Instant Payments

EBAday Webinar Review

Instant Payments as a steppingstone in the payments journey.


Theresa Connors – Payments Matter

Sandra Peute – ABN AMRO

Nida Sattar – JPM

Adrian Smyth – NatWest

Paul Thomalla – RBS

Addressing a topic as broad as this was a challenge for anyone, but the panel met it head on and there was a lot of good content.

Theresah moderated and opened the discussion with the observation that the digital economy is growing and that is bringing its own challenges, not least that we need products to service the needs.

The tone of the webinar was to clearly set out that much digital innovation benefits the customer, not necessarily the bank.  An example of this given by Adrian when he talked of Instant Payments allowing customers to send and receive funds quickly but then in driving down fraud the bank have to move towards an instant fraud check.  Not easy.

The panel also accepted that the banks do hold on to legacy systems, such as cheques.  But this is driven by the lack of legislation to allow other forms of payment to be used.  Much legislation especially in the Insurance industry protects the use of cheques.  New innovations need new regulations and new legislation to succeed.

The drive behind digitalisation is made by customers who want access to their money 24/7 and they want payments to be 24/7 too.  This throws up a whole raft of issues when it comes to customer experience which the panel agreed needs to be as simple a possible. There was consensus that the UI needs to be simple and that the ‘plumbing’ needs to take care of the operational aspects.

As Theresa said, when a customer makes a payment, they make a payment, not a SEPA, Faster Payments or CHIPS payment and solutions need to reflect that.  Customers don’t care what we call it, it’s a payment!

Nida stressed that in terms of a global approach EBA Clearing has a role to play in getting the European industry in order and then propagating that to the global market.

Sandra gave a good overview of the Dutch experience with IDEAL and also discussed the Dutch approach to Request to Pay with TIKKIE, although when I looked online at the product it wasn’t clear to me how it was a Request to Pay tool like Ordo and Request to Pay have developed in the UK.

Adrian talked about Request to Pay, that it is another option which needs to be implemented carefully.  He stressed that he saw this as a potential gamechanger.  Direct Debits are very popular with corporations and giving consumers the ability to vary pay dates could have a big impact.  The panel agreed that Request to Pay helps vulnerable customers, but the fear as Paul said was that it might help take the card community out of the game.

Overall, the panel agreed that fraud was a major concern as Instant Payments, require Instant Fraud Detection.  The issue is that in the UK we tend to implement these solutions institutionally and not industry wide.  So different customers will experience different processes.  The panel agreed that the User Experience needs to be different from bank to bank, but the underlying rails need to be simple and commonly available.  But, as Adrian discussed the problem for banks is how to use innovation which doesn’t have a direct revenue stream and therefore keep development costs low.

It was clear that the panel felt that their needs to be more harmonisation across the industry and we should separate out the user from the operation.  Digital innovation is coming from the customer needs now and these need to be met in a way, that benefits all parties.

Digital coes from customer experience and as Nida outlined that experience comes from expectation and needs to be driven by innovation.  Customers, staff, and regulators need to join forces to make digital a reality.

As all good webinars should, this one threw up more questions than answers but it’s clear that the research is in full swing and that a move to instant payments with the help of ISO20022 is definitely on everyone’s radar.

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