Community

Couple of observations Richard, peronally I think the love affair with Direct Debits is not as hot as made out to be, consumers like them for certain thinks such as regular fixed payments (rent), but not so much for variable payments.  If an alternative was available like e-invoicing then DDs would drop of over the next several years.  Also many banks find DD simiply causes lots of customer complaints causing bad customer experieince and cost.

As for batches, surley any bank that wants to survive in the digital age has to get rid of batches and batch processing systems. I agree corporates will keep batches for now, payroll, etc., but that is no reason for banks and indeed the schemes to keep antiquated batch systems, Faster Payments already via Direct Corporate Access (DCA) takes in corporate batches and processes them as individual faster payments.  It would not be hard to put same day or even scheduled payments through FP too.

It’s great to see that ISO 20022 is now accepted as the way forward, however I am concerned at the number of ‘schemes for harmonisation’ that are now appearing.  First back in January 2015 EACHA published their study on Interoperable Immediate Payment Schemes, the EBA responded to the ECB and ERPB call to action with their Instant Payment Forum, and as recently as the end of April the ISO 20022 RMG convened a very inclusive and independent roundtable to discuss and make a plan for Global Interoperability of Real Time Payment schemes, which SWIFT, market infrastructures, associations, vendors and the press were invited to.  Now we hear that SWIFT, not including all interested parties, has also held a meeting to cover the same topic.  I have three main concerns with this:-

1. There are now so many of these interoperable schemes or working groups which are expensive for the industry to resource, surely this is what the ‘International Standards Organisation’ is there for, are they not best placed to bring all the parties together to create a single way forward?
2. Did SWIFT take an all-inclusive approach? Possibly not as they now compete commercially with some stake holders, unlike the ISO and the EBA.  Other parties, including vendors see the good and the bad with standards as we work with them all the time, we have valuable insight and experience and are willing to share.
3. Following on from the above, you have to question if SWIFT is truly an independent standards organisation any longer?  There is already scepticism in the industry, especially as it is developing the Australian NPP immediate payments scheme.

I would encourage SWIFT to make the output public as do the EBA and ISO, including details of participants and key discoveries, so all stake holders in the industry can benefit.

I agree with both Tom and Rik, yes this is a difficult time for banks, immediate payments and PDS2 will change the fundamental nature of financial services.  This is a massive opportunity for banks to take back the central role in financial services, which for many they have already lost. But it requires action, they need to embrace these changes and engage with partners on their terms, not just regulatory compliance.  The alternative is rather obvious.