29 January 2016
Payments 2016: Where next?
There is a global move towards immediate payments, but that is only part of the story, as Financial IT learned in its interview with Kris Kubiena, VocaLink’s Proposition Delivery Director, at Sibos 2015.
Kris, tell us about VocaLink.
VocaLink is an interesting company: it is part of the UK’s critical national infrastructure and is the provider of the Faster Payments Service (which has securely processed over 4 billion payments since its launch in 2008), the UK ATM service and the ACH. Outside the UK, we are a provider of international payment solutions and, in particular, real-time payment solutions. The combination of operations experience and solution delivery means we can provide assistance to our clients based on real-world experience.
I think people do not realise just how much VocaLink underpins the new initiatives that are being released.
We are the silent partner behind many of these new innovations; VocaLink provides the technology for platforms to build upon. We understand the complexity the delivery and operation of national payment infrastructures and we aim to partner with and support in country stakeholders in the delivery and operation of these services.
What are the industry trends that have led to the use of these solutions?
Instant payments seem to be a widely-discussed topic; however, it is no longer only about instant payments, as they have become the norm. Discussions now centre on instant payments combined with as e-commerce and m-commerce and alternative payments in general. We are now talking about solutions that help financial institutions to provide impactful products and services to corporates merchants and consumers. For example Thailand is in the process of implementing a service that enables payments to be made using a national ID and we expect this to be real-time
Is it fair to say that you’re merging the old with the new and being more innovative with the infrastructure you’re providing, and can you give us more information?
Rather than merging the old with the new, I think it is instead the new with the new. In the UK VocaLink launched the Faster Payments Service in 2008 and at the time it was considered to be a significant step forward in payments capability. However Singapore has implemented our new Immediate Payments Solution and their FAST service is functionally richer than Faster Payments in the UK. Consequently we have found ourselves working on enhancing our UK propositions based on our international solutions.
Whilst we’re really proud of the technology we have, something that differentiates us is our experience as an operator. While technology is king –it is not just about the technology. There also needs to be an understanding of how to operate it. Instant Payments services need to be available 24 hours a day, 7 days a week, 365 days a year. Delivering truly excellent service is always based on a combination of technology and proven operating procedures and processes, and our ability to combine operational experience with leading edge technology is one of the key things we bring to our relationships in this industry.
As a leader in the payments industry, what do you see going forward?
I think the next exciting development in the payments industry will be cross-border interoperability. VocaLink has recently announced a deal with The Clearing House to bring real-time payments to the U.S. and Europe is now looking very hard at implementing real-time services. I believe that the next step will be to interoperate in real-time: if a consumer can make cross-border, instant payments using their mobile device – or any other device in fact – that is going to be a very exciting innovation. This development should have a dramatic impact on the way in which international business is carried out, as well as providing the global economy with a growth dividend.
VocaLink’s solutions underpin individual countries – will the next step be getting those countries to speak together?
The next step is to enable individual countries’ solutions to speak together. The ASEAN (Association of Southeast Asian Nations) countries have an ambition to become interoperable throughout the region and VocaLink is delighted to be involved in some of those discussions. In Europe, although a single payments area exists, the individual countries have their own real-time payment systems which will have to interoperate cross-borders and will be a very interesting development.
Finally, the new national real-time system in the U.S. brings the world’s largest payments market into the mix, and is a huge step towards building a global, ubiquitous real-time payment solution.