Instant payments

In a vision document published in late 2014, the European Central Bank has invited the supply side of the market to help achieve an open and competitive market for instant payments at a pan-European level through a reinforced co-operative approach among established and new PSPs.

The EBA considers a pan-European collaborative effort as the best way forward to respond positively to this call for action.

To contribute to this collaborative supply side effort, the EBA has launched an open forum to broaden the exchange with all stakeholders on this topic and to provide input into the upcoming instant payment scheme discussion in Europe.

The aim of this forum is to foster a practitioners’ dialogue amongst payment service providers and users at a pan-European level on instant payment service requirements. This dialogue is seen as a key step towards creating the user engagement and readiness needed for a successful end-to-end roll-out of instant payments.

Meetings

Terms of Reference

In the recent years, rapidly evolving technology and new customer requirements have driven a major innovation thrust in the payments industry. At this stage, it is generally understood that new payment services have to evolve towards immediate execution of payment orders followed by ‘quasi instant’ availability of funds for the payee.

As a result, various initiatives around the world have been launched with the aim of improving the efficiency and effectiveness of payment infrastructures, focusing mainly on enhanced speed, more transparency and convenience for the end user as well as an extension to 24/7 availability, both at a domestic and at a cross-border/global level.

On 12th November, the ECB issued an input paper for the ERPB, providing a definition of “instant payments” (24/7 availability, immediate reusability of funds and close to immediate interbank clearing), expressing an expectation for at least one pan- European euro instant payment infrastructure solution in the short-term. The paper further underlined the need to avoid the emergence of incompatible and nonstandardized solutions and the resulting fragmentation of the payment services market in SEPA.

With its background as an association bringing together payments practitioners, the EBA wishes to contribute to the formulation of a response from the supply side for the creation of a pan-European solution for Instant Payments processing.

The Euro Banking Association will provide industry practitioners with a forum to foster a dialogue around the topic of instant payments, where industry stakeholders can raise, discuss and exchange information on the challenges of an industry wide movement into (near) instant processing of payments. Items to be addressed comprise requirements of customers, the demands on (central) infrastructures, PSPs as well as other SPs as well as compliance with regulatory bodies’ requirements and expectations.

The open Forum on instant payments aims at facilitating a common understanding and clarification in the collaborative domain in view of preparing for migration to future payments processing, in particular the move into real-time.

The Forum will in particular serve to:

  • Foster a practitioners’ dialogue amongst PSPs at a pan-European level on Instant Payment service requirements;
  • Facilitate a dialogue with other stakeholders;
  • Understand the perimeter of a new collaborative space for infrastructure services to support Instant Payments;
  • Provide input into the up-coming Instant Payment Scheme discussion in Europe;
  • Liaise with EPC;
  • Liaise with industry initiatives and also at a global level.

The Forum might decide to publish common understanding and insight on certain topics and issues to the wider market, based on an endorsement by a majority among the participants. Such communication would list the names of the PSPs endorsing the position.

The Forum is open to PSPs, users, suppliers with a special focus on payments and operations, as well as relevant stakeholders in the European and global payments industry.

The EBA will provide administrative and logistical support to the Forum, and will propose a Coordinator of the Forum. The Coordinator will support the forum by, inter alia, issuing calls for meetings and proposed agenda’s. The Coordinator will prepare reports on discussions and activities of the forum as appropriate.

The Forum meets in principle on a bi-monthly basis.

With the migration into Instant Payments processing being a long-term endeavour for the industry, the Forum will continue its activities along the design, implementation and migration period for “instant payment processing” and will be disbanded if and when its participants decide that it is no longer needed.