The payments world is turned upside down. If you take a look at how the financial industry is actually going to reinvent payments, nothing will be as it was before and as you once may have learned to deal with.
Payments then and now
In the early nineties payments have been processed within several days and cross-border payments in Europe took 5-7 days or even longer. After introducing the single currency in Europe and setting the Single Euro Payments Area (SEPA) into force, the settlement time for mass payments was limited by law. As a matter of fact, SEPA credit transfers must reach the beneficiary latest working day after initiation.
But there’s more to it than that: Instant payments can now be initiated within 24 hours, 7 days a week and on each day of the year. Clearing and settlement mechanisms operating in realtime have already been established in Europe (EBA Clearing RT1 / Target Instant Payment Settlement TIPS) and are prepared to process the fastest credit transfer ever.
If you would like to initiate a payment on Sunday night, feel free to do so
Instant payments will be processed and funds made available to beneficiary parties in less than 10 seconds. More and more banks in Europe join the so-called SCT Inst scheme and are going to offer Instant payments to their private and corporate clients. European-wide reach will however take some time, but national Central banks like Deutsche Bundesbank as well as the European Central Bank and the EU commission will closely monitor the Instant payment rollout with a critical eye.
In the opinion of central banks and major market players, Instant payments could replace the existing „D+1“ clearing one day and become „the New normal“.
A transformation is also happening in the cross-border payments area.SWIFT is driving this transformation together with their member banks by innovating global payments. Worldwide payments should be fast, transparent and trackable. Corporates and especially their treasury will benefit from the new product by gaining full visibility into their international payments.
SWIFT Global payment innovation – gpi – will deliver the digital transformation for cross-border payments and that is expected to become a success story.
Latest developments in payments, insights and all details behind Instant and Global payments, clearing and settlement as well as the migration to ISO 20022 (XML) formats will be brought to you by selected English-speaking modules from Frankfurt School’s certification programm Certified Payment Professional.