Moderating the last panel of the first day of EBAday, Rita Camporeale, vice chair of the European Payments Council led a conversation on the OCT Inst scheme with Daniele Astarita, principal solution consultant of real time payments at ACI Worldwide; Damien Godderis, head of payments industry engagement - payments & receivables - cash management at BNP Paribas; Xavier Herrero, manager operations groups at CaixaBank; and Michael Knetsch, tribe lead instant payments, cash management at Deutsche Bank.
The EPCs new international instant credit transfer scheme (OCT Inst) officially launched in November 2023. Born out of a call to action from regulators, OCT Inst is designed to deliver more transparency, faster execution and better traceability to customers and PSPs alike.
Starting the session by discussing the scheme's impact on EU PSPs, Godderis explained: "First we have the transparency that OCT Inst brings to cross-border payments, so all the other interchanges know that it’s a cross-border payment and can act properly on it. The second aspect is the predictability. Then you have the costs - we all have the infrastructure to run the OCT Inst scheme and we can add flows to it, optimise it, leverage existing rails. And then the last element is access. But the key point to address is: how do we ensure adoption on a community level?"
The panel agreed on the benefits the scheme offers, but highlighted that, since it’s an optional scheme rather than a mandatory one, it’s crucial to have relevant use cases that drive adoption. Herrero shared the benefits of adoption he’s seen in Spain, where the community embraced the need for commitment of the whole community and pointing out that it’s always cheaper if you collaborate.
The panel then turned to the audience, asking what the decisive elements to join are. Over 80 responses came in, with the majority of answers relating to reach, transparency, business opportunities, as well as customer needs. Turning to the wider cross-border area, Camporeale then asked the panellists what the future of cross-border payments looks like.
In Astarita's view: "The International Monetary Fund recently released a tech note discussing the future of cross border payments, and CBDC is seen as greenfield for creating smooth, effective and efficient cross-border systems. It’s very much in the future, but it’s something that I’m very keen on and I want to keep in mind, using new mechanisms and new currency if we want to create smooth cross-border payments."
For Godderis, "it’s coexistence. You will not have one system that will replace every other system. Speaking the same language, being interoperable is really key. Every scheme has a use case, so how do we optimise?”
Herrero suggested that "not all payments will be instant. I agree with the objective of the G20 to make cross-border cheaper and more accessible. So we need to take action and get the closest we can to these objectives, not just because it’s a digital asset, but because it’s the way the payments are going.”
Knetsch added that “the future is already happening. We are looking towards a closed booked system, where we would fully do the KYC process, sanction screening. We have learned a lot from the cross-border system in Europe to help build the OCT scheme. Those are the discussions we are having: How do you interlink instant payment systems? But it depends on the use case."
Wrapping up the session, the panel discussed the common theme that weaved itself through all the panels on digitisation - finding space in the development calendar. There is an overwhelming amount of regulation in the space, and banks spend the majority of their time and budget on meeting regulatory requirements.
Finding the space for innovation is crucial, but with OCT Inst, Europe is at an advantage, because existing rails can be built on. In order to fully drive the scheme forward - the panel agreed - it might also be worth it to face a challenge and answer the question of ‘why not?’ first. Understanding the barriers to adoption can help us learn more than listing only the advantages.