Sobre Instant Payments & VoP Summit
‘Instant Payments’ as it’s named clearly means “paying or receiving payment instantly*” Instantly* means within few seconds anytime – 24/7, 365 days. Instant payments also known as “Immediate Payments” or “Real time payments” have been dubbed as the “New Cash” of this era of digital payments as it works at least as fast as cash (if not faster than cash).
According to the ERPB, instant payments are defined as –
“An electronic retail payment solution available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee’s account with confirmation to the payer (within seconds of payment initiation). This is irrespective of the underlying payment instrument used (credit transfer, direct debit or payment card) and of the underlying arrangements for clearing (whether bilateral interbank clearing or clearing via infrastructures) and settlement (e.g. with guarantees or in real time) that make this possible.”
Why Instant Payments?
Instant payments are set to drive the most significant transformation in the global payments landscape since the introduction of today’s electronic payment mechanisms. In the digital era, it is incomprehensible why e-payments should take longer than e-mails or instant messages/ SMS, live movie streaming or Instagram. There is definite growing demand for immediacy of retail payments transactions and delaying things would be denying customers of their needs and expectations.
What are the key drivers of Instant Payments?
• Customer’s need for overlay services –
To meet the Customer’s growing demand for immediacy of retail payments Customers expect to pay for and receive their purchases as fast as possible. Suppliers, on the other hand, wish to have the certainty to be paid as soon as they release their goods and services.
• Need for banks to remain competitive –
Instant payments will help banks to not just stay competitive by improving the transaction velocity, reducing fraud risks in the transaction processing but also boost its business growth by offering holistic payments solutions spanning the value chain in order to differentiate from Non-Bank Players.
• Regulators need for encouraging competition and digitalization –
Regulators and central authority’s top agenda is to promote fair competition, Anti-Money Laundering, customer protection, and improving clearing & settlement mechanisms and digitalization of the economy.
• Need for ubiquitous Payments –
Industry’s growing demand to modernize legacy payments infrastructure across countries to offer more ubiquitous payments instruments.
• Non-bank player’s need for customer acquisition –
There will be a level field in a post PSD2 world and Non-Bank players want to enter into this space and use Instant Payments as a potent tool to drive significant market customer growth.
What are the main benefits of Instant Payments?
• Dramatically improves the transaction velocity, overall efficiency and therefore customer’s satisfaction.
• Reduces fraud risk in the transaction processing by reducing transfer time.
• Creates new revenue sources and business growth by offering holistic payments solutions.
• Reduces transaction, treatment and settlement costs and nearly zero cost of cash management, handling and reconciliation for merchants.
• Reach new markets
• Obtain competitive advantage of being providers of holistic payment services
