelligence solution.
This is a critical capability that not only addresses costly challenges our customers in all segments are facing, but it also drives growth drives growth for us. So some of our most differentiated assets include our AI and machine learning-enabled payments intelligence capabilities. These capabilities are grounded in our proven software solutions for enterprise fraud management for banks and for fraud detection and prevention for card-not-present digital transactions for merchants and billers. We're focused on positioning our payments intelligence and fraud orchestration framework more holistically going forward in order for us to enable data and intelligence gathering and sharing across the payment continuum, all while capturing a larger share of the high-growth fraud and payments intelligence market. Our unique value is really in the embedded infrastructure that powers all aspects of the global payments ecosystem.
That's from central banks and commercial banks to merchants, billers, and many players in between. So in order to really effectively position and grow this business, what we've done this year is we've combined our two fraud-focused solutions that were individually part of our banking and our merchant offerings, and we put them under a common framework, a common product portfolio, that'll be capable of addressing the broader needs to an expanded market. To effectively address this and the growing impact of fraud and financial crime and at the same time to harness the power of all that data that we have, our customers, they're challenged to unify immense volumes of diverse data across the payments ecosystem. They've gotta do that in real time. They have to facilitate precise, intelligent decision-making with optimal efficiency. Now, doesn't that sound like the perfect opportunity for AI?
So while AI, machine learning, large language models may be new terms for many payment companies, at ACI, we've leveraged these capabilities for years in our fraud solutions. In 1998, ACI began delivering AI competencies as part of our enterprise fraud management solutions for banks. We leveraged neural networks that were developed originally by Nobel Prize winner, Dr. Leon Cooper. Since then, with the impact of years of learning, rigorous governance, advances in technology, and the really the efforts of our experienced data scientists, we've developed and received a patent for our AI-enabled, incremental learning solution. And this uses AI so that our fraud models actually learn and adapt over time. It drives the efficacy of our real-time fraud decisioning and the lifespan of our models. We really have been doing AI. We understand it, and we're gonna continue to leverage that and grow with it.
So we've got deep experience in the use of machine learning and AI and applying that to address very real and accelerating challenges impacting our customers. You know, today, payments intelligence is delivering predictive modeling with multiple AI models running in parallel. We're able to address four of the top fraud trends that we see. This includes anomaly detection, account takeover, pre- and post-authorization for bank declines, and friendly fraud. Our solutions will actually alert on the specific fraud type by classification. It allows for faster-informed decisions and higher precision. We run different types of models in parallel focused on specific trends across the segments that we run in, and we do that as a classification. So however, beyond the power of the data we harness, it really is about looking beyond just addressing fraud and financial crime.
So our payments intelligence solutions and our focus on predictive modeling have really been based on how we've pioneered best-in-class AI and ML capabilities. We can boost operational efficiency and cost efficiency. This is a real need because the cost of fraud is just growing for our customers. We have a way to really address that very efficiently. We can deliver precise and qualified actionable intelligence in real time, and we can mitigate financial and reputation risk. Also, we can power an enriched payments experience while adhering to regulations, compliance, and policies. This is really important as well for the ethical use of AI.
We call this a payments intelligence framework because it can be leveraged more broadly by other participants in the payments ecosystem who may need to collect our anonymized signals from our data so that they can provide richer solutions to their own customers. So this framework itself, as it evolves, will also provide incremental monetization opportunities for ACI in the future. So, we see significant growth in the unique fraud and payments intelligence total addressable market currently, particularly in the fraud solutions detection and prevention space growing from $15 billion or $16 billion to $28 billion by 2025. And so you see the, the, the numbers are a little different here in terms of the time range. Earlier in the other segments, we called out serviceable revenue opportunities in those segments. Here, we're actually calling out the total addressable market.
We're still working to fine-tune exactly how much of this revenue opportunity we're gonna be able to address in each of our segments: banks, merchants, and billers. But we're really well-poised as we, you know, reposition our payments intelligence solutions more directly in the market to expand our reach as this becomes an integral component of our go-forward payments hub. So, you can see from some of the quotes that are showing up there right now that these solutions are critical to our customers' business. The growing size of this addressable market is indicative of just how challenging and serious the issues facing our customers really are. You know, we're ready to grow more rapidly in this space, and through the segments we serve.
So this afternoon, you're gonna get more detail, use cases, and examples on what we're doing in payments intelligence from Cleber Martins and Erica Dietrich sessions. So to wrap up, you will have heard from Tom this morning that we see an exceptional opportunity for ACI's segments. We have great growth opportunities in all three of the segments. We provide intelligent payment orchestration solutions that meet our customers' needs. Our solutions result in the movement of money and increasingly the data associated with each transaction. So I hope you better understand the payments paths and the new paradigm for growth that ACI is addressing.
So through focus, speed, and new partnerships, we believe that we can continue for the next 50 years as the standard in payments and money movement. Now, I know sometimes it's hard to visualize what it means to orchestrate a payment or to provide payment solutions that allow our customers to embed effective payment experiences into their own customer interactions. So let me conclude by sharing a video that'll give you a flavor of the types of day-to-day commerce experience that ACI's solutions underpin.
At ACI, we're changing the way people live, work, and play by facilitating payments of any type, anywhere, seamlessly, at lightning speed to accelerate global commerce. Let's look at a day in the life of one family. The parents have just bought their dream home in Atlanta, Georgia. They're at the bank transferring funds for their down payment to a mortgage lender in real time. Now they are moving in. It's time to turn on the power and cable, stop to get groceries, fuel the car, and get cash. It's never been easier. Their daughter is in Australia doing a semester abroad. When she arrives, she uses her credit card to upload money into a local instant payments wallet, purchasing goods and services and incurring no fees.
In the meantime, her parents pay her tuition through an ACI Walletron pass and get instant confirmation that payment was received and posted. She purchases curtains and storage containers for her dorm room, scanning products with her phone and paying in aisle. Their son lives in Florida and needs to book a flight home to see his parents' new house using Buy Now, Pay Later to pay for his ticket. While planning for his trip, he takes a quick timeout to buy a new skin in his game using his crypto wallet. Meanwhile, their daughter uses her credit card to buy a gourmet food basket online to send to her parents as a gift. But wait.
Her purchase triggers a fraud alert from her bank using ACI's payments intelligence solution. Only when her identity is confirmed are funds released. Just as the family orchestrates their lives, thousands of banks, billers, and merchants trust ACI to deliver intelligent payments orchestration globally. For 6,000 customers, the world's top 10 banks, 3,000 billers, 80,000 merchants, and PSPs, ACI's payment software solutions handle billions of transactions, enabling the movement of trillions of dollars every day, impacting people and businesses worldwide.
So as you can see, the world of payments is highly complex, and our solutions make it possible to simplify, scale, and secure. And that's key to global commerce. So now I want you to hear from our CTO about how we do this. So please welcome Abe Kuruvilla. Thank you.
Thank you, Debbie. As Debbie mentioned, my name's Abe Kuruvilla, CTO of ACI. Been with ACI since October of 2023, so not a long time compared to the tenure that my colleagues have been up here with. Before joining ACI, I've been with fintech for over 25 years. I was actually the CIO of Dell Financial Services out of Austin and then CoreLogic out of Dallas. CoreLogic is actually a mortgage and real estate data analytics company. Through those experiences, I've had the privilege of really leading and experiencing, you know, public-to-private transitions, cloud transformation, even establishing data science practices, right, and led numerous technology modernization strategies. Now, since my arrival at ACI, I've been impressed by the depth of payments knowledge. Now, we've already heard about the amount of talent we have through our segments and our businesses.
But it's not just about the people. It's about the assets. And I think Debbie and Ron have done a fantastic job just outlining just how powerful our global payments platforms are, right? ACI has been delivering highly scalable and available payments platforms across the globe. And then Tom also mentioned ACI has also been an AI trailblazer. While AI dominates the news and all of our feeds every day, ACI has been at the forefront of AI for decades, right, especially in our fraud and analytics solutions. To continue our experience in AI, we're actually what I'll talk to you a little bit about today is just how we're having engineering embracing AI. ACI's remarkable track record, coupled with my lifelong passion for innovation and technology, just fuels my excitement as I lead our company's technology evolution.
As Thomas Kuhn, an American physicist and philosopher, once wisely said, "All significant breakthroughs are break with old ways of thinking." You know, I actually had to think about that and looked it up. In essence, genuine progress doesn't emerge with minor tweaks. It actually arises when we challenge common beliefs, right, dismantle old frameworks, and I'll talk a bit about that, and forge new paths, one of our themes. These transformative moments define our understanding and propel us forward to the future. This in mind, let's get into and talk a bit about ACI's modernization strategy and our AI strategy, right? I will say for the next few minutes, obviously, I'm gonna speak a lot about the hows.
Now, with all due respect, a lot of this information is publicly available from this recording, so I'm not gonna get into specifics about our intellectual property or the technology choices we've made. I actually have my heads of architecture, engineering, and data science here with me, so happy to have a more deeper chat on a private basis if you have any specific questions, okay? But let's get into our modern architectures developed considering our clients' diverse needs. You've heard it from all of our speakers, right? They expect cloud-native, public cloud, private cloud, and on-premise, right? In essence, they desire to run and host our platforms anywhere. Now, why is that critical, right? Especially that last bit that I say, on-premise.
I think we all have to realize some of our biggest clients, including some of the banking giants out there, they've heavily invested in their infrastructure over the years. ACI's proven platforms currently operate on those robust foundations, and we remain committed to supporting our existing platforms while offering seamless migration paths that avoid disruptive Big Bang upgrades, right? Now, let's delve into core principles about ACI's modern architecture. First, we deliver high throughput, low latency, and fault tolerance. Our architecture isn't just about buzzwords. It's about performance, right? We've woven critical capabilities into its very fabric. When we handle, you know, in payments, nothing's smooth. There's ebbs and flows in transactions, right? So we need to be able to take surges in transactions as well as gracefully exit when we have interruptions in a network, right? ACI's architecture ensures seamless flows.
We go beyond being modern. We all talk about it, but we do go beyond being modern. Having a modern architecture isn't enough. Our clients demand more. Over the next 12 months, they seek solutions that are cloud-native, can scale up and down. You know, we always focus on the scaling up, but you also, to be cost-effective, need to be able to scale down automatically. It's reliable. It's also API and web services first. At ACI, we're aware of those demands and committed to not just meeting but exceeding those expectations. We're committed to delivering lightning speed. I'll talk a little bit about it. Some of the areas and principles we're using to move fast is it sounds simple, but it is. Tom mentioned it earlier: focus, focused execution.
We actually have dedicated teams that we pulled out of jobs, and they are only focused on developing our new payments hub, right? No interruptions. We're innovation at the core. Our engineers embrace AI-first techniques, prompt engineering, and significant automated testing. And around productivity, you know, that's always the buzzword around AI. I will actually share some real numbers that we've experienced in productivity gains from AI. And then lastly, foundational microservices. We actually have reusable microservices that, you know, really offer capabilities, things like security, monitoring, and alerting. This allows our engineers to actually really focus not on those reusable capabilities that you need across everything, but they really focus on true payment capability and innovation. But what else do our clients need, right? As we discussed modern architecture, cloud-native paradigms, and a warp speed of AI, they want assurance.
Can ACI continue to deliver groundbreaking products while maintaining quality and meet and exceed nonfunctional requirements? I think it's a pretty known out there, nonfunctional NFRs, right, that we already support. The simple answer is yes. In fact, the reason ACI continues to win today is because we're already doing all of these things extremely well. So our challenge is really to raise the bar as we go forward. Our commitment to excellence remains unwavering. While our customers appreciate our proven technologies, we're not gonna be satisfied with the status quo. We do wanna continue to raise the bar, right? So around these NFRs, some interesting improvements we're doing around security. We're actually embracing a zero-trust framework. Now, what does that mean, right? Most people, when we think about security, you think about the edges of your network. We're ignoring that, right?
Our new products treat every user or service regardless of access or protection. You know, our new products actually look at every connection as a new connection. It ignores whether you've actually connected to it before or the location you're coming from. This approach, it actually minimizes your attack surface, right? It's actually best in breed in cybersecurity threats, and ensures a robust user experience. Around availability, our customers demand uninterrupted services. To meet this need, we offer multi-region and, if needed, multi-cloud solutions and architecture. Automated failover and zero downtime maintenance keeps our system resilient. Leveraging AI Ops, we proactively self-heal infrastructure, address performance degradation, and prevent potential outages before an impact to the payment operations. Scalability. You know, some of our largest customers today, they probably don't even exceed 2,000 transactions per second. But the funny thing is, they actually expect unlimited scalability, right?
Our base multi-tenant environment supports 10 times the transactions per second needed, and it actually will horizontally scale. Around Generative AI, we seamlessly incorporate AI and GenAI across our engineering and operational processes, enhancing efficiency and innovation in our own teams. I'll share more about AI in a few slides. Finally, by harmonizing security, availability, scalability, AI, we'll actually achieve significant productivity gains. Our streamlined approach translates to cost efficiency and lower cost per transaction. Now, unwavering commitment to excellence ensures our customers receive secure, available, and scalable and efficient solutions. Tom mentioned earlier ACI is diligently constructing a cloud-native multi-tenant and scalable payments hub. One of our goals is to facilitate a low-risk migration path for existing customers transitioning to our new products. You know, in technology today, one of the biggest problems that we have is organizations ignore the migration challenge, right?
In fact, most times, a customer migration journey typically takes longer than it takes to build the product. So this is a critical problem we're considering. At ACI, we're actually taking strategic approaches to address the challenge. You know, on this slide, I can actually talk probably for hours about this center and our proprietary messaging gateway. And then also on the right side about what we're building around our new payments hub. But for the interest of time, I'm gonna highlight a few common themes of how we're gonna make the migration journey for our customers seamless. First, we offer seamless integration. ACI's proprietary messaging gateway, our lightweight and high-performing messaging system, acts as a crucial communication layer. It enables both old and new systems to interact seamlessly by providing common messaging protocols.
Legacy and modern applications can exchange data effortlessly through our gateway, ensuring a smooth transition. Second, we have considerable scalability, you know, when we think about scalability. Our current and new technologies differ in scalability features. Our gateway actually steps in and allows for multiple instances to handle incoming messages, right? So the system actually dynamically balances the messaging load across instances. Our gateway ensures that there's an efficient distribution across those loads, right? And finally, decoupling systems. Our gateway further enhances compatibility by providing asynchronous communication. Current system can publish messages to our gateway while modern microservices subscribe to relevant topics. In essence, our gateway serves as a bridge between our proven and legacy systems and our modern technologies. Its reliability, adaptability, and compatibility features empower our customers to embrace incremental migration approaches confidently. Now, the buzz out there also, other than AI, is also API-first.
ACI's modernized approach centers on providing a well-defined core set of payment capabilities, complemented by the flexibility for customers and partners to create value-added functionalities through APIs and web services. This strategic framework ensures that customers and partners can seamlessly incorporate ACI solutions into our unique branded platforms. Some key tenets, right? Simplicity and scalability through API-first integration. ACI champions an API-first approach to simplify and streamline integration across diverse systems and platforms, enhancing interoperability for user experience. The strategy enables our clients to quickly adapt to market changes and scale their operations efficiently, ensuring they remain at the forefront of the payments industry. Second, at the heart of our innovation lies our commitment to security, exemplified by embracing open banking standards. Open banking standards not only facilitate secure third-party access to financial data but also ensure a more personalized and innovative payment experience.
And lastly, agility and innovation. Our payments hub is built for agility, allowing us to rapidly introduce new features and support emerging payment methods without significant overhauls. This flexibility ensures that we are efficiently meeting evolving customer needs and stay ahead of the industry trends. Moreover, by offering open APIs and web services, we innovate across the payments ecosystem, driving progress, and fostering a competitive market environment. I do love this slide, just the background. At ACI, we're well into our technology transformation journey. But this isn't just about buzzwords or industry concepts. It's about the methodologies that drive our engineering teams. In fact, ACI has a long history with AI, as Tom and others have mentioned. AI and machine learning have utilized these technologies in both our fraud and analytics solutions.
But more recently, in 2023, we actually deployed a capability called ChatUPF, a powerful chatbot, to our Help24 team. ChatUPF actually sits on top of a comprehensive collection of Universal Payments Framework documentation, wikis, FAQs, and Q&As. In fact, within the Help24 team, we've actually seen remarkable productivity gains. How quickly that team can actually resolve and answer how-to inquiries from our customers has been immense. It's improved our operational capability, but it's also improved our customer satisfaction. Now, we're on a journey. Today, we call it ChatUPF. Our goal is to really build out ChatACI. And we're constantly looking for use cases in doing this. You know, use cases like, "What happens if we load all of our other product documentation into the model?" Right? Help24 carries probably about 50% of their call volumes are on these kinda how-to questions, right?
What if we take that capability and empower our professional services team to help them during their implementations? What if we open up a customer self-service capability and allow customers to even self-answer their questions and lower the calls into Help24, improving their productivity even further?" Our path towards payments hub is marked with lightning-speed progress. Thanks to our commitment to AI-first engineering, already, we're witnessing a 15%-20% increase in productivity across my engineering teams, right? The teams are actually using AI for both AI-assisted code writing and AI-powered automated testing. We've also developed several innovative and proprietary AI accelerators that achieve astonishing 12-15 times productivity gain when it comes to harvesting existing capability and generating new usable microservices and APIs. That 12-15x isn't a made-up number.
That's an actual, real number we've experienced when we've actually taken C++ code, harvested it, and created new Java microservices, right? In addition, we've proven interoperability. I spoke about our proprietary messaging gateway. We've actually used that gateway to create interoperability between our COBOL product CMS and new Java APIs. We've embraced modern development practices, eliminated unnecessary toil for our engineering teams. By leveraging DevOps and AI Ops practices, we've achieved seamless collaboration and rapid deployment. While AI does offer immense productivity, you know, it's not perfect yet. It definitely is not 100% on quality or accuracy. So we do have a method of humans in the loop, right? We add human expertise to elevate that accuracy and quality from 70% or 80% to a flawless 100%.
Now, when we talk to industry experts, some of them in the room, I'm really energized to see even our early days' metrics of 12-15x on extraction and harvesting capability and 70%-80% quality and accuracy metrics on AI-first engineering. We're actually ahead of the curve on this, right, compared to industry marks. So super thrilled about that. With that said, speed and productivity are always important, but rest assured, ACI remains at the forefront of responsible and secure AI utilization. ACI has been at the forefront of AI integration, seamlessly incorporating it into our product line over the years. The resulting benefits for both us and our customers are very evident, right? Now, I've already talked about AI, so in the interest of time, I'm not gonna cover the AI-based transformation accelerators again.
Pair programming and this is part of the reason why I like the base slide, right? Our engineers are actually pair programming alongside an AI powered by our GitHub LLM instance. Behind the scenes, this collaboration enables automatic writing of basic functions and provides in-context suggestions to complete lines or whole entire code sections. And then finally, AI as a core capability within ACI's products. By continuing to drive AI-first coding practices across our engineering teams, we drive down the total cost of ownership, and we enhance the appeal of our product suites to customers. While we continue to advance AI integrations with our product lines, it's essential to recognize that human roles remain pivotal. As we look ahead to 2024 and beyond, ACI is committed to accelerating its AI journey across various facets of our business operations. Now, almost there. I've talked a lot about our talent.
You know, we've heard a lot about our, our great products and engineering methods. But we can't do it all alone. So let's talk a little bit about partners. Over the past five decades, almost 50 years, ACI has had has built up its strategic domain knowledge through a series of acquisitions. Many of these acquisitions have also brought along numerous vendor relationships. In 2023, at the end of 2023, we actually were working with 40 technology vendors across our engineering practice. In 2024, we're embarking on a partner strategy. Our goal is to collaborate with partners who can contribute expertise, scale capacity, and provide global coverage across emerging technology trends and practices. Trends like cloud, AI, data science.
But those are all interesting technologies, but we also need partners that can scale with us in doing some more of the uninteresting work, work that's optimal for outsourcing around maintenance or supporting end-of-life products, right? Transitioning more than 40 vendors to approximately 7 strategic partners offers several advantages to both ACI and our customers: advantages around collaboration, communication, consistency, cost savings, and accountability. By cultivating deeper relations with a select group of partners, a number of them in the room, I think four of them, are in the room, we unlock greater potential and synergy for ACI, our employees, and our valued customers. Now, just to recap and close, every day, we see more and more advancements in what AI can do for us and how it will impact all aspects of our lives.
For ACI, our technology transformation will focus on a modern architecture, AI-first engineering, and strategic partnerships. We're committed to delivering a cloud-native, multi-tenant, cost-effective, secure with zero trust, scalable payments hub with a low-risk migration path for existing customers. With an AI-first engineering mindset, we see significant productivity gains and innovative AI accelerators. ACI's modern architecture is designed to run and be hosted anywhere, with high throughput, low latency, and fault tolerance. And finally, ACI's partner strategy aims to consolidate vendors, leading to improved efficiency, cost savings, and better outcomes for both the company and our customers. I'm thrilled to be on this journey with ACI. Thank you for the time. Now, I'll bring up Alessandro Silva, our Chief Revenue Officer, who's gonna share a bit about our sales and client strategy. Alessandro?
Thank you. Great.
Here you go, sir.
Thank you. Good morning. Good morning, everyone. I just would like to start with a quick introduction since I believe I have not met you all. I know we met some of you yesterday and in the previous meetings and over the phone. I've been at ACI for three years. Initially, I joined the company as head of international markets. And my main goal was to boost the international market international markets' expansion, the go-to markets, and basically the growth outside of North America. Succeeding on the challenge allowed me to become ACI's Chief Revenue Officer. What I can say is the past two years have been terrific. I'm from Brazil, but I have been out of my country for more than 10 years now. Time flies.
We had the privilege. I had the privilege with my family to live in places like Miami, Paris, London, and returning to the U.S. in the past 4 years. I do believe that this experience of being a general manager, a P&L owner in different countries, in different geographies was fundamental to, you know, for me to be here today. So thank you. Thank you for having me, and let's get started, please. So here, here are the fundamentals of our success in 2024. I wanna clearly articulate them for you today. We are gonna talk in detail later, but first, we have a great deal of talent based in our 5 regional offices. I'm very 5 regions. I am very proud of it. We are going to discuss it in detail in a few.
Second, very important, we have absolutely great clients, and we have a strong book of renewals this year, that should warrant us a solid growth. More to come on this later. Third, also very important is, and Ron mentioned before, we will be very smart and selective where we put our bets in 2024. We will heavily invest, where we believe, where we know that ACI has the right to win, which is the right combo of strategic geographies, product fit, and opportunity to repeat and continue winning. Lastly, we'll continue investing in transforming our teams. Very important to drive pipeline and greater productivity from the sales teams. All right. So let me start here with our talent and the importance for ACI for being local. We believe our teams across the globe, they are key assets.
We've been heavily investing in our people over the past years, and that we have now a cohesive, seasoned, and strong regional leadership teams, and that they are distributed to what we call five fighting regions. So Latin America, Europe, MEASA, which in our terms, stands for Middle East, Africa, and South Asia, APAC, Asia-Pacific, and, of course, North America. I'm talking about account executives, customer success managers, solution consultants, operating teams, RevOps teams, working on the ground to what I like to say shoulder to shoulder with our clients. And, you know, they help day in and day out power some of their most mission-critical applications. And, either in banking, merchant, or the biller segments, they are right now based in 43 countries, which is a true testimony of our global footprint.
Having the right people with the right skill set and boots-on-the-ground mentality, it is really important for what we do. It's really important to win long term. I believe the combination of clearly central, defined rules, and a crisp global market strategy is very important. But it is also important providing the guardrails in which the regional teams can understand the differences in the regions, the dynamics in their markets, and be successful with that. As a result of that, our retention rate in the banking segment is now over 97%. Once our solutions are implemented, handling client complexity and volume, there's really no reason to change, and it's very hard to change. So we believe I firmly believe that having these strong teams and boots-on-the-ground are very important for us. Okay. I really like this chart.
We are very proud of having an amazing collection of logos and clients in all segments. As I said in the beginning, we have a strong group coming to renew in 2024 from various geographies, especially in the banking and in the merchant segment, which are the segments that I lead. Our clients are an incredible asset for ACI, and now is an opportunity when those events come, to cross-sell and upsell. One important aspect, and an important step, it is to execute what we call the renewal accelerating program so we can, in short, accelerate the deals from later months, and bring them forward. The goal with that is to get them done early, get them done earlier, start focusing on other game-changing initiatives such as Payment Hub, that we heard you heard before from Tom, Abe, and Debbie.
Finally, we have an incredible team in charge of advancing our clients in all segments. Our customer success management teams drive recurring revenue, and we continue growing the business from our existing base. Investing in our people is extremely important for us. I'll be very brief here, and this is, in fact, the slide, the graph that Scott brought during his presentation earlier. The point that I wanna make here and to reinforce it here is our view that the investment in the Payments Hub is super important for ACI. It will support our revenue acceleration. It will support our win rates from new logos in the near future. 2025 is our year one, but the work has started already since last year, and we are working very hard to prepare our teams to continue winning on the Payments Hub side. Okay.
So, we said in the beginning that we will be very smart on where we put our bets in 2024 and beyond, and that we'll primarily sign in new logos where we believe ACI has, like Tom mentioned before, the right to win, right? The good combination of geographies, product fit, and market potential. I just wanna bring this example, which I think is very powerful, where ACI is having a tremendous success with our offering, and it is the real-time payment, especially with central infrastructure or like we like to call that, central hubs. So let's explore for a moment our successful case of real-time central infrastructure in Asia, where our business continues to grow. We have won along the years very important countries where we now power the central hub and the central infrastructure. So Singapore, Malaysia, Thailand, and Indonesia.
But winning the central hub is just the beginning because many banks in all of those countries they need a gateway to connect into the central infrastructure. So historically, this has been a big success for ACI. So we provide such assets to dozens of banks, local banks, or subsidiaries in each of those countries. As you can see in the center, the ASEAN, we are now in this region in the next level where some of the places are interconnected in a regional hub. Here, I'm talking about cross-border instant credits and P2P payments mainly, with participant countries all powered by ACI, from the originating bank to the recipient, using our gateway technology, going through the clearing central entity. That can be a central bank or a nominated entity in the country.
Building on what we did in Asia, we recently won central hubs for countries in MEASA such as Qatar, Kuwait, Oman, and Nepal. Interesting fact is, we just went live with our central infrastructure in Qatar, and you should start seeing volume coming up. And recently, as Tom mentioned, we were awarded by the Colombian Banco de la República, which is equivalent to the country's central bank, the contract to power their newest country central hub initiative. I was in Bogotá three weeks ago to kick this off with the president of the central bank and the other executives, and I'm convinced that we will likely follow the same success from MEASA, from Asia now into Latin America, and we've been already discussing with several other countries in our pipeline. It's been a huge success for us.
Here are just two key productivity metrics, and we are making very good progress on both. So pipeline is lifeline for sales. Pipeline is super important for us, and for all segments, these are reflections of our go-to-market efforts. Here is an example. You can see progress in our license sales pipeline with solid growths in the past two years. And equally important than seeing the growth is the growth is coming from all geographies. So coming from North America, but also coming from the growth markets. Second, in equal importance, the improvements on sales productivity, performance and efficiency, have been the name of the game in our industry, and I'm happy to report steady improvements in our metric on the past two years as well. We've been very efficient.
We delivered our numbers last year, and we did a great deal on improving the productivity with our teams in the ground. Finally, I just wanted to say we are keen to continue investing behind those three key pillars, automation. We've been relentless in embracing full automation in sales. This is one of the things that I've been pushing very hard since I came on board three years ago. So we have everything fully automated on Salesforce.
We do believe in, in automation in a strong way. We have increased our pipeline, our qualified pipeline for all segments, but also the top of the funnel, very important for us. We are advancing in all key productivity and efficiency metrics with the team, especially for our customer success management so we can continue driving recurring revenue. So thanks for staying with me today. I'm going to pass the baton back to Tom for a final key remarks.
All right. So, hopefully, it's come across that this is an exciting time to be associated with ACI. We have great opportunities with our existing client base and with, with new customers. We're uniquely positioned to take advantage of discontinuities in the marketplace that exist right now. We, we've talked about our Payments Hub. We've talked about a low-risk modernization journey for customers, and I, I believe we are the only company that can provide that, that path for customers all around the world. Growth is accelerating. We expect to deliver 7%-9% revenue growth this year. As I've said several times, you don't have to wait. It's happening right now. Our cash flow is very strong. We intend to continue to use the cash in ways that benefit our shareholders.
I think all of that makes it makes ACI a great investment opportunity and a great opportunity for our customers. So I'm gonna ask Scott Behrens to come back up on stage, and we're happy to take any question that you have. As one of my mentors used to tell me, this is the question and response period because there might be some questions you ask that I don't know the answer to, but we absolutely have a response. We have our whole leadership team here. So, when necessary, we'll call on other people to support. Debbie, how did I know?
Yeah.
Please sit in the front row.
Yeah. Sorry. It's supposed to be over here. Thank you very much. Thank you very much for hosting this day today. It was very informative. The growth opportunities we have ahead of us are seemingly the best we've seen in years. So thank you. It's, it's we appreciate you illuminating these. But to me, there was a very interesting subtheme going on here, that I could detect among the whole team, and it's, it's really interesting. It was around the topic of focus. And you said it's not about saying yes to one thing. It's about saying no to the hundreds of really good of good ideas. And so when I hear Debbie and Ron and Scott and Alessandro talk about different aspects and opportunities for growth, I feel like you're not just discussing that with us.
That's your rule sort of for your team. So it would be helpful if you could share how you basically manage this, right? Because there's the shareholders as well, right? We're looking for a return on this cash as well. But I could tell among your teams, they wanna grow really fast too, and you have to make some hard decisions. So if you could illuminate how you actually make those decisions, it would be informative because the opportunities for growth seem, you know, numerous.
Yeah. So thanks for the question. This is, and that's why I use that quote from Steve Jobs 'cause I believe that is correct. You know, there every single day, I get an email or a call or something. Somebody says, "Oh, there's a great opportunity in Swaziland." That's not a joke, actually. Somebody called me. Great opportunity. Probably is. It's not on our list. And so you are looking at the great idea refusal team right here. And I mean, I say that in jest, but it actually kind of isn't because we have laid out very clearly you're right, Steve. It's not just we're not just telling you this. This is the conversation we have every single day. And we have laid out very clearly what we are going to do and what we are not going to do.
When people bring ideas and by the way, I want them to bring ideas because, you know, we need to challenge ourselves and make sure we're doing the right thing. But when they bring an idea and it doesn't fit with what we've decided to do and where we see the big, big opportunities, we don't do it, and we say no. And that's particularly hard. So I'll give you another real example. We've taken investment from certain parts of the company. We've said, "We're going to delay those specific things because there's this huge opportunity in the Payments Hub." We have to do that, of course. We can't do everything at once, as I said. So, I think it was literally the first day after we laid all this out, someone came from an area we had decided to take investment away from, and they said
"Hey, can I have approval to do A, B, and C?" I don't remember what it was specifically, but Scott probably remembers this. I said I mean, this person gets it out, and I said, "No. Next." And it's that clear. I think we've laid it out that clearly that there really is no confusion about what we're doing and what we're not. So I know that's pretty simplistic, Steve, but that's actually the way it is. It's we've tried to be so granular, and it's on the list or it's off the list, but it really hasn't been much of an issue. We had a few people trying, but that's pretty much done now. Scott, did I miss it?
Well, no. I would just add so I think prior to Tom coming on board, the idea was to be all things to all people. I mean, we have three product segments. We have, as Alessandro went through, we have five regions. Even within our product segments, you have multiple product sets. And we were trying to do everything for all regions, for all product sets. And so what we collectively agreed to in the last summer when we went through Tom's long-term strategic plan was to agree by each of our segments what exactly are we gonna focus on, what gives us the biggest return on investment in the near term. And that's how we focused. And we decided as a team to focus on those areas. Everybody. We have buy-in. Everybody.
Everybody. And I'm not gonna lie to you. I'm not saying that the first time we said it, everybody said, "Great. Let's go." It didn't happen like that, right? But we worked through it, and we have the clearest alignment of direction that I've ever seen in any company I've worked with. And that's. We've had some good ones in my career.
I would love to bring my wife's daily spend ideas to you guys and see if you could help out. So the historical argument for targeting large banks has been that ACI software's expensive, but the incremental is very low for these banks. So as you move down market, how does the pricing component need to change to make it palatable at some of those lower transaction levels for banks to get started?
Yeah. I'll let Scott.
Well, ultimately, I'd say if you're talking the tier two on selling them the hub, the likelihood is probably gonna be more of a SaaS arrangement where they'll pay more on a consumption basis. So unlike the bigger banks who buy it as licensed software, and they have to almost their best pricing's gonna be on a guaranteed five-year basis how much they're gonna consume, the mid-tier is likely gonna be more SaaS-based, and they'll just pay by the unit on a consumption basis. Won't have to go through the process of a big installation. Won't have to pay for a big license fee. They will pay for an onboarding, and then they as they consume it, they will pay on a per-transaction basis.
So the cost per transaction will be higher because their volumes are lower, but the incremental investment or the initial investment will be way, way lower.
So just to follow up on that, historically, your software, because you get the incremental dollars down very low for transactions, gives you the ability to scale your payments, versus a processor where it's pay forever on a per-unit basis. How, how is your offering here gonna be different than what the processors are offering from a, a scale of payments perspective?
Well, first of all, we're not a processor. So we're just providing the tools so that these institutions can build their environment the way they want to build it. So we're not trying to compete with a Fiserv or an FIS, for example. That's just not what we do. We provide the tools. We are a software company, and we're gonna stick to that knitting. So at its core, that's quite a different proposal. There will be customers that want someone else to do the whole thing. And those, you know, they will go to a Fiserv, an FIS, a Worldpay, whatever it might be. We, those are our customers too. So we provide infrastructure for processors, for fintechs, for banks. You name it.
But what we're doing, the opportunity here is those customers that haven't been able to make the big investment in infrastructure that historically was required for them to take advantage of our offerings and all the things that Abe talked about and Debbie talked about, we can make that happen now because you and I were talking about this earlier. Some of the tools that didn't really exist, so cloud opportunities, SaaS that can be implemented quite quickly.
We've invested a lot in SaaS and cloud. Those things are there now. We can allow those next tier. And again, these are still very large financial institutions. We are not talking about the corner credit union because that's not our sweet spot customer. But this $50 to $250 billion in assets, banks around the world, they want what we give their larger, their competitors or their counterparts, and we're now able to deliver that in a cost-effective way.
Sure. Can you talk about, again, lots on the Payments Hub today? Can you tell us where we are in terms of that evolution? I, I noted on one slide, you said you have two initial customers. I don't know if you can talk about sort of.
Sure.
Sort of what they're using it for or how to think about it. But.
Yeah.
Just where are we, and, and where do we still need to go?
Yeah. Sure. So, I don't know if it was totally clear, but the example that Alessandro was giving you with ASEAN, the Asia-Pacific region, we've actually sold those two initial customers are in Asia-Pacific. And they are using it very much what we've been describing about the Payments Hub. That's what they have. They are able to handle most types of payments right now through an integrated solution that we have put together for them.
So it's an initial product, and it's been very well received. What we're doing Abe was describing about all the engineering that we're doing. So the next sort of version 1.1 kind of the Payments Hub will be available before the end of 2024. And it will be cloud-native. It will be multi-tenant. It will have those nonfunctional requirements that Abe was talking about. So we have it. We've sold it. It's working well. But the next version will be available this year, and that opens up a whole new set of opportunities for us.
My follow-up would be if your initial target customer existing ACI customers as opposed to the new logo so might be otherwise using some sort of cloud-type feature.
Yeah. So the question just, just in case the people on the video couldn't hear. The question is, is our initial target customer an existing customer of ACI, or is it a new customer? The answer is yes, both. But the existing customers are very interesting because they, so I think Debbie talked about this, but let me, let me for a little context. Banks through my whole career, banks have tended to manage different types of payments very differently. They have a different department for wires, a department for ACH, a department for whatever, every type of payment. And that made a lot of sense when the rules and the regulations and the technologies were very different.
But now, as real-time payments are becoming a real thing, and as the standards for different types of payments are starting to coalesce, that probably isn't the right solution. And that's where our existing customers are, many of them are sitting there saying, "Wait a minute. I've got this volume coming at me like a train. I see a light, but I don't know what it is. It's coming at me. So I know I gotta make sure I can handle that." And there's this new opportunity to get way more efficient and think about wires and real-time payments and this type of payment in more consistent ways. So for existing customers, that's what it is. It tends to be they already have our products. They work really well. They don't lose sleep at night, like I was saying.
They have a tremendous need to modernize the rest of their infrastructure. I can't remember if I said this precisely, but usually, the message I get with a chief information officer at a large bank is, "Hey, ACI software, I'm not worried at all. You can handle the volume. No problem. But the rest, I don't know. And how does it hook together?" So that's the modernization journey. We're a very natural choice for them because they already trust us. They already know that our products work. They're looking for help to do that. So that's on the existing customer side. On a new customer, they have some of the same drivers, but those are gonna tend to be those mid-tier financial institutions.
They have the same worry about modernization, and they haven't been able to take advantage of the ACI capabilities in the past. And so as we walk in and say, "We can help you, we can help you by giving you access very quickly to these products and services," they know them. They already know them. They know BASE24. They know our wires product. They know the products. They've just never been able to take advantage of them. And we say, "We can make that work for you. And we can do it in a cloud way. We can do it in a SaaS in our data center. We can even do it in your data center if you want." So they like that.
And then we say, "And also, we can deliver this in a way through the Payments Hub, which allows you to connect other solutions, say, your core banking solution, to that same hub." So you get some of those same benefits of scale, reliability that you've never been able to get before. So I'm sorry. I don't mean to be flippant about it, but it is. It's, it's both. And they're different the sales process is different, but where you get to is the same.
Hi. Chuck Nabhan from Stephens. First, thank you for hosting this event. This is extremely helpful. I'm gonna switch gears to Bill Pay. You had talked about onboarding your newer clients Speedpay One. i wanted to get your thoughts on the functionality of that platform relative to the other four platforms as well as any potential efficiencies that could be gained, as you migrate more and more clients towards that platform.
Great. I'll ask Ron to chime in in a second, but let me react first. There are certainly efficiencies to gain. You asked about the functionality. The function we've Speedpay One to be at least as functional as the other platforms and a lot easier to maintain. That's really a key thing for us. So there will be efficiencies because naturally, when you're maintaining four distinct platforms that work differently, have different technology architectures, different some of them run in the cloud. Some of them run in data centers. That's inherently inefficient. So that's the main reason or one of the main reasons that we've been pushing so hard on this.
The other thing, in addition to Speedpay One will enable us to add value-add services much more simply for our customers because we're exceptional at moving the money. Really good. Ron said that. We're the best there is at that. And I think he's completely right. We can do better in terms of adding services around that core money movement function. So for different verticals, there are various types of services that they want added.
For example, and Ron may think this is a bad example, so he can pick a different one. But, you know, I ran healthcare companies for 10 years. And, healthcare companies, the big thing is, how do I disperse money to healthcare providers? That was my biggest headache every day. So yes, I had to collect the premiums. We can do that. But nobody's actually figured out how to efficiently disperse. So it's an example of a really high value-add service that we can add. We don't wanna do that across four platforms. That would be really inefficient. So Ron, I don't know. Correct me where I got it wrong.
I think you got 100% there, Tom. So no, you're right. Disbursement is a great example of the microservices that we can add Speedpay One. it's a great use case across all our segments. You think about in higher ed, in government, consumer loans, insurance. There's always a case where you need to send money back to the consumer, whether you're funding a loan or refunding a partial payment. So that's a great example. And you summed it up really well, like the efficiency benefits. It's the math isn't exactly like this, but you do divide every investment dollar in four if you have four platforms that are essentially providing the same service to different sets of customers. So now we're in one modern platform.
It's with agile development, so we have more frequent releases. It's stable. It's scalable. And it's very configurable. So that makes us nimble. It makes us faster for onboarding, for adding new products and services. A word that we don't use anymore is customized, but it's one that comes from our past, where we did meet, you know, the needs of the customer down to every specific. And I'm a father of three daughters, and I like to change the definition.
I think that kids want things. And sometimes, billers or clients want things, and you have to convert that to, "What do you actually need?" 'Cause we're the expert in bill pay. I mean, I say, "We have 3,000 customers, so we do this 3,000 times every day." Our clients do it once. So we bring all that expertise from our 3,000 clients and all our decades of experience to convert that want to what you really need. Now Speedpay One, we can deliver it so much faster.
I'm Jeff Campbell, Seaport. I echo that. Thanks for doing this. This has been great. Can you talk about your sales force, and can you explain how that's organized and whether you feel you have the right incentives in place to drive the growth that you're talking about on the top end? Just elaborate on that a little bit for us.
Yeah. Sure. So, Alessandro gave you those five regions. We organize our sales force and our account management force into those five regions. In that, we have a separate sales force that focuses ACI Speedpay. that's different. It's quite a different customer base, different value proposition. They're very specialized. And even within that, we tend to target the salespeople at the different verticals. So we have people that, for example, grew up in higher education. So they know exactly the customer thinks about value. So that's in the Bill Pay space. Outside of that, we have quite specialized sales resources on the merchant space and then in our banking space but organized geographically. Each market has its own nuances.
We like to have our people, as Alessandro was saying, as close as possible to the customer and understanding what they do. So that's how we organize them. You asked about do we have the right incentives in place? I think we do. We've tweaked. Tweaked might even not be quite strong enough word. We've changed the way that we're incenting our sales force. We're trying to incent more heavily new deals versus renewals. We've always incented new deals more, but we've increased that gap now because renewals are I mean, there's a lot of work in a renewal, but it's a very different kettle of fish from a brand new customer and signing them up. So it's harder work to sign up a new deal. We wanna make sure that our team is paid enough.
So we've increased that gap. The other thing we've done is, we've made that last dollar of commission even more, sorry, that last dollar of sales even more valuable for our salesforce. And so, this is not rocket science at all. This is what I've, you know, I've managed salesforces for a long time. And I've always tried to do this. But the way it's not a linear payout scale. So if you have a quota of, let's say, $1 million, if you sell $999,999, how much commission would you think you'd get? 80%. That's what we do now, 80%. So that last dollar is worth 20% of your target. You know what happens there, right? Salespeople are coin-operated. You put money by the way, salespeople real salespeople love it when I say that, because they are.
You put money in the top, stuff comes out the bottom. What we want is we want every person to fight like hell to meet the entire quota. I do not want salespeople that are satisfied with 99%. They aren't. They've gotta, in order to make their boat payment or their house payment or whatever, they gotta sell that last dollar. That's what we want. So we've changed. I think the answer to your question is generally yes. We'll continue to tweak and improve. But I think we have an incentive program that is working for us. It is driving the behaviors that we want. It is rewarding people that are doing the hardest work and delivering the most value for the company.
Thanks. Trevor Williams from Jefferies. A lot of good stuff today. Thanks, guys. And maybe I'll give one to Scott on the numbers so that in the updated long-term outlook, you're assuming revenue and EBITDA growth roughly in line with each other. Maybe you could just kinda expand on some of the puts and takes within margins from here with all of the new initiatives you guys are working on, just how we think of that kinda flowing through the model. Thanks.
Well, I think our model, whether it's the licensed software business or the SaaS business, has scale. I mean, on your, if we license the software, you build it once. You sell it 100 times. The incremental fulfillment cost for selling it more than once is very little. It's just the sales cost. Our SaaS business has scale. It's more of a utility model in that you have to build into supporting, or you build into the transaction capacity that you have in your physical footprint. But both of them have scale. And it's not going to be impacted by these investments. What we made the conscious decision that we would do is we would reprioritize what we're already spending.
So instead of, like I said, instead of doing 10 things that are half or, you know, halfway done, we're gonna do 3-5 things that we're gonna put 100% into. So as Tom already indicated, we, we've taken money from parts of the business to invest in these three. So we're not going to spend more in order to deliver these initiatives. We're gonna focus and prioritize the money we're already spending. And so ultimately, the EBITDA should grow at or at a higher multiple than our revenue growth.
Yeah. I think it's probably worth saying that the point Scott just made and I said it earlier, we've reallocated investment. It's absolutely true. It's hard to do that. I've had people say to me, "What, why do you not have enough money to invest?" Well, not at all. We have tremendous flexibility. Scott said it earlier. We have all kinds of financial flexibility. The reason that we did it that way was because I am absolutely convinced that we need to focus on that small number of things to make sure we do them really, really well. It's not about availability of money. We got plenty of that. I shouldn't say that that way. Did I really say that? I did say that. I never said to our team.
We will have margin growth. We will have margin expansion.
Yeah.
We'll have a high cash flow conversion.
Right. But we have, yes. So we have a lot of flexibility. We have a lot of flexibility. But we are it, it's all about the focus. And again, it's why I use that Steve Jobs quote 'cause that's the point, right? Stick to the things you are going to be the best at. Do those, you know, in a great way.
Lily Varon, oh, Lily Varon from Forrester. Jumping off of that, that sort of focused topic, can you, you know, cross-sell, upsell has been touched on a few times from product and from sales. When you think about the sort of things that you do best in banking and cross-selling that into the merchant segment, can you double-click on that for me? What are the sort of products that you're thinking about? How is that gonna be supported from the organization? Yeah. So cross-selling what you're sort of expanding the merchant business with some of the products from other pillars.
Well, maybe, maybe I take that. And then I don't know if maybe Debbie even wants to add some thoughts.
Yeah. Debbie, if you're okay.
Well, we talk about cross-sells. I, I don't know if your question is specific to the merchant segment. But if you look at all three of our segments, the banks, the biggest cross-sell opportunity we have is fraud detection and real-time payments. And fraud detection last year grew 35% and real-time payments 25%. And within billers and merchants, the cross the biggest cross-sell opportunity is adding more, more value to the transactions that we already have. So whether it's biller or merchant, it's working with even with third-party partners in getting rev share capability. So it's not as much about investing more to get access to that incremental dollar. It's, it's really taking the capabilities we have and selling more to the existing base. So I don't know if you wanna add it specific to merchant.
Yeah. Sorry. Got it. I've got a few good examples on that. So when you think about and I'll start with biller. You know, Ron touched on this. We have an amazing fraud detection and prevention capability that for many years was just focused in our merchant e-commerce card-not-present space. In this past year, we did the work because we saw a trend in both inappropriate aggregator activity as well as growing digital fraud that was impacting our biller customers in different areas. So not only did we easily and rapidly enable our fraud solution to work in the biller space, but we've been able to turn it on, actually put it in a proof mode, and then cross-sell that into the biller space. That's a good example.
Another thing that we've seen a lot is in our merchant space, particularly with our traditional in-store customers that have our independent payment orchestration solution that had more of an omnichannel focus, the growth in their let's call it digital transaction adoption has exploded. So we have multiple grocers that we work with, particularly in North America, in the UK. You heard from Auchan, from France. And the growth rates by cross-selling our e-commerce capabilities jointly with our fraud for card-not-present is showing up that now some of our highest transacting customers for global e-commerce are actually omnicommerce grocers because they've seen the shift to digital transactions. The fraud is a great cross-sell business case that transcends our segments. The other thing that we're seeing is the opportunities for real-time payments in merchants, for example.
So we've enabled both in Europe and in North America, capabilities for request-to-pay, to function for merchants. And, you know, while it's still early days, we really do expect that the expansion and the use of FedNow The Clearing House in the US, enabling merchants to be able to accept it, that's gonna be one of those cross-pollination areas that we're gonna see between some of the banking capabilities that we're enabling and then what a merchant might wanna do, particularly to help them reduce, you know, some of the cost of interchange but also to support consumer preferences around real-time account-to-account payments. But those are some examples.
The only thing I'd add to that is when we look at our long-term modeling in terms of our long-term targets, 70% of that growth is going to come from the existing base of business that we have today on the products we already have. So transaction growth, selling more capacity, price increases on renewals. Very small percentage of it is gonna come from either cross-selling new products or selling to net new logos. Only about 30% of our revenue comes from cross-selling new products and to net new logos.
You're supposed to be over here. They told us that.
I crossed the line.
If we're not blinded by that light, we're not in the right spot. Just keep him honest.
A question, maybe two. The first one related to the selling and the incentives. A lot of what happens with these new products, as I understand them, is a bank is reluctant to do them sort of midstream. So they wait till the renewal period. And then you were talking about renewal acceleration. So how do you make sure the sales force? What's the incentive that the sales force, going back a long time ago, doesn't renew that existing base at less than ideal economics in order to get the incremental new product sale?
Yep.
And then the second part of this is we've heard integrated payments, rebuilding the tech stack before from ACI. I guess what's different now? And you know, what are your customers seeing or saying about this latest effort versus universal payments platform and the like in the past?
Yeah. So there's a bunch of questions there. But, let me take the last one. So actually, George Sutton and I were talking about this on a break. The main difference to me is that the tools that allow banks to take advantage of what we're talking about are there now. Whereas in the past, they often were not. So for example, in the past, ACI didn't actually have a robust SaaS capability. We do. We've implemented it for many clients. We were able to run it very, very efficiently. Cloud. Things have happened lots of things have happened with cloud. It's now, you know, I think pretty readily accepted as this is something that is not only acceptable but almost required going forward.
Whereas if you go back, you know, not very long, this was a very rare thing for one of our customers to think about. And then I think the last thing has to do with, again, the real-time payments train that's coming at them. Because I think there's been a general feeling by very large financial institutions, "Hey, we're really big. We've made all these investments in our data centers and our infrastructure. We're good. It's no problem. You know, we don't have volume problems.
We can handle the scale we need to." And now, I mean, I've had some really direct, transparent conversations with CIOs of very large financial institutions where they say I mean, they don't use this word, but what comes across to me is, "I'm terrified because I don't think my infrastructure is going to be able to stand up to this huge amount of new volume that's coming." You put all that together, there's now a real driver of a need to change. That's the real-time payments volume coming. Number two, the technologies that are now available were not in the past. And then number three, you've got, I think it's AI. I mean, I know they say AI about everything, right?
But it's true because every CEO that has a CIO reporting to them, they're reading the newspaper every day, and they're saying, "AI makes everything easy." So now these CIOs are saying, "How do I do that?" So all of those things, all of those discontinuities are coming together all at once. And it's creating this very significant opportunity which I think ACI is perfectly positioned to take advantage of. And that's, that's what we've been trying to talk about today and show you how we're attacking that opportunity.
That was yeah. I think on your other question, when Alessandro was talking about accelerating renewals, it's saying, "Let's not split the renewals in 2024 that are gonna happen. Let's not wait until Q3 and Q4 to get them done. Let's get them done in the first half. So then the second half, we're selling net new. That'll drive more growth in 2025 and 2026." And in terms of the incentive on the Salesforce, like I said, two-thirds of our incremental dollar of sales over plan is coming from those renewal events.
So that is actually the biggest opportunity our sales folks have to deliver on their net new revenue is that sales event. So I don't see that impacting any, you know, disadvantaging ACI in terms of the economics. What we're trying to do is just get what we know is gonna renew, get it done early so we can focus on selling net new logos, cross-selling net new products that'll drive growth in 2025 and 2026.
And just one more point. When we have a renewal event, there is no option for a salesperson to say, "Oh, you know, we look at the CPI," for example, and say, "Okay. That license should be increasing 27%." I'm making it up. But so that's what it has to be. They don't have the option of saying, "You know what? We'll just do it for 10%, and we'll also do this other product." That's not how it works. We don't allow that. There's the fundamental license, which is sort of the core of that customer relationship. We get what we believe we are due on that increase of license and capacity. Capacity's relatively easy to calculate. And then additional products sell on top of that. It's not a, you know, we don't give away the economics on the renewal to get other things. We just don't allow that.
First of all, coming from Asia, I'm glad to hear the focus that you have on Asia. Now, my question is a bit of strategic question where if I look at the five regions where ACI is working on, then I can see five different trends because the regions are moving at different paces in the payment space, right? Like if you take Asia, the whole CBDC work is coming up from Asia. Now, my question to you is, when do you decide that you gotta keep a common core versus keeping a regional focus? And when do you decide that a particular regional development has gone from a hobby to a mainstream business?
Yeah. So, first of all, our intention is to have common core. That's what we want. We are building them in ways that make them highly configurable so that we can deal with differences in regulation, in payment schemes, and so forth. So we, we're building that in. But what we really, really wanna avoid is having a core application for India, another different core application for the United States, a different one, a different one, a different one. We don't want that. And we don't believe we have to have that at all because there are differences, certainly. And there are different paces. Real-time payments is a great example. India is by far the largest real-time payments market in the world. Brazil or China, depending on whose numbers you believe, is number two, and the other one's number three.
So they're clearly way ahead in terms of volumes of other parts of the world. But the way it's being implemented isn't all that different in the different places. So FedNow, I'm certainly not saying it's exactly like Pix. It's not. Pix is Brazil. But there it's quite similar. And the way we're building our products, we can handle those differences. We do not have to have separate cores. So now, then you were talking about going from a hobby. I like that. From a hobby to something, whatever you said. I love that idea. We see that all the time. And actually, again, real-time payments is a good example of that.
Because of the position that we've taken in real-time payments where we are powering all of these schemes around the world and all of these central infrastructures, we're able to help share the knowledge across. Because of the way we're building it, highly configurable, we haven't found a situation where we needed a different core. And by the way, we probably wouldn't unless it was a huge opportunity. We probably wouldn't chase after a geography, for example, that needed a separate core. It wouldn't make sense. The economics would be quite different from what we're looking for.
Bumping up against lunch. I know you don't wanna do that. Do you have other final?
You're right. Maybe one more? We started with well .
Can you talk about the evolution of the bank selling process in terms of I know you've changed your Salesforce, but who's actually making decisions in the organizations given all of the changes and how your organization has adapted to that to make sure you're in front of the right decision maker?
Sure. So, I think, Gene, you're talking about inside the customer.
Yeah.
Yeah. And it has changed to an extent. But we have to deal with multiple constituencies. So we've got the technology organizations are always involved. But in most cases, I tend to find that the ultimate decision maker is the business leader because they're the one where the value ends up showing up. Debbie talked about. I think she was alluding to wires. But just think about this. We process, I think, a billion wires a day. And those billion wires if you think about what the bank charges for those wires one of our very large customers charges $80 per wire for international wire. $80. And they process millions of them a day. So you've got massive impact on revenue. Who cares about that? I mean, the CIO cares to make sure it works.
The person that's responsible for that fee income really cares. So they wanna, so where I'm going with that is we have to deal with the technology organization and make them very comfortable with what we're able to deliver, the scalability, the reliability, the future-proofing. We have to make sure that the business leaders understand the value that they can get from working with us. The last thing I'll say is I said a couple of times that customers don't lose sleep at night because they do business with ACI.
I mean, customers tell me this all the time because we have, at end of year, one customer at year-end handled $800 billion in on the last day of the year in debit transactions and $1 trillion of wires in one day and didn't miss a beat. And so the technology guys really care. The business people are I, I don't even worry because my customers are gonna get that you know, that money's gonna move like it's supposed to move. And that so, so it's a long answer to your question. But I don't think it's changed all that much, honestly, because I've been selling to banks for a long, long time.
And it's always been that way. I think you're starting to get more, probably more interaction from the technology organization as these things go through because of this AI dynamic. And CEOs are saying, "Well, I know AI's really important, but I don't really understand it. So I'm gonna turn to my, my technology guy." But I, I don't think it's fundamentally different. Thank you. So, we're gonna break for lunch. And I think lunch is downstairs, right? Lunch is downstairs. We'll be back here at 1:15 P.M. for the afternoon session. Thanks for your attention.