Review of: Instant Payment Forum, Budapest
A conference review for InstaPay by Dr. Jozsef Czimer
The Institute for International Research is an organiser of high quality conferences, training courses and other events in Hungary. In the payments space their most popular conference is an annual ”Payment Cards” event. Observing international payment market trends they decided to organise an ”Instant Payment Forum” which was held on the 28th March in Budapest. The author of this article was asked by the IIR to Chair the conference and help in the recruitment of a strong speaker lineup.
Presenters came from the National Bank of Hungary, VocaLink, ACI Worldwide, Capsys (a Budapest based Hungarian IT company), Lipis Advisors and Visa. VocaLink and ACI gave a good presentation on best practices including the use of overlay services and how to connect PSPs systems to a central switch. Robert Kiszely, Director of Professional Services from Capsys talked about implementing instant payments in parallel with PSD2 and what the banks will have to do to be compliant and successful.
Dr. Leo Lipis provided the audience with an excellent picture of the global instant payment landscape, starting from the very first implementation in Japan back in 1973 to the very latest projects. In his presentation he explained how the large economies like the US and the European Union are planning to implement instant payments.
Domenico Scaffidi of ACI explained about the very complicated European payments world and this was followed by the perspective of an Hungarian Fintech before the audience heard the views of Visa.
Despite there being many excellent presentations these were all eclipsed by one from The National Bank of Hungary. The good timing of the conference had earlier been hinted at by the National Bank but nobody knew that the Payment and Stability Council of the Bank, its leading decision making body, would come to a decision about the way ahead just four days prior to the Summit.
This meant that the March 28 Instant Payment Summit was the first public possibility for Mr. Lajos Bartha, Director of the National Bank of Hungary responsible for payment policy to outline their plans to the public. For the benefit of those unable to attend the forum I am sharing some of the key details he outlined.
Having investigated three possible models including a shared operating system as being implemented in Australia, The Target2 Instant Payment Settlement Service as planned by the European Central Bank, and an ACH based solution as applied in many international markets, the National Bank of Hungary has decided that a central switch is to be implemented.
This Hungarian national instant payments infrastructure is to be operated by the country’s existing ACH Giro Zrt. Giro will also provide a proxy database for secondary account identifiers allowing various overlay services to be introduced by banks and other PSPs.
According to Mr. Bartha an RFP for acquiring the best software solution will be issued by Giro within the next two to three months so that all the preparations including the setting up of the legal basis for the service can be finalised by the end of 2017. This will give enough time for the service to be operational at Giro and for PSPs to connect in to it ready for a launch on July 1st 2019.
The key points of the Central Bank’s decision outlined by Mr. Bartha were:
- starting from the above date all payments under HUF ten million will be processed by the instant payment system
- the availability of the system will be 24/7/265
- the transaction speed will be 5 seconds
- a payment request service must be offered
- a positive response will be an option while negative response will be an obligation
- the application of three types of secondary account identifiers will be offered by the service including mobile number, e-mail addresses and a later state defined issued identifier number
- all usual standards and regulations are to be applied (ISO 20022, SCT Inst) and the system is to be interoperable
More details can be found on the InstaPay Tracker.
Unlike in this blog Mr. Bartha was the first to speak at the Summit allowing others to react to his announcements. Attendees said how helpful the summit had been in the Hungarian process of setting up an instant payment service and the author sends his best wishes to everyone working on this most interesting project.
Prepared by dr. Jozsef Czimer, Adviser to the Capsys CEO