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
Helping Merchants Protect Themselves: Cybersecurity Tips from a Former White House CIO
In a world full of open technology, the devices that make our lives easier also leave us vulnerable to being hacked, according to Theresa Payton, former White House CIO and star of the CBS series Hunted. Payton recently joined me for an exclusive ACI cybersecurity webinar, sharing expert insights into how merchants can enable growth, enhance the customer experience and prevent greater instances of fraud.
Why India's Payments Players Need to Fight Fraud with Machine Learning
By 2023, experts are predicting 60 billion UPI (Unified Payments Interface) transactions annually, accounting for more than 50 percent of India’s total digital payments transactions. And it’s estimated that today nearly 50 percent of all real-time payment (RTP) transactions globally are processed in India. It’s an exciting market for payments innovation, with a wide range of digital overlay services available to consumers and merchants, thanks to the introduction of UPI.
The Untapped Opportunity of Machine Learning for Real-Time Payments Fraud Prevention
Artificial Intelligence (AI) is among the buzzwords of the moment, but when it comes to tangible innovations that have the potential to drive rapid ROI, machine learning should be part of every bank or processor’s strategy. No matter the size of the institution.
How Banks and Acquirers Can Deliver on the Benefits of PSD2 SCA Exemptions and Differentiate Their Merchant Services
PSD2 is an opportunity for acquirers to differentiate themselves by delivering improved services to their merchants, if they implement modern solutions to manage SCA exemptions. This will drive the best customer experience in combination with regulatory compliance.
Cooperation, Consultation and Collaboration Are the Keys to Countering CNP Fraud in Australia
As Europe, and other parts of the world ramp up for regulatory changes around PSD2, Australia is about to launch its own strategy to combat Card Not Present (CNP) fraud.
PSD2 and Strong Customer Authentication – What's in Store for Merchants?
With the final pieces of the Payment Services Directive (PSD2) puzzle coming together, payments businesses are highly focused on meeting their compliance obligations. But the forthcoming changes will affect everyone in the payments chain – and it’s important for merchants and PSPs to understand the practical implications for their businesses and customer relationships.
Why Banks Must Democratize Machine Learning for Fraud Prevention and Payments Intelligence
Banks are already actively on the path to digital transformation, considering new technologies, new customer experiences and new business models. A critical piece of this digital transformation centers on better understanding the wealth of data within the banks’ systems and mining it for improved customer insight. In the New Payments Ecosystem, data is as valuable to the bank and its customers as the deposits held in their accounts, and it should be protected, and leveraged for the benefit of the customer.
Payments and Fraud: The Paradox Twins
Digital commerce through web and mobile is where merchants predominantly experience shopper growth today. This has become a hugely important domain for their focus. It offers a means for international growth, new market penetration and a way to engage with shopper-hungry Millennials in their culture. Merchants frequently adopt a Digital-First, eCommerce-First or Mobile-First strategy to ensure full corporate buy-in to this strategy.
Building Trust in Open Banking with Behavioral Biometrics and Machine Learning
Strategies for fraud prevention in payments are having to evolve quickly, as new technologies emerge and digitalization of the banking ecosystem continues at pace. I spoke with Giselle Lindley, Principal Financial Crime Consultant at ACI Worldwide and Tim Dalgleish, Head of Threat Analytics, Asia Pacific at BioCatch to understand how financial institutions can use payments intelligence to build trust in this challenging environment.
Knowing New Customers – And How Shared Data Helps in Fighting Fraud
As the eCommerce industry continues its rapid growth, the lines between physical and digital shopping are becoming increasingly blurred. These changes are creating a number of challenges for merchants, not least around customer visibility and fraud prevention.