Standardisation and convenience hold the key
The development of real-time payments schemes both in and outside Europe have brought fresh concerns of fragmentation to Europe’s payments
Seeing off this challenge to ensure cohesiveness will protect the harmony established by SEPA, while bringing greater speed and efficiency to payments processes, says Thomas Dolenga, global head of cash management product development at UniCredit
The shift towards faster payments created by the digital revolution and straight-through processing is set to gather pace as interest mounts in the latest development: instant payments. These bring the potential for faster and more efficient processes, yet standardisation and convenience will be essential in realising such benefits while maintaining a harmonised landscape.
The concept of processing and confirming payments within seconds of authorisation has already taken off, with a number of schemes taking shape around the world. Mexico and Singapore are both already operating real-time payments systems, while Denmark and Sweden are running similar operations in Europe.
While the prospect of instant payments promises to bring greater speed and efficiency to payments processes, it also brings the risk of fragmentation if countries are left to develop systems independently. This is a risk that Europe must take seriously – with the Single Euro Payments Area (SEPA) only recently having brought harmony to the continent’s payments landscape.
Given the momentum already behind the concept, the need for a standardised European system for instant payments is clear. This was the rationale behind the European Central Bank’s 2014 white paper, which calls for real-time Euro payments available at all hours of the day, every day of the year.