A recent poll taken at the bobsguide Fintalk webinar, ‘Real-Time Payments: the growth opportunities and challenges’ revealed that 56% of the webinar audience would adopt real-time payments within two years.
Interestingly, a further 36% were undecided on adoption highlighting how pressing the conversation around real-time payments is.
“I’m not surprised by these results. They reflect the global diversity of the bobsguide audience, where many markets have had real-time capabilities for some time while other markets have not quite adopted it,” said panellist Victor Penna from Standard Chartered, Head of Treasury Solutions.
Australia recently released its New Payments Platform (NPP), The Clearing House Real-Time Payments launched in the US, while in Europe, SEPA Credit Transfer Instant similarly launched.
But Amy Beninato, Director in Global Transaction Banking for Deutsche Bank in New York, pointed out that in emerging markets, the technology by necessity had to “leapfrog” and replace current systems because they didn’t have the massive paper check clearing structure that has historically been the backbone of the US payments system.
“I think that the much wider use of the electronic mechanisms globally is one of the reasons that the US has lagged somewhat behind the rest of the world in developing real-time capabilities,” said Beninato.
Penna, from Standard Chartered, agreed going beyond the leapfrogging effect: “If you look at the earliest forms of real-time payments, they came out of the emerging markets. Kenya was the first to introduce the mobile payments system which has since been grown out to 270 mobile money and peer-to-peer systems.
“There was certainly a leapfrogging effect, but also a desire from the various governments to encourage innovation and provide low-cost clearing systems as part of their financial inclusion policy.”
A large portion of the webinar was dedicated to debating the opportunities of adopting real-time payments, particularly a submitted question from the audience: “what is the rationale behind the business case for investing now in real-time payments?”
Tristian Blampied, Pelican’s Senior Product Manager, approached the question by looking at the roll out of instant payments in the UK: “Not all of the banks were terribly happy about it – it was expensive, there was a lot of testing and implementation as well as the pushback questions, ‘what’s in it for the bank? What’s the take up going to be?’"
"But wind forward 10 years and instant payments in the UK has been an undeniable success. The take up and volume has been growing year on year. From the user perspective, be they consumer, small business and increasingly corporate, there’s an expectation that your banking providers can offer you instant payments and if they can’t, it’s seen as an absolute deficiency. The message is, go along with it or risk falling behind your competitors.”