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Faster Payments: What can the US and Europe expect?

Sandra Horn: I’m looking forward to our talk at NACHA PAYMENTS 2018 next week. Considering our discussion at the event, what strikes you about the adoption of real-time payments in markets such as the UK, Singapore and Thailand?

George Evers: The pace of adoption is certainly telling. Almost 10 years after the launch of FPS in the UK, over 25% of all direct credits in the UK are processed through FPS. In Asia, the ASEAN Payments Network, driven by Malaysia’s PayNet, is exploring cross-border links with Thailand and Singapore. The PromptPay service in Thailand, which launched in January last year, has seen unprecedented success with over half the population registering for the service, to get quick and secure access to real-time payments. Additionally, in Singapore, an overlay service called PayNow was introduced in 2017, which allows payment using QR codes via mobile phone. That’s a great example of how innovative services can be built on top of real-time rails.

SH: Aside from adoption rates, what are some key takeaways that the U.S. and EU markets can learn from the maturing markets?

GE: One of the biggest takeaways is that bringing in real-time payments will most certainly make the pie bigger, creating new market demand and growing the ecosystem in both volume and value. In addition, in the UK we saw that between 2008 and 2016, the use of checks plunged almost as much as faster payments gained in market share.

It’s interesting to also examine the growth patterns of major payments innovations introduced. For example, credit cards were initially available only to the affluent, so banks had more time to gain comfort with a wider user base. ATMs also saw slower adoption at first, though mainly due to costly network requirements. On the other hand, debit cards were adopted much faster because the existing network of acceptance points was in place. Online and mobile banking similarly took off due to the availability and access of personal computers and mobile penetration. Similarly, in the U.S. and EU, the basic conditions are in place for both regions to see a rapid adoption of real-time payments, so it will be important to ensure the infrastructure and systems are in place to handle such high volume.

SH: So, what can we expect in the U.S. and EU as real-time payments start to take shape?

GE: It’s going to bring about a lot of change no doubt. Especially when you consider that the seeds are already planted with digitally sophisticated, open and highly banked markets. The open banking opportunity is for the taking and some EU banks have already introduced their strategies for realizing new, value-added services riding on the PSD2 mandate.

SH: Let’s talk a little more about open banking, how are the U.S. and EU markets faring in the move towards open banking? What about the UK?

GE: The EU is further ahead in its shift to opening access to financial and customer data because of its PSD2 mandate. However, the U.S. is naturally progressing towards open banking as banks make efforts to connect and build a broader, digital ecosystem of partnerships.

Open banking exposes even more potential when combined with the rich data carried by real-time payments. The UK FPS is expecting growth to accelerate to 25 percent per year because of PSD2’s open banking requirement. The possibility of instant access to consolidated financial data from multiple institutions is simply too powerful for innovation not to occur.


Catch Sandra Horn and George Evers at NACHA PAYMENTS 2018 on Tuesday, May 1 at 4:35 p.m. in Room 8.

Read more about real-time payments and the next stage in its evolution in the report, “Real-Time Payments: Value Realization is Here.”

Payments Expert

ACI Worldwide powers electronic payments for financial institutions, retailers and processors around the world with its broad and integrated suite of electronic payment software.