INSTANT PAYMENTS IN THE FAST LANE. FRANK DE POORTERE CREOBIS, Antwerpen 28/05/2018

Transcription

1 INSTANT PAYMENTS IN THE FAST LANE FRANK DE POORTERE CREOBIS, Antwerpen 28/05/2018

2 Agenda The Product Why now? Europe in the driving seat The road to Instant Payments Adherence overview & Commercial Launch Use Cases Evolution and Impact on Cards, Cash, Challenges for the banks 2

3 Main characteristics of SEPA instant payments Payment processing and settlement on a continuous basis without any interruption during nights, weekends or holidays Real time notifications for payment execution status Notifications 24/7/365 Key Features Instant Funds will be made available- and are reusable-on the beneficiary account in near real time (10/20 seconds) limitation according to the scheme, but negotiable on bilateral or country level Amounts Finality Optional Banks are not obliged to adhere to the scheme Adhering banks can opt to act as both originator and receiver either as receivers only As soon as the payment has been credited, it can no more be revoked 3

4 Local BE Flavours Instant processing= max. 20 Individual payments in euro (limit 15k - incoming) Optional Scheme Instant processing= max. 5 No amount limit (incoming side) At least 80% of the accounts are reachable 4

5 WHY instant payments now? Customers make increasingly use of online and mobile channels. Buy goods and services at any time & anywhere. Instantly. Confirmation of the payment. Several countries have launched (or are deploying) (domestic) instant payments Fragmentation of the EU SEPA Landscape Within EU: 6 early adopters with a national instant payment solution (UK, Italy, Denmark, Poland, Sweden, Switzerland) Europe wants to harmonize their payment systems 5

6 The European road to Instant Payments December 2014 June 2015 November 2015 November 2015 March 2016 ERPB identifies the need for a pan-european instant payment solution Report on IP submitted by the EPC First proposal of the design of an instant SCT scheme in EURO approved by the ERPB Elaboration of rulebook by EPC TF IP 6

7 Adherence to the IP Scheme April 2018 Instant payments SEPA credit transfer Austria 470 banks 563 France 51 banks 284 Germany 404 banks 1563 Italy 22 banks 470 Spain 88 banks 123 Commercial Launches: Belgium: November 2018 The Netherlands: May 2019 France:

8 Use Cases INSTANT PAYMENT OF BENEFICIARY Immediate credit to the beneficiary: For commercial reasons For internal payment process optimisation PAYMENT ON DELIVERY Immediate notification received by the deliverer, located anywhere and having no access to the company statements CORPORATE LIQUIDITY MANAGEMENT Instant liquidity management & intercompany payments PAYMENTS COLLECTIONS POINT OF SALES In-store purchase, with seamless initiation and confirmation of payment received by the cashier (integration or dedicated app) PAYMENTS WITH DATE & TIME CONSTRAINTS Simplification of time constraints: No Cut-off time A single calendar across all countries: 24/7/365 Predictable timing E-COMMERCE Online purchase of goods or services, requiring instant payment confirmation received by a web server (for purchase process completion) 8

9 Development and adoption of instant payments 9

10 Cards growth versus SCTinst Number of card payments per capita ( ) Launch Inst DK 329 Denmark United Kingdom 232 Netherlands Launch Inst UK I D E A L 151 France Belgium EU Germany Source : ECB 10

11 Cash usagein Belgium Belgians make less cash withdrawals but Ø Each Belgian citizen withdraws cash 26x times a year from an ATM Ø More than 80% of purchases smaller than 20 are paid in cash Article 62 PSD2 & surcharging Foster usage of efficient payment instruments Interchange fees are already regulated by EU regulation ( Chapter II 2015/751 & 250/2012) Merchants have the right to propose different payment instruments no surcharging possible under BE PSD2 law ( to be confirmed) -> impact on cash usage? 11

12 Towards less cash Public authorities initiatives 1. Law limiting cash payments: ü maximum limit of 3,000 EUR; and ü cash payments limited to 10% of the total price of a good, with a maximum limit of 3,000 EUR. 2. Legislation relating to the rounding off of cash payments: rounding off of 1 and 2 cents to the nearest 5 cents. 3. PSD 2: the ban on surcharging will remove an element that discriminates against electronic payments. Private initiatives 1. Refusal by merchants of high denomination banknotes, particularly when the amount to be paid is disproportionate to the denomination. 2. Card payments: specific acquirer rates for transactions with small amounts 3. Bancontactcard scheme adapted rates for small amounts 4. Development of electronic alternatives to cash payments: ü ü ü contactless card payments Payconiq (see And tomorrow Instant Payments 12

13 Challenges for the Bank Infrastructure: 24/7/365 Payment engine: from batch -> real time Back office: fine tune internal processes Account Management System: make funds available in real time Customer contact: instant notifications Fraud & ALM: real-time checks Liquidity management: full prefunding, real time monitoring Clearing & Settlement: CSM connectivity Staff availability: supervision & monitoring, incident handling, 13

14 THANK YOU 14