Clearing The Way To Instant Payments

If the movement toward instant payments is a work in progress, the infrastructure that is needed to put that progress in place has its own journey, too.

In news announced earlier this month, EBA Clearing said it had started the testing phase tied to its instant payments infrastructure designed to work across Europe, with a go-live date scheduled for November of this year as the SEPA Instant Credit Transfer scheme debuts. Once live, account servicing payment services providers can work with any payments denominated in the euro that are, in turn, compliant with messaging standards (ISO 20022). Pilot user tests will follow the testing phase.

In an interview with PYMNTS, Erwin Kulk, head of services development and management at EBA, stated that the use cases will be diverse as they span the continent, and he noted that “when we started to get a group of banks together from all over Europe back in 2015 …. Different banks with different backgrounds had different views.”

Despite disparate views, all parties, said the executive, were able to agree that “a real-time infrastructure creates many new opportunities for banks to develop propositions to their customers” but added that “it is difficult to predict which ones those customers in the end will actually use.”

Therefore, the underlying infrastructure “must be as robust and flexible as possible” in supporting payment service providers. That necessitated, he told PYMNTS, a requirement definition that any infrastructure system pan-European in scope be case-agnostic.

As for the ramp toward November, Kulk stated that transactions as tied to the SEPA Instant Credit Transfer scheme will have what he called “a default upper limit of €15,000.” Beyond those limits, said Kulk, the banks are “considering setting higher maximum amount limits for domestic and, in some cases, also cross-border transactions to respond to specific use cases.”

Those banks can undertake transactions on a closed-user-group basis. The payments availability will be 24/7/365 and based on ISO 20022 global messaging standards, compliant with the pan-European EPC scheme. As for the payments processing capability itself, that can scale with actual volume demands, he added. In addition, “it goes without saying that cross-currency clearing in real time increases the complexity of the underlying processes and implies additional challenges. Another important element for the success of any payment system is reach …. Over the next few weeks and months, we will further intensify our dialogue with potential users and their service providers to prepare for the onboarding of early movers.”