EBAday 2023: Customers expect instant payments today

 Moderator Pilar Claveria, payments advisor, Spanish Banking Association, was joined by panellists Marianne Demarchi,chief executive Europe, Swift; Simon Eacott, head of payments at NatWest Group; Marianne Pauwels, senior vice president, product management, Mastercard Cross-Border Services; and Marc Pomes Bordedebat, senior product manager in Euro clearing solutions, European financial institutions product and propositions and global payments solutions, HSBC Continental Europe.

This panel brought their depth of experience to discuss the progress made in existing cross-border payments initiatives and how regional initiatives fit into a global context. Claveria opened the session with some of the current background in the position of instant cross border payments. While we may not be quite there yet, Claveria pointed out the “strong political will to make payments around the world in seconds.” She further added that in this current climate, this is something “customers are also expecting.” 

Demarchi took off from this political point, mentioning how seriously the G20 are taking on the task of instant payments. She commented that looking at what has been achieved so far in cross-border instant payments, there has been “huge progress and success in some areas and some remaining challenges in other areas.” 

Eacott followed up on these challenges by saying that while there is a lot of progress that has been made, he would like to see more development into making cross-border instant payments “very customer centric.” He continued: “Our job as payments is to make sure we reflect what that customer need is. Do I see a vision where all cross-border payments are instant, I certainly think that they should have the capability of being instant and then building propositions from there.” 

Pomes Bordedebat argued from a global banking perspective that “we see real time or instant payments flourishing in different geographies across the group. […] In other markets, you need to sit back and see whether the initiatives make sense for your customer base.”

He continued that for example, “if you're banking with corporates, for example, most of the time, these are preprogrammed payments and what corporates need very often is predictability and visibility of where the funds are and the time it takes to get there. To a certain extent instant-abilityis less important than the certainty it is going to get to the beneficiaries on the other side.” 

Pauwells argued that it will in the future: “it’s possible, at least in terms of speed, to have an experience that is similar to the domestic experience if you have a system in the middle.” 

She later concluded: “There's always going to be differences and data requirements and we have to aim to standardise, but I don't see that happening all over the world and therefore we need to look for interoperability solutions that can take care of the differences in format and the differences in screening and data requirements and shield the consumer as much as possible from these discrepancies, that friction it's not possible to do it entirely.”

This session was followed by ‘Payments processing – from commodity to business opportunity?’, looking at the hot topic of Payments as a Service (PaaS). 

This panel was made up of Sheri Brandon, chief market officer financial services, Worldline; Rachel Hunt, head of strategy and growth, Volante Technologies; Guy Moons, head of solution consultants, FIS; Juan Olaizola, CEO, PagoNxt Payments (a Santander company); Craig Ramsay, global innovation and partnership lead, GLCM, HSBC; and was moderated by Gijs Boudewijn, general manager, Dutch Payments Association. 

This varied panel discussed some of the different perspectives on PaaS. Ramsay described three pillars of a PaaS system: the corporate pillar, which is the venue where the payment actually happens; the banks, they hold the money; and in the middle there is everybody else, this could be infrastructure or SaaS. He argued that when discussing PaaS it is “about taking away the friction by solving a real customer pain point.”

Olaizola argued for the necessity of PaaS, saying “the complexity of managing payments is huge. If we have this problem, everyone in the industry has this problem. You cannot keep tackling this situation country by country. You need to move everything to a single platform and get to a level of abstraction on payments.”

Brandon concurred on this point saying, “[PaaS] is removing all the hassle for a bank. Not those as big as HSBC, because that's your core business. But banks where repayments are not the core business. We look at your business model and become relevant to get real customer.” 

Hunt countered this point and argued: “I don't think it's the size of the bank is how important payments is to your core business. It could be a smaller bank, where payments is very important. But just try and think about where are your common challenges and maybe start with simplifying the pre-processing side of it.”

Hunt continued by saying that “there are some commonalities that you can start thinking about, and despite the fact we have ISO20022, we have many flavours of ISO20022. You can start coming to a common set of standards and APIs which helps us.”

Moons argued that you need to look at your PaaS needs from two points of view. “For the customer, you want to give them a seamless experience across whatever channel they come to you with whatever payment they come to you for. That's where you have your bank's corporate identity. If you look at the other side, where you have the bank, then you are more looking at the most efficient and most standardised ways of processing that payment in the cheapest way so that you can make most of the value to your end consumer.”