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Industry roundup: 26 April

Saudi Payments launches instant payments system with IBM and Mastercard

Saudi Payments, under the supervision of the Saudi Central Bank (SAMA) has announced the launch of Saudi Arabia's instant payments system 'sarie' in cooperation with IBM and Mastercard. This collaboration is aligned with Saudi Payments' aim to improve the Kingdom's financial ecosystem, mainly through the adoption of faster payments and improvements to banking reconciliation. Today, 'sarie' supports all Saudi banks across the Kingdom and is available for use by their customers. 

The introduction of 'sarie' is in line with Saudi Arabia's Financial Sector Development Program (FSDP) under Saudi Vision 2030, which targets achieving 70% non-cash transactions by 2030.

The new system allows bank customers to send and receive money in real-time using a wider range of services and transfer options. Customers of local banks can make instant transactions of up to SAR 20,000 (US$5,300) through the system. Further, "sarie" users can benefit from the quick transfer service to send up to SAR 2,500 (US$660) using aliases, such as mobile number, email address, ID number, or IBAN number.

"The instant payments system 'sarie' can enable us to drive usage and engagement across the Saudi payments ecosystem of banks and businesses," said Fahad Al-Akeel, managing director at Saudi Payments. "It can help lay the foundation for new payments business initiatives, encouraging financial inclusion and banking reconciliation of Saudi banks. We welcome this momentous collaboration with IBM and Mastercard. It is a huge step forward that aligns with our ongoing smart solutions and payments modernisation strategy, aimed towards achieving the assigned goals in vision 2030."

Saudi Payments selected IBM Global Business Services (GBS), the services and consultancy arm of IBM, to lead the project as the system integrator partner. IBM GBS designed and architected the solution through its complex system integration methodology, built a technical platform and integrated Mastercard's instant payments platform into Saudi Payments' existing infrastructure while connecting it to the IT systems of locally operating banks. 

Mastercard's real-time payment technology was selected for the rollout by Saudi Payments. It is part of the tech company's broader multi-rail strategy to lead payment innovation in the MEA region across all digital payment rails, enabling organisations and individuals to send and receive money how, where, and when they choose, across both card and account-to-account payments rails. 


New RT1 specifications aim to help users benefit from future TIPS set-up

EBA Clearing has announced that it has issued user specifications for new functionality that will help its RT1 participants manage instant payment flows across the RT1 and TIPS payment systems. RT1 users will be able to leverage their existing set-up with the improved Instructing Party Functionality in order to meet the upcoming reach requirements for the Eurosystem’s TIPS platform and to optimally reap the opportunities the two pan-European infrastructures offer.

"The future TIPS set-up will offer consolidated liquidity management opportunities," said Erwin Kulk, head of Service Development and Management at EBA Clearing. "Users of the enhanced Instructing Party Functionality benefit from a single interface for their transaction flows and concentrate liquidity for their payments settling in RT1 and TIPS in a single place. This will simplify their daily handling of instant payments and related internal network and system arrangements, and allow them to optimally leverage their infrastructure investments."

From late 2021, payment service providers (PSPs) adhering to the SEPA Instant Credit Transfer (SCT Inst) Scheme of the European Payments Council must be reachable via TIPS for SCT Inst transactions. They will also need to make sure that they can fund and defund through TIPS the positions they hold in the different Clearing and settlement mechanisms they participate in.

Users of EBA Clearing’s pan-European instant payment system, RT1, will be able to rely on its enhanced Instructing Party Functionality to satisfy both requirements. The Instructing Party Functionality has been in place since 2018, when TIPS went live. It allows PSPs that are connected to both systems to use RT1 for sending and receiving SCT Inst transactions to and from TIPS. 

As part of the changes to be introduced by the Eurosystem in December 2021, the technical account for RT1 settlement, which is operated in TARGET2, will migrate to TIPS. This change will make the RT1 technical account accessible for participants 24/7, which will further facilitate their liquidity management.

RT1 offers payment service providers in the Single Euro Payments Area a state-of-the-art, real-time payment processing facility operating around the clock on any day of the year for payments in line with the SCT Inst Scheme of the European Payments Council (EPC). Currently, over 1 million payments are settled in RT1 -- in real-time and with immediate finality, in around one second, across all corners of Europe. RT1 is open to any account-servicing payment service provider (AS-PSP) adhering to the EPC SCT Inst Scheme. A variety of options to interact with the system allow any type of EPC SCT Inst Scheme adherent to access the RT1 infrastructure in the way that best suits their needs.


GRI backs mandatory EU reporting on sustainability impacts

GRI has welcomed that the European Commission is maintaining its ambition to achieve progress in corporate transparency on sustainability impacts, following publication of the proposed new Corporate Sustainability Reporting Directive (CSRD).

The CSRD would have a significantly extended scope than the current Non-Financial Reporting Directive, applying to all large or listed companies operating in the EU. With a stated aim of bringing sustainability reporting on a par with financial reporting, it would help ensure both have equal weight and rigour.

Notable components of the CSRD include: 

New EU sustainability reporting standards will be developed through a multi-stakeholder and transparent process led by EFRAG, taking account of the GRI Standards and other existing reporting frameworks.

Explicit adoption of ‘double materiality’ - requiring public reporting on both sustainability factors affecting the company (financial materiality) and how the company impacts on society and the environment (outward materiality).

Reporting will be mandatory, with sustainability and financial information given ‘comparable status’, and a requirement for reported information to be audited and assured.


FIS expands domestic acquiring to South Africa, Nigeria and Malaysia

FIS has announced it is expanding its payment processing capabilities into the rapidly growing markets of Malaysia, South Africa and Nigeria. The firm has secured a domestic acquiring license in Malaysia to provide its Worldpay payment processing platform. In South Africa and Nigeria, FIS is offering domestic payment processing services through its previously announced agreement with payments technology company Flutterwave, a 2016 graduate of the FIS Accelerator programme.

Through its Worldpay product portfolio, FIS processes billions of transactions annually across 146 countries and more than 300 payments types in 126 currencies. As part of its growth strategy, FIS aims to enhance its merchant acquiring presence in additional markets - enabling the company to offer its payment services to local companies with global ambitions as well as rapidly growing enterprises looking to expand in these regions.

"The COVID-19 pandemic has accelerated the adoption of digital technology and fuelled the growth of e-commerce around the world," said Jim Johnson, head of Merchant Solutions at FIS. "Emerging markets across Southeast Asia and Africa present fresh opportunities for global businesses. These new markets are also home to a new generation of ambitious high-growth regional brands looking to expand their footprint. Our goal at FIS is to be a true partner to these enterprises, passporting them to success wherever in world they want to be."

The recently published 2021 Global Payments Report by Worldpay from FIS projected that Malaysia’s eCommerce market will increase 71% by 2024, driven by mobile shopping. Over the same period in Nigeria, online commerce via mobile devices is projected to more than double. In South Africa, the e-commerce industry is projected to be worth US$9bn by 2024 with mobile accounting for a third of the spend.

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