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EBAday 2018 Day 1 Report: Instant Payments is not the new normal


Instant Payments has dominated proceedings here at EBAday in Munich. Whether it is practical experiences with pan-European Instant Payments, global real-time payments interoperability, or banking and payments in the era of platformisation, Instant Payments (IP) is the number one topic for the European banking community.

In our day one report, we take a look at the biggest stories or the day, and share insights and key learnings from the conference sessions.

EBAday Breaking News

  • Euro Banking Association calls for collaboration on B2B data sharing; sets out strategic goals
    • The Euro Banking Association is advocating the creation of an industry-led coalition to drive digital consent management and data exchange standards in the B2B space, as Europe prepares for a new era of Open Banking under PSD2.
  • CBA completes SEPA Instant Payment testing with EBA Clearing
    • Norwegian software vendor Commercial Banking Applications today confirmed that it has successfully completed testing of IP with EBA Clearing. CBA’s ‘IBAS SIP – SEPA Instant Payment Solution’ can now support the processing of real-time payments for banks connecting to the EBA Clearing Instant Payment System.
  • SIA certified for central bank instant payments
    • Italy’s SIA announced that it’s the first network service provider to have been granted certification from the Eurosystem to provide access to TIPS – the new pan-European service for settlement in central bank money of IP, the launch of which is planned for November 2018.
  • Finastra’s European Instant Payment solution available on Microsoft Azure
    • Finastra has announced the commercial availability of its European Instant Payments solution on Microsoft Azure, Microsoft’s enterprise-ready, trusted cloud platform. The solution enables financial institutions and third-party providers to process SEPA SCT Inst payments in the cloud.

Insights into Instant Payments

“Instant Payments is not the new normal”

Petia Niederländer at ERSTE Group argued that framing Instant Payments as the ‘new normal’ isn’t helpful for the market. Quoting a recent survey which says that 70% of companies are keen to shift to IP, the question for banks is how do you deliver value? A use case voted as important by the audience was intertwining IP into merchant ERP systems to optimise resources. Petia argued that to deliver value in this way, will require substantial system changes which while delivering strong returns, will also carry risks. If we refer to IP as the new normal, we don’t adequately communicate the scale of advantages as well as the risks.

Ultimately, IP is transformational. So let’s describe it in those terms.

“Fraud is decreasing dramatically despite channel growth”

Rachel McMahon at NatWest took a look back to the launch of Faster Payments in the UK in 2008, citing fears over fraud as the ability to mitigate risk narrowed dramatically with IP. This meant that initially IP wasn’t available over certain channels deemed to risky, especially as two-factor authentication technology was too nascent to help. Between 2011-12 as banks became more comfortable and introduced the necessary processes more channels opened up and with this an uptick in transactions.

Despite the growth in volume, fraud has remained low. Rachel cited £1.30 in every £1,000 of IP transactions went to fraud back in 2011. This has now been reduced to just 7p in every £1,000 today.

“Use cases are emerging that we never foresaw”

Gerhard Bystricky at Unicredit Bank AG was part of an EBA task force that tried to predict and mitigate for potential use cases when IP was being developed. In an audience poll, real-time information for corporates was voted the most valuable benefit of IP.  This was something that the task force hasn’t forseen in its research and industry consultation. During this panel, an example of IP being used to accelerate cash-out at merchants for consumers in cash reliant markets was also cited.

These are just two examples of unexpected use cases that the market is driving around IP. And it serves as a reminder that agility is critical if banks are going to be able to meet the – often unforeseen – needs of their corporate, merchant and retail customers.

“It’s the services, not the payments that matter”

In the panel focussed on practical experiences with Pan-European Instant Payments, the panellists were united on one thing. It’s not the payment itself that matters, it’s the services you enable with this new infrastructure. With the expectation that Faster Payments, SCT Inst and other flavours of Instant will consolidate in the future, banks and the vendor community need to work closely with their respective customers to uncover latent and hidden needs on which to base services upon.

The winners in the Instant Payments race won’t be decided by who has the best plumbing, but who is able to predict and react quickest to the market to deliver the kinds of services that will drive the adoption of value added products in the future.

InstaPay will be producing a daily show reports and interviews from EBAday in Munich. Interviews with Michael Steinbach CEO of equensWorldline and Cedric Derras, Global Head of Cash Management at UniCredit are already live.


Check back for further online reports, interviews and other material from this year’s show. You can also find our day 2 report of EBAday here.

Author: Saara Day