A new payments era is here, and it’s real time


September 2018

New payments providers, platforms and tools are launching all the time – making way for a new era of payment services for consumers and businesses which are faster and more convenient than ever.

The concept of payment has evolved significantly since its inception. Over time, we have moved from the exchange of physical items (grain and livestock) to tokens (coins and bank notes) to cash pooling (bank accounts and deposits) to cashless payments (credit cards and e-wallets). But now, the pace of change seems to be accelerating at an unprecedented rate. Payments are now taking place instantaneously, 24 hours a day, seven days a week. The trend is particularly evident this year, as three new major real-time payments schemes worldwide went live. Many more are set to follow.

Experts believe that instant payments will come to revolutionize all facets of the payment chain and serve as the catalyst for a new wave of innovative banking services. However, as Mehdi Manaa, deputy director general of market infrastructure and payments at European Central Bank, warns, instant payments will not become the new normal unless all market participants and technologists collaborate and pursue the same objective. So how should banks proceed?

In this Efma digest, we highlight how real-time payments are making their mark on the entire payment value chain. Over five parts, we look at how the global payments landscape is evolving, what opportunities real-time payments provide, how leaders are driving adoption and what challenges need to be overcome along the way.

Finally, we take into account some of the key considerations banks need to make as they look towards an instant future. Because although the technology may be there, there are plenty of areas for them to manage as they prepare themselves for real-time operations. They should also assess the benefits of partnering – both with their peers and wider industry players such as fintechs – to foster innovation and develop industry best practices.

© An exclusive paper strictly reserved for Efma members only

Keywords : Digital payments/Wallet , P2P payments/Money transfer