Immediate Payments – Readiness

Immediate Payments – Readiness

Anthony Walton

CEO at Iliad Solutions

For over 25 years, Iliad Solutions has been at the forefront of building, implementing and supporting major payment solutions. Our experience has led us to develop the most comprehensive and resilient test solutions available in the world today, and our global customer base trusts us to take the risk out of payment testing

Views 615

Immediate Payments – Readiness

14.11.2019 12:30 pm

The payments industry is seeing a massive global surge in the implementation or modernisation of Immediate Payment systems. These systems challenge the status quo, and when used effectively create real opportunities for financial institutions to improve service and/or develop new business opportunities.

In Ovum’s 2018 Payments Report (2018 Global Payments Insight Survey: Cross-vertical) there were some telling statistics demonstrating the direction of travel for the payments and banking industry:

  • At a global level, 51% of all merchants, billing organisations, and retail banks will increase their IT budgets for payments-related projects in 2018.
  • Real-Time Payments are now central to planned customer service improvements for the majority of retail banks, billing organisations and merchants.
  • Over three quarters of organisations expect, or are experiencing, customer service gains from real-time payments.
  • At a global level 78% of banks, 72% of billing organisations and 68% of merchants think that the combination of Real-Time Payments and Open Banking will see the importance of payment cards decline over time.

Whether the ubiquity of Immediate Payments ever develops to the point that national schemes become linked internationally is yet to be determined. However, that certainly seems a possible next step for some of the initiatives.

Success of Immediate Payments

Take up lies at the heart of the success of Immediate Payment schemes, wherever they are deployed, and this is itself linked to the on-boarding process. The schemes need members to get on board as rapidly as possible to create the necessary groundswell of use that sees Immediate Payments adopted as ‘normal’ for consumers and businesses.

One of the things that interests me about this is that the schemes often ignore the challenges members face to prepare themselves for connection and live operation. Indeed, most of the on-boarding processes executed by schemes focus on certification, and occasionally pre-certification. Our experience in developing and testing new payments systems tells us that some areas of development are often overlooked. The area of greatest difficulty in adoption is not certification, but is actually internal testing.

Integration

An Immediate Payments system deployment demands that banks integrate multiple systems, many of which were not even designed to co-exist. We spoke to one bank recently with 45 internal systems linked into its RTP gateway. Readying these for an expansion of Immediate Payments is a major undertaking, but it doesn’t stop once the bank is integrated with the scheme. The scheme must accommodate new releases, and the connecting systems will themselves experience seemingly constant change.  This means that there will have to be continuing regression and new state testing, often at the same time.

How to overcome the challenge

The challenge for the industry is to remove friction from the on-boarding process.  Simply providing a relatively basic standalone test simulator may tick the certification box for a scheme. However, it does not address the banks’ concerns, which is where the real friction lies.

Schemes need to recognise that the key to removing friction and accelerating adoption is a testing platform that enables banks to concentrate on the process of joining the Immediate Payments environment, rather building out masses of test assets that will themselves become redundant in time, and costly to maintain.

The schemes which acknowledge this fact, and expend time and effort to help the banks by offering internal testing as well as certification, will see their investment repaid many times over. By providing support for the first critical stage of the process, the schemes will ensure a more rapid, controlled and assured deployment. Everyone benefits.

The ability to do this exists; the schemes now simply need to embrace it, consider the industry challenge and avoid focusing simply on certification.

 

 

Latest blogs

Bernard Foot MYHSM

Use of cash after COVID-19

Recently, I looked at the question of whether using cash presented more of a COVID-19 health risk than using contactless. There was no convincing evidence either way, but it’s clear that there’s a sentiment against handling cash and Read more »

Shaun Collings Pure Storage

Change Starts from Within: Overcoming Digital Transformation Barriers in the Public Sector

Across the public sector there are various forms of digital transformation taking place, at different stages of progress.  Part of the driver for this is that citizens now expect a level of service akin to what they receive from private Read more »

Jonas Andersson Fingerprints

In Consumer Biometrics We Trust: Authentication For the Data Privacy Age

Data privacy is high on the global agenda. In the wake of data protection policies such as Europe’s GDPR, ensuring the integrity of personal data is an increasingly pertinent subject. This is a governmental and corporate policy reflection of the Read more »

John Burgos Mindgate Solutions

Overcoming anxiety around mobile payments & digital payments - In the South Asia Pacific

Innovation and technology usually go hand in hand.  Therefore, for innovation to be fully realized, the technology that enables the innovation must be adopted as well.  During the last 5 years, we have had innovations from Google, Apple, Read more »

Stuart Robertson iDelta

Finance Sector PLCs Hold the Key to Economic Recovery

We have started to see the devastating impact the Coronavirus will have on our economy.  The travel, leisure and hospitality industry redundancies are rapidly mounting up with restaurant and bar owners facing no option but to shut up Read more »

Related Blogs

James Booth PPRO

Brave New World: A Futuristic Vision of Payments

Over the last ten years, the retail e-commerce ecosystem has undergone a wide-ranging transformation. As recently as 2010, the e-commerce and payments value chain were relatively straightforward: Any eCommerce merchant could integrate a payment Read more »

Alex Malyshev SDK.finance

How to Apply For Electronic Money Institution License and Payment Institution License In Lithuania

As a supplier of core payments and transaction engine software, SDK.finance knows what difficulties our customers face in the process of applying for an Electronic Money Institution License and Payment Institution License In Lithuania. So we decided Read more »

Gabriel Leperlier Verizon Enterprise Solutions

Why is Payment Security Compliance Declining with only 1 in 3 Companies Globally Making the Grade?

When companies are attacked, personal and financial customer information from payment card data is often the target. The Payment Card Industry Data Security Standard (PCI DSS) was designed to help protect payment data from the point of purchase and Read more »

Andrew Stevens Quadient

Banks to Defer Mortgage Payments Following Coronavirus

It’s great to see RBS leading the charge in putting customers first during a crisis – with Lloyds and TSB quickly following suit. People are talking about these policies because banks have communicated them very clearly; if you put the leg work in Read more »

Otabek Nuritdinov Safenetpay

Why trust matters

A financial institution that is successful over the long-term is almost certainly one that is characterised by a high level of trust. The same is true of a payments services provider. As we have discussed in previous blogs, payments services Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel