The instant payment year in review and numbers
Geese are getting fat, lords-a-leaping and partridges living in pear trees – if you believe the old English carol – which must mean the end of the year is nigh, says Neil Ainger. InstaPay looks back at the news, big stories and numbers in 2017.
As 2017 draws to a close it is natural to think about the most significant technological, regulatory and market changes over the past year in the world of instant payments (IP), such as the advent of the single euro payments area (SEPA) instant credit transfer (SCT Inst) scheme in Europe on 21 November or The Clearing House (TCH) real-time payment (RTP) platform in the US the week before.
In no particular order, here are some of the news stories, numbers and events that caught the eye of the InstaPay editorial team during 2017:
- $3.50 – This was the amount moved between BNY Mellon and US Bank when The Clearing House (TCH) launched its US real-time payments (RTP) system testing late in the evening of 13 November 2017. $3.50 was moved between the two different banks in three seconds, marking the start of the rollout of the first new payment and clearing infrastructure in the US for more than 40 years. Further transactions have since been rolled out involving Citi, J.P. Morgan, PNC and SunTrust, with more joining the early adopters next year. Ubiquity is envisaged for 2020.
- 585 – This was the number of payment service providers (PSPs), 15% of the total in Europe, that were offering instant euro payment services on 21 November when the single euro payments area (SEPA) instant credit transfer (SCT Inst) scheme launched. Again, majority uptake is not envisaged until 2020 according to the scheme designers, the European Payments Council (EPC), who kindly wrote a launch blog for InstaPay. Société Générale discussed the bank migration challenges and opportunities in a separate blog. The SCT Inst scheme parameters are less than 10 seconds for delivery of instant payments on a constant 24×7 basis up to an initial maximum of EUR15,000 across the 34 nations in the SEPA.
- Nine – The number of clearing and settlement mechanisms (CSMs) that self-declared their adherence to the voluntary SCT Inst scheme across eight countries on its launch. More PSPs, CSMs and countries are expected to join as the migration continues next year.
- 0.20 – The number in euro cents EUR0.20 that will be charged as the maximum price to use the European Central Bank’s (ECB) Target Instant Payment Settlement (TIPS) platform when it launches in November 2018 as a potential alternative to EBA Clearing’s RT1 pan-European SCT Inst-compliant CSM. According to Mehdi Manaa, head of market infrastructure, development, ECB, speaking at the Sibos 2017 show extensively covered by InstaPay he “hopes to go below this price” if the platform captures enough volume in the European payment marketplace.
- 30% – The approximate percentage number of all euro payments that German banks process. As such, the on-going German migration to SCT Inst will have a major impact on the success or otherwise of the scheme.
- 48 – The number of countries in the InstaPay Tracker that are currently listed as having a live instant payment (IP) scheme or plans for one. An imminent new addition to the list is Australia’s new payment platform (NPP) due in Q1 2018. Hungary will have a new system in 2019. InstaPay will continue to monitor the development of IP schemes around the world.
- £6.4 trillion – This is the amount in trillions of British Pounds that the New Payment System Operator (NPSO) in the UK, which consolidates Bacs, the Faster Payments Service (FPS) and Image Clearing System (ICS) into one retail payment body, processes every year. It has taken over responsibility to deliver the UK’s New Payments Architecture (NPA) which will involve a technology overhaul for the once pioneering FPS that lacks the now standard ISO20022 XML messaging and isn’t as fast or secure as some newer IP schemes around the world.
- Two – The second iteration of the European Union’s (EU) Payment Services Directive (PSD2), which comes into effect on 13 January 2018. It is designed to encourage innovative financial technology (FinTech) newcomers, competition from non-bank players and to increase choice, security and efficiency in the European payments marketplace via open banking and data stipulations that rely on shared, protected application programming interfaces (APIs). Many banks are using the compliance-driven necessity to connect to new instant payment schemes in Europe, under the SCT Inst scheme, to simultaneously overhaul their technology and fraud systems where possible, in readiness for PSD2 and the open banking and data era that it presages.
- One – editorial calendar for next year. InstaPay has launched a 2018 editorial calendar to shape and guide our monthly e-newsletters next year, spanning topics such as ISO20022; Mobile functionality; & Regional focuses on the Americas, Europe & Asia. Please take a look and contact the editor if you’d like to submit a thought leadership article. The InstaPay submission guidelines can be seen by clicking on the highlighted text.
The above are just a small selection of some of the stories covered by InstaPay throughout 2017, alongside our show reports from the Sibos 2017 show; Money 2020; EBAday. There have also been a number of interviews with, among others, Roy DeCicco, Managing Director at JPMorgan Chase on the importance of the Automated Clearing House (ACH); Katrina Stuart on NPP Australia; Jan Pilbauer CIO of Payments Canada on its modernization project; Irfan Ahmad at The Clearing House (TCH); & Frantz Teissèdre of Société Générale on the European scene. SWIFT’s Jairo Namur, its head for Brazil, Colombia and Mexico, also provided a Latin America overview on its payments landscape.
We look forward to covering the instant payment scene for you again next year, with the help of our distinguished Editorial Advisory Board and reporting team. Please let us have your feedback and share your thoughts with us about this ‘listicle’ and other articles on email, twitter, LinkedIn. Happy yuletide and holiday season from us all at InstaPay.
Best wishes, Neil Ainger, Editor, InstaPay.