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SIA instant payment hub for SCT Inst leads vendor charge

21 November 2017

SIA has unveiled its ‘Easy Way’ instant payment (IP) hub. The refreshed technology solution is designed to coincide with the ‘go live’ of the SCT Inst scheme today on 21 November.

SIA Easy Way offers connectivity, integration and overlay services to payment service providers (PSPs). Other vendor connectivity and integration payment hubs are also available and the battle for end users can be expected to hot up now that the European Payments Council (EPC) designed SCT Inst rulebook is live.

The ‘Easy Way’ solution can connect banks and alternative PSPs to the EBA Clearing RT1 SCT-Inst compliant pan-European platform, which SIA was the technology provider for. It also provides a management hub to handle older single euro payment area (SEPA) payment instruments like SEPA Direct Debits (SDDs).

The Italian headquartered payment specialist, which handled 2.8 billion payment transactions last year and 12.2bn clearing instructions on capital markets and elsewhere, says that its SIA Easy Way solution can be used to connect to other European Automated Clearing House (ACH) and future instant payments platforms that are under development worldwide. It is not just RT1 connectivity that is available, although that is obviously a selling point for those wanting cross-border functionality.

The European SCT Inst rulebook will encourage but not mandate ISO20022 messaging handling. The IP scheme rulebook is based on the older SEPA Credit Transfer (SCT) framework, but with new instant requirements such as:

  • constant 24x7x365 availability;
  • less than 10 second instant euro transfer capabilities, including cross-border among 34 SEPA countries;
  • an initial €15,000 maximum transaction limit.

By connecting to the RT1 platform that it helped build SIA intends to provide easy cross-border euro instant payment reachability to its clients via a central payment management hub. Its Easy Way product can also handle integration at PSPs existing internal systems, aiding technology and operational alignment.

As with other connectivity options and payment hubs, available from rival vendors like FIS, ACI, Icon and so on, the idea is to link users’ entire payment chains including order management, liquidity, access controls, fraud and financial crime monitoring controls into one easy-to-use gateway. The ‘hub’ can cover different channels from mobile to internet banking, and provide data analytics along the way too. This allows new bank and PSP services to be easily rolled out, linking to IP infrastructures, should the user so choose.

Other vendors and technology providers are also promising SCT Inst connection options, such as SWIFTNet Instant for instance, and RT1 is not mandatory – indeed the whole European scheme is voluntary, making the instant payment adoption across Europe a slow process. Many national clearing and settlement mechanisms (CSMs) intend to align their domestic ACHs with the rulebook, but only eight have so far.

Overlay services
Access to so-called overlay services is a key selling point for all hub vendors, although it is up to the PSPs to actually develop them using the technology and functionality available to them. Overlay services will typically sit on top of the EPC SCT Inst scheme rulebook as a ‘value-add’ for banks’ corporate and consumer customers.

All vendors and PSP end users of their technology additionally hope to take advantage of the more open banking and data environment presaged by the European Union (EU) Payment Services Directive (PSD) 2 regulation in the new year as well. This will further encourage overlay services.

PSD2 is one of the key drivers of interest in this regard, although the extra characters available with ISO20022 messaging will also help encourage new data-based services. More character space will enable extra data, tracking, mobile number account origination and other such services to be more easily launched.

A wave of new non-bank players known as Third-party Payment Service Providers (TPPs) are expected in early 2018 when PSD2 starts. SIA is obviously hoping financial institutions (FIs) and newcomers will turn to its hub to comply with the regulation, become SCT Inst-compliant, and benefit from the expected opening up of the payment marketplace. But other vendors will have the same expectation. The battle for volume and users is underway.


Author: Neil Ainger