26 October 2015
Instant Payments in Europe
There are many instant or faster payment initiatives underway around the world. Few would challenge the rationale for shorter payment clearing times and there is a wealth of evidence to support real-time technology as the ideal platform for innovation. All credible cash replacement instruments, such as mobile payments, require immediate payment.
Most industry professionals agree that the deployment of instant payments in Europe is a major opportunity for European banks and the wider economy. All agree that the time is right to do this. However, there is less agreement about how the European banking industry should develop instant payments. There are a number of options to choose from, each with its own advantages and drawbacks.
Although Europe comprises many different countries and cultures, a lot can be learnt from the UK’s experience. The success of the Faster Payments Service demanded the full commitment of the UK banking industry and the move from a three-day clearing cycle to 24x7 operation involved a lot more than software. Business processes had to be re-engineered and procedures remodelled to support a payments system that is always available.
The UK Faster Payments model has already been exported successfully. Last year, Singapore implemented Fast And Secure Transactions (FAST) on VocaLink’s Immediate Payments platform. That solution is in effect the next generation of Faster Payments, incorporating the ISO 20022 message standard. New functionality, including push credits, enabled Singapore to surpass the leading standard established by Faster Payments in 2008. Such leapfrogging is inevitable and desirable as the benefits pass on to those who matter most – customers.
This paper offers a snapshot of current mainstream thinking around deployment options for instant payments in Europe and insight into the core of the UK payments industry. It acknowledges instant payments as the next stage of SEPA and recognises that success requires collaboration on an unprecedented scale. A lack of collaboration will inevitably lead to fragmentation, which could undermine the SEPA vision.
Click here to download the Whitepaper