07 February 2018
Building the future of payments during the ECB’s TIPSapp Challenge
“Instant Payment is faster than the security check-in at the ECB”, those were the opening words of Marc Bayle de Jessé of the European Central Bank himself. But a lot of people made it to Frankfurt on February 6 2018 to see sixteen companies present their instant payment solutions and to engage in the interesting discussion panels during the TIPSapp Challenge, organized by the European Central Bank.
The challenge each of the companies had to face was not the time span of five or ten seconds as in instant payments, but they had only five minutes on stage to present their solutions to the audience. All of them managed the task very successfully. The interested listeners got to see a variety of solutions from all over Europe.
Osmosis presented the currently launched solution Yuomi for the Belgium market. The Dutch Payments Association showed iDEAL, the most successful online payment method in the Netherlands. GexPay demonstrated what their pilot solution for Slovakia looked like. Blue Code stated their token-based approach, which is accepted in the pilot market Austria by 85 percent of all food retailers at the moment. And Mark Munne from equensWorldline went up on stage presenting not only one, but four use cases for P2P, P2B and B2B instant payments (click here to download the presentation) – the latter creating happy CFOs in business as the automated cash management triggers Instant Payments and thus instantly and continuously optimizes their liquidity management.
ACI Worldwide, GCP Software, G+D Mobile Security, GS1 Germany, Ingenico, Paymentgroup International, PPI AG, Quali-Sign Ltd. SIA, netcetera and Vocalink presented solutions as well. Throughout all of these pitches it became clear, that the usability for the customer plays a crucial role in developing a solution. An argument that was brought up again several times later during the panel discussions during the day.
Lively discussions: Interoperability became buzzword of the day
The first panel discussion talked about the question whether instant payment users were ready to engage. Jean Allix from the European Consumer Organisation saw no reason to worry about this point, because consumers would use instant payments as everything is instant today except payment. Pascal Spittler from IKEA Group mentioned that customers were looking for ease and convenience in online and offline shopping. So, in order for users to engage, they need a simple, but secure system offering them all desired services. That was one conclusion of this session. In addition, it was agreed that with a lack of interoperability, this will never work.
In a short and entertaining presentation, Javier Santamaria from the European Payments Council indicated that it requires innovation and strategy to get everybody on board for future payments. With a comparison to the movie “Blade Runner”, where in 1982 no one anticipated mobile phones in 2013, it became clear that nobody can foresee the future and thus cannot know how the payment world will develop.
Henrik Bergman from the Swedish Banker’s Association and Paul Walwik-Joynt from Nets revealed in their interview session how instant payments were brought to the markets in Sweden and Denmark during the last couple of years. Both countries are strongly digitalized and far ahead of most other European countries.
The final discussion of the day focused on the instant payments industry itself and the questions whether it itself was ready to play. Michael Steinbach, CEO of equensWorldline, opened up the discussion saying that it will change dramatically, because processing instant payments requires skills and a huge investment in existing IT infrastructure and operations. So, the financial industry needs to rethink their business and operational models. Once more the participants came to the agreement that interoperability was the key issue. Isabelle Olivier from SWIFT pointed out that interoperability needs to progress for the sake of competitiveness.
But not only people with a microphone could state their opinions. In-between the different panels the host had some questions prepared for the audience to be answered via a smartphone survey. It was interesting to see that more than half of all guests (62%) thought that the uptake of instant payments will need up to five years. Also, a full European reach was seen as the number one key factor to make instant payment a success.
Mehdi Manaa from the ECB closed the event with the lines: “Today we did much more than predicting the future, we built it.”