The last two sessions of day one of EBAday returned to the theme of instant payments, with the first of these updating the audience on the status of immediate cross-border payments.
Moderator Javier Santamaría, chair, European Payments Council was accompanied on stage by Katja Lehr, MD, EMEA local payments and commerce solutions, JP Morgan; Rafael Linde, head, international development and global relationship management, Cecabank; Steve Naudé, head of Wise Platform, Wise; Petra Plompen, service development and management, EBA CLEARING; and Simon Wilson, MD, transaction automation, valantic FSA.
Lehr began the discussion by stating that from her perspective, immediate cross-border payments “have made great progress from a technical perspective. We think we have done we have connected in various parts of the world, very well-known and tried clearing and settlement systems across jurisdictions. We've done proof of concepts. We've done pilots on new technology using blockchain to enable cross border international payments.” However, she argued there was still improvements to be made in areas like regulation, especially between countries and data exchange.
Lehr further added that, “we know that the moment we use instant payments, fraud goes up.” Plompen argued: “it's good to have the technology in place. But if it doesn't serve the needs, first of all of the users of that infrastructure to be able to create the solutions for their users, then we won't achieve what we want to.”
One issue Linde wanted to raise was about FX conversion was that “I think sometimes we pick up the concept of multi-currency with cross currency. Multi-currency should be a solution that allows any currency to be sent from point A to point B whereas cross currency in place that the currency will be converted at some point during the payment chain. And this is tricky.”
According to Wilson, “end users and as clients that I want to look at things in a way that says this is the kind of payment I want to make. They want those payments to be at a level where they're just choosing what service and what cost they want and ultimately, they want a good service at a good price and whatever is applicable and the exact route the exact network exactly why those payments are happening. They don't care about.”
Naudé commented: “there's no reason why moving money isn't as easy as other forms of data. Yes, there's some friction that needs to be in the system around some of the checks and screening and controls. But then the question is, how do you minimise the impact of that? So, if we can perform real time sanction screening on the beneficiary, and is a potential match, we can surface other questions to the customer in the flow immediately.”
The final panel of the day, titled “On the cusp of the instant payments era”, proved to be an exciting forward-looking session for the payments world.
The panel was moderated by Camilla Åkerman, secretary general, Nordic Payments Council and was attended by Luke McAlpine, director of product, payments, Thought Machine; Fredrik Tallqvist, regional representative, Finland and the Baltic countries, EBA CLEARING; Dr Hubertus von Poser, member of the management board, PPI; and Michèle Zaquine, director, head of propositions and commercialisation Europe, Global Payments Solutions, HSBC.
Regarding whether regulation should be the right way to increase usage of instant payments or if it should be market driven, Zaquine stated: “I think that when it's driven by regulation, it really pushes solutions into the into the market within a given framework. And what that does is it allows all actors to transact in a secure and optimal manner.”
McAlpine concurred with this position and said that: “sometimes having a regulatory driven approach and having a little nudge I think can be really useful when it comes to delivering innovation for the end consumer.”
Dr Von Poser also said: “It's very important that we have this regulation because if we look at many initiatives we see at the moment, for example, request to pay or EPI, they're connected or they are relying on instant infrastructure. And that only works when everybody's reachable.”
Looking at some of the risks presented by instant payments, such as fraud, Tallqvist argued that “a key focus we should be looking at is actually using instant where there is value and maybe not go for a mandatory push.”
Looking at what some of the biggest challenges are for instant payments going forward, each commentor gave their perspective. McAlpine stated: “I think it is a technology platform problem. I think consumers will adapt pretty quickly, but I think getting corporates in business as long as there's another challenge.”
Tallquist’s position was to not go “for any more regulation. Let the market run itself. Banks do know what to do and use their resources where they see market potential.”
Dr von Poser argued that one major challenge is a “lack of human resources. So, we should be open as an industry to work together and not everybody has to do everything by themselves. That's also valid for the service providers as much as for the banks.”
Zaquine concluded: “I think it is it's about the different actors coming together. It's about ironing out all the barriers that we see today to actually allow for those instant payments to operate in a safe environment and to actually be used as a default.”