Instant Payments: Echoes from sibos
Following José Beltran's Community Session at Sibos Geneva, Vocalink echoed STET viewpoint considering Instant Payments as a solution towards a "cashless cash".
"Jose Beltran from [...] processor STET, presented a discussion on instant payments entitled ‘The Impact of the New Normal’. In this session, the discussion focused on the emergence of instant payments and how it could revolutionise how we make payments, as well as the technical details and challenges for STET in developing its own instant payments solution which they aim to launch next year.
From a market assessment of Instant Payments, there was plenty to agree with Jose on here. Instant Payments is being driven by a combination of regulatory demands to deliver efficiency and innovation in payments, expected payment innovations and competition brought about by PSD2, market demand in the shape of highly connected consumers who expect immediacy in their services, and technology advances that have made instant payments possible on a mass scale.
Highlighting Faster Payments in the UK and other systems around the world, Jose pointed out that instant payment solutions have not cannibalised existing credit and debit transfer payments but instead created new areas of growth. He also pointed out that as a 24-7 payments system, data shows that 50 per cent of Faster Payments transactions occur outside the operating hours of other clearing cycles, emphasising the importance of constant availability for the service.
Instant Payments are an enabler to develop new user cases, including new ways to pay merchants, P2P and other cash alternatives, and cross-border payments. Different business models have the potential to be a win-win for both business and consumers. Importantly, new instant payment services will keep the banks at the heart of the payments service. This is something that Pay by Bank app in the UK, which uses the Faster Payments rails, has also been keen to emphasise.
One of the advantages of instant payments is that it creates new and simple means by which people can exchange money with each other. Instant payments is, as Jose put it, cashless cash. What he means is that instant payments has the same key advantage that cash has over other payment types: the ability to immediately transfer value to another person. This creates certainty and removes the need for trust."
Source: http://connect.vocalink.com/2016/september/review-from-sibos-day-1/
