The Euro Banking Association is floating the idea of developing a mechanism for accepting corporate Internet payments via a new payments gateway provisionally dubbed Step 3.
Step 1, the EBA’s clearing system for single payments, is due to start live operations next week. Step 2, the pan-European ACH for interbank bulk euro payments is scheduled to go live next April and has recently begun pilot trials with 32 banks.
The Step 3 STP payments gateway is intended for capturing customer payment orders, warehousing them and, upon authorisation by the bank, routing them directly to the requisite payment processing platform.
The EBA says the idea behind Step 3 is to further reduce banks’ operational costs and risk in processing customer payment transactions. Additionally, it may serve as a technical base for developing “e-commerce oriented payment solutions and value added services”.
The EBA believes the consortium may be best placed to pick up the slack in the e-payments arena as banks drop their own inhouse developments. The pan-European payments organisation says the idea remains at a high level conceptual level but would represent a natural evolution for the Step payments programme.
The issue of corporate Internet payments was addressed at the Swift international bank show in Geneva, Wednesday. Chairing the debate, Nick Viner, responsible for the global payments practice at the Boston Consulting Group, said that so many banks have had their fingers burned on Internet-led payment developments that the mere mention of the e-prefix in many institutions is enough to get the perpetrator sent to the equivalent of corporate Siberia.
Roberta Arena, global head of e-business at HSBC retorted: “We may be in corporate Siberia but I can assure you that we have got a large portion of our customers using the Internet.”
She says the biggest push for e-payments is coming from the personal and smaller business sectors. “This particular technology will move outside of the province of the big guys in the future,” she said. “The importance of the small to medium-sized business will come to the fore because the technology is easier for them to get a hold of than previous technologies, and that’s a problem for the banks.”