Instant Payments in Italy – And Beyond: Lessons from Il Salone Dei Pagamenti
ACI was invited back to Il Salone dei Pagamenti – Italy’s premier payments event organized by the Italian Banking Association (ABI) – to participate in a panel, “SEPA Inst – the Future.” As expected, the session was packed with stats and advice for a more efficient roll out of instant payments – in Italy and beyond.
Taking the pulse of instant payments in Europe
Javier Santamaria, chair of the European Payments Council, concurred with the findings of our 2018 Global Payments Insight survey with Ovum, stating that “78 percent of banks globally believe that the combination of instant payments and open banking will see the importance of payment cards decline over time.” This, Santamaria suggested, will be further driven by the 100 percent reliability level now provided, and the 2.5 second average transaction time that will generate new use cases. He also pointed out the business case against cash, with 24/7/365 real-time payments availability providing a springboard for payment service providers (PSPs) to create new products and revenue streams. Overall, the message was even more buoyant than their TIPS Market Consultation on Volumes prediction back in March, which stated that instant payments growth is expected to rise to 13 percent of total payments for all payment methods by 2020, and to 23 percent by 2023.
The evidence for proving the business case for instant payments is out there – with 66 percent of the banks in markets that have live instant payments infrastructure viewing it as a revenue driver for their financial institution.
In fact, Intesa Sanpaolo – the first bank to go live with instant payments in Italy – stated that 50 percent of its clients had used instant payments as a replacement for traditional money transfer more than once, reaching 2 billion Euros (to date) in volume of transactions and growing. Intesa Sanpaolo rolled this out to customers without fees for the first three months, then saw a temporary drop in usage in April when they started charging. However, once Intesa’s customers saw the value they were missing, they reengaged, and have since seen increased leveraging of instant payments.
Another key takeaway from this year’s event was the pressing need to invest in education and information for customers so they understand the advantages that instant payments offers and how to use this payment method effectively, whilst avoiding exposure to fraud as transactions are irrevocable. Ann Borestram from the European Central Bank stated that “instant payments are the new norm for PSPs and merchants – now payment providers need to take it to customers.” We already know that both corporate and retail Italian customers have one of the highest appetites for instant payments from small and medium sized businesses, with 90 percent saying they would consider switching bank providers if they weren’t offered it, and 50 percent saying it would be essential to the success of their business.
The business case is further strengthened by consumers globally saying instant payments was second only to loyalty discounts and offers as the most popular offering that banks could offer. The more education on instant payments, the greater the push from customers to demand their banks offer faster access and reachability. This will drive adoption and prioritize instant payments as a key strategy for banks over other projects.
The message from Il Salone dei Pagamenti was clear – banks need to develop their strategies and accelerate their instant payments roll-outs pronto – or they will lose out to their more innovative competitors.
With the launch of TIPS, there are now even more Clearing and Settlement Systems for banks to leverage, and ACI provides payment processing solutions for all EBA payment types: RT1 (real-time payments), Euro1 / Step1 (High-Value Payments) and STEP2 (SEPA Batch ACH Payments). ACI also supports ECB TIPS real-time payments, access via STET CSM, SWIFT and ACH through its UP Real-Time Payments solution.
Related Blog Posts
Nordic’s P27 Powers Ahead with Cross-Border Payments
P27 continues its accelerated journey to cross-border payments in the Nordic region, with an ambitious project scope and timeline. For banks, processors et al, this poses questions of prioritization. Payments players must identify their most pressing business needs, and what can be achieved with their current stack.
2020: The Year of (Near) Cashless Transactions?
Happy belated New Year and raise your hand if you make and/or follow New Year’s resolutions. I used to and then realized they were exercises in futility. But, over this past holiday, I thought I’d give the resolution game one more shot. This one was more a realistic goal than it was a resolution, but who can really tell the difference anyway!?! I decided to go cashless over the holidays, which can still be somewhat challenging for many in the US (though my friends in other countries are probably ridiculing me right now). I was traveling (to NYC and Florida) and wanted to pack as little as possible (in both my luggage and my wallet). I’m all about loyalty card points these days, hence the 2 back-to-back trips.
How India is Tackling the Challenges of Digital Payments Growth
India’s massive transformation from a cash-based society to a cashless society is underscored by the rise in fintech adoption and the growth of the Unified Payments Interface (UPI) platform, which is now processing more than one billion transactions each month.
Three Merchant Payment Trends to Watch in 2020
In 2019, merchants everywhere were challenged by pressure from new entrants, the continued breakdown of traditional industry boundaries and growing customer preference for a digitally-led or digitally-influenced purchasing experience.
The Invisibility Cloak of Payments: What Are the Consequences?
If you could pick any superpower, what would you pick? Children often pick "invisibility.” Oh, the possibilities of being invisible! What fun! You can walk into a candy store and take all the candy you want, you can stay downstairs late with your parents and listen to what they’re saying, you can sneak out without anybody noticing… But when you think about it, there are also disadvantages that come with this superpower.
What’s Next for Nordic Payments? P27 and the Rise of Real-Time and Cross-Border
The Nordic region has long been considered a pioneer of digital payments, with some of the lowest cash usage levels in Europe; however, the impact on cross-border payments has been limited when compared to progress on the domestic front. And this is a crucial area to address for a region with large volumes of trade and tourism between neighbors, as evidenced by the fact that 18,000 Swedish workers commute to Denmark on a daily basis. Not surprisingly, improving the cross-border payments experience and efficiency is a high priority.
Looking Back at Money20/20 USA: Where Do We Go From Here?
Now that the dust has settled on another successful Money20/20 USA in Las Vegas, it allows for a moment of reflection on what some of the announcements and trends mean for the ever-changing financial industry. Discussions spanned a variety of topics, including the future of international and digital expansion of PSPs, how organizations developing cryptocurrency wallets plan to enter the payments space, and how challenger banks plan to revolutionize the banking experience. Inclusivity was a recurring theme throughout – and nowhere was this more evident than in the Rise Up program.
Digital Overlay Services Unlock the Value of Real-Time Payments
The global payments industry continues to drive toward true real-time, with the potential opportunity for corporate banking often cited as the most lucrative.
2020 Fraud Predictions: What to Expect Across the Globe as Cybercrime Evolves
As we near the end of 2019, our payment experts have begun to take stock of the trends over the last year, and make their predictions for where they see the industry heading in 2020.
I sat down with our own fraud experts, Marc Trepanier, principal fraud consultant for North America, and Giselle Lindley, principal fraud consultant for APAC, to get their thoughts on what we can expect in the year ahead around payments fraud.