Progress towards instant payments gathered pace around the world in 2017, with around four national systems introduced last year in Europe, Australia and the US, adding to the immediate payment systems already operating in China, India and the UK. So how will this market develop in the coming years? ACI Worldwide's Barry Kislingbury picks out some of the trends we can expect to see in the rest of 2018 and beyond.
1. More countries adopt real-time payments
So far we've only seen the start of the instant payments 'revolution'. According to Kislingbury, the coming two years will see the introduction of another Europe-wide scheme, adoption of schemes by several European nations, as well as implementations by five non-EU countries. The expected system implementations are as follow:
- 2018: Pan European ECB TIPS, Belgium, Slovenia, Spain, Portugal, DR Congo, Hong Kong and Malaysia;
- 2019: France, the Netherlands, Hungary and possibly Colombia and Peru.
2. Innovation, new products and new players
Instant payments will bring innovation and new players to the market, predicts Kislingbury. He notes that mobile payments, POS, e-invoicing and e-commerce are all areas that will be affected by instant payments and this provides an opportunity for new entrants to the market who will compete with banks.
3. Request to pay
Request to pay is due to launch in the UK and the EU in 2019, while a similar scheme was launched in the US last year. Request to pay, or real-time direct debit, uses instant payments to give billers and consumers more flexibility and control over their regular payments. Kislingbury writes: “We believe that ‘Request to Pay’ has the potential to revolutionize payments, helping millions of consumers and billers to better manage their payments, as well as enabling fintechs and retailers to offer innovative new ways to purchase goods and services.”
4. Instant cross-border
Instant cross-border payments is the next logical step in the journey towards real-time global payments. One already exists – SEPA Inst – but it is for one currency only. We're likely to see the world's first multi-currency real-time payments system in Asia some time in the near future, as discussions are under way between Malaysia's Paynet, Thailand and Singapore, under the umbrella of the ASEAN Payments Network.
5. Wider uptake of ISO 20022
Wider adoption and use of real-time payments means that more banks and payment service providers will be processing payment data using the global ISO standard, enabling a more efficient and transparent way of managing data. Kislingbury writes that banks will be able to “analyse data to create tailored solutions for larger corporate customers.” He adds: “We are seeing more schemes being built with ISO 20022; this in turn will further accelerate the trend away from legacy infrastructure, more integrated 24x7 systems, and new ways to monetize data.”
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