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Very sad. Credit is extremely underserved in India. However, recovery laws are extremely pro-Borrower. In China etc., lending fintechs brick phones, leak naked selfies and use other technology-powered features to improve recovery rates and stay in business. However, such things are taboo in India. So, it's back to good old feet on street and telephone follow up for recovery. Traditional banks know those measures have limited effectiveness, which is why they have stayed away from lending to the vast majority of citizens. If fintechs have to follow the same approach, how can they succeed?

Credit Card offers rewards, deferred payments, and other benefits that Open Banking / Pay By Bank MOPs don't. On top of that, due to recent innovations like Visa Direct, credit card payments are more frictionless than OB / PBB. While merchants will prefer OB / PBB due to lower MDR costs, why would consumer switch to them from credit card?

As I highlighted in Open Banking: EU v. USA, PayM, PingIt and the other previous generation of A2A RTPs failed because they failed to answer the "What's in it for the customer?" question. So far, the new generation of such MOPs have failed to provide a satisfactory answer to that question. Unless they do so, they're bound to meet the same fate.

I must admit that an old-school banker taking over and rescuing a new-age neobank was not on my bingo card!

TY for the clarification. 

Would your answer be any different if I clarified that customer didn't make an incorrect payment?

I meant that they consciously paid 80 out of 100 due to short payment, part payment, and other legit reasons covered by the payment schedule. For example, in computer hardware industry, the moment I ship the server, I am eligigible to raise the invoice for the full 100 but customer may pay 80% on delivery and 20% upon installation, which can take days or weeks after delivery. 

TY but if, as you say, OCTInst will work if originator is in UK, it means it will settle by SEPAInst. UK is outside EU. Why won't the same happen if originator is in other outside-EU countries like India and USA in my use case?

Is it because SEPAinst covered UK when it was in EU in the past, and continues to cover UK even after Brexit? (Whereas India and USA were never part of EU, so SEPAInst never covered them.)

TY @Malhar K. I wondered as much but I don't find that reflected in the text of the article.

If, as you say, OCTInst needs only one of payor or payee to be in EU, then (1) The payment could originate from EU, why does the article only say "destined for EU"? (2) Payor in India can make a payment to payee in USA by doing India-to-EU in Leg 1 and EU-to-USA in Leg 2, viola this becomes a global crossborder payment system, why does article restrict it to EU / Europe by saying "connected domestic payments schemes across Europe"?

Great post! Kudos for covering an oft-ignored topic.  

Your last use case of matching payments with invoice is a big pain area for many of our customers. Like in other countries, I'm guessing Belgium also faces this common problem where supplier raises invoice for 100 but customer pays only 80 out of it. Does the present "checksum method" in Belgium handle that - or does this cause yet another RECON challenge?

While Google is great for searching and indexing the world wide web, it sucks when it comes to single site search. Exhibit A: Google has withdrawn many single website / enterprise search products like CSE, GSA, etc.

I wonder how single enterprise Gen AI would work.

Like if I upload my bank statement to an LLM, will it be able to tell me how much fees I paid my CA Firm during the last three years?

Anyone knows how OCTInst is different from SCTInst? 

AUTHOR'S NOTE: I made slight edits to increase clarity of the definition and example for Embedded Finance.