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Instant Payments, the need for speed!

Instant Payments
The need for speed!

Michael de Jong

Payments Division Manager for equensWorldline

In a world where we can instantly share our holiday pictures from thousands of kilometers away, payment has been lagging. However, the recent move towards instant payments is going to change all this. With instant payments, you have a transaction that takes place in seconds, with an immediate confirmation to the buyer and the seller and immediate availability of the funds. The implementation of SCT Inst (the new EPC Instant Payment scheme) is expected to go live by November 2017 at a European level.

This does entail some challenges for banks and merchants to keep up with this fast-paced type of payment. If the end-to-end processing will happen within seconds with instant payments, every step in the payment process needs to speed up. The initiation, the authentication and the validation of payments should all be processed in real-time and 24/7/365.

How can Worldline help banks offer instant payments?

Worldline, through its subsidiary equensWorldline, is unique in the market place in its ability to offer a full end-to-end solution for Instant Payments. We are already well underway in our developments, to be fully up and running by November 2017. We have innovative channel solutions with white label mobile banking and mobile P2P applications. Also, we offer instant payments with back office processing to banks and clearing and settlement services.

Our back office payments processing solution allows a bank to offer instant payments to its customers without the need to invest heavily in an ‘always available, low latency’ payments processing engine. Banks can benefit from the economies of scale using our shared platform and have the security of remaining compliant.

Our instant payment clearing and settlement service offers secure, low latency clearing to all PSPs in Europe. It is fully EPC compliant and will use the new ECB announced ASI6 Real Time settlement solution for a risk free settlement. It comes with differentiating tools for liquidity management with a real time view on the transactions and settlement flows, algorithm-based liquidity forecasting and automated liquidity management. On top of that, we offer value-added services such as an alias conversion service and real time fraud detection.

These elements are separate components that can be procured as an integrated offering, but also as individual components depending on the needs of each bank.

Is this a Pan-European solution and is it already deployed?

Yes, our solution is pan-European and is available to any PSP (Payment Service Provider) in this area. It is currently in development with the first release planned for the first quarter next year, with full EPC compliancy when the scheme goes live in November 2017.

In terms of interoperability, Worldline is very active through EACHA (European Automated Clearing House Association). Within EACHA (a membership organization consisting of main ACHs in Europe including Worldline, STET, Iberpay, SIBS, Bundesbank, ICBPI and others,…), an instant payments framework is developed to facilitate the interoperability between ACHs in Europe. Worldline already started working on securing and implementing interoperability links with the major ACHs for Instant Payments, as it has done for SEPA in the past.

Is this solution capable of adapting to different use cases, such as P2P, invoice payments, intercompany payments…)?

Yes, the solution caters for all uses cases, ranging from P2P (Peer-to-Peer) with our alias conversion service (translating mobile phone numbers to IBAN numbers) to C2B (Customer to Business) and even B2B (Business to Business) when value limits allow this. The service also comes with value adding services such as the ability to send an attachment with a payment, allowing for interesting use cases such as e-invoicing and digital receipts.