29 June 2021
Are instant payments a success story yet?
EBAday 2021 has fully kicked off on Monday, June 28th. With an interesting panel discussion, moderated by Teresa Connors, Managing Director at Payment Matters, four experts from the financial services industry shared their thoughts on instant payments. Because what exactly is the current situation? And even more important: can we call instant payments a success story yet – or is that still too soon?
Speed and services
One of the critical elements of instant payments is speed, as underlined by Gerhard Bystricky, Head of Product Development Payments Germany at UniCredit. As customers and clients are embracing the benefits of instant payments, many processes are necessary to support these transactions. “We have to consider the complete end-to-end chain,” said Bystricky. “Only if this chain is running in a smooth manner, then all stakeholders can benefit from that system.”
The competitiveness, brought along by instant payments, however, is not related to the isolated instant payment, but to the services that can be built upon them. Michael Steinbach, CEO of equensWorldline, even takes it one step further: “It is very important to look at what other actions are possible based on the instant information being exchanged. That makes a service more competitive so that all customers can benefit from it.”
As the panel agrees on this idea, Erwin Kulk, Head of Service Development and Management at EBA Clearing adds on to that perspective. He also signals that financial institutions are increasingly looking for those extra services that can add value. “Their digital transformations are well underway. To support these changes, and maintain their growth, they are therefore looking for additional services such as anomaly scanning and cybersecurity.”
Bringing additional value-added services and fighting barriers
What is then needed to spur the adoption of instant payments in Europe? With a poll, the audience had a chance to share their thoughts. More than half of all attendees, a whopping 58 percent, agreed that offering value-added complementary services, on top of instant payments, would further spur the adoption. For 33 percent of the attendees, regulation mandating adoption is seen as the best strategy.
The term ‘the new normal’ has been coined relentlessly over the past year. Hence, is it possible to call instant payments a part of that new normal? According to Bystricky, instant payments still got a long way to go in Europe with enough obstacles along the road. “For instance, the threshold for instant payments still lies around 100K in many countries, but not all of them, which makes it less attractive for corporates.” At the same time, our expectations as customers come into play. “They are telling us how they want to pay. Otherwise, they will go elsewhere”, he explained.
Instant payments are therefore an opportunity that banks and financial institutions should not miss out on, as the panel agrees. Craig Ramsey, Head of Real-time Payments and Banking at ACI Worldwide tries to further elaborate on that idea. “We have laid out the tracks in Europe, but others will occupy this space when banks don’t step in on time. We have to look beyond the pure payment.” So then again, the value-added services will make a difference for every stakeholder, from the financial service to the end customer.
Connors closes the forty-minute panel discussion with the conclusion that the success story is indeed prevalent. Even though it might be too soon to make such claims, there are local success stories available. But instant payments, in the whole of Europe, can even be a bigger success story by collaborating towards a common goal.