The development of EBA Clearing’s RT1 platform has reached critical mass in Finland with the support of the country’s six major banks, says the payment service provider’s CEO Hays Littlejohn.
“It’s not as though we made any kind of particular effort just for Finland, it’s more that those banks chose to come to us all at the same time and to prepare at the same time,” says Littlejohn.
“What we thought was important about it was enough of the banks participated around the same time to be able to enable a critical mass and to allow the business to grow there much faster,” he says.
On May 8, EBA Clearing announced the connection of Nordea bank, Danske Bank A/S Finland Branch, and four others to its RT1 platform, which supports payment service providers (PSP) in transferring euro transactions between payment accounts.
But Littlejohn says it’s up to those Finnish banks to make the most out of the connection to the platform.
“Finland is similar to many Nordic countries in that it is very used to electronic payments there, and instant payments really allows them to take the next step,” says Littlejohn. “One of the next steps is there are a number of legacy instruments that they are looking to migrate and move a little bit into instant payments.”
“Once the rails are there, which we have provided and which they have joined, then it is really up to them how they are going to use it, and how they are going to develop products and services on top that their customers are asking for.
“It is important to realize that it does take time before what is enabled by the infrastructure is fully available in the form of products that people can use on a day to day basis and appreciate fully.”
Speaking at a fintech conference in February, the European Commission vice president Valdis Dombrovskis, said the Commission was considering whether a greater regulatory push would speed up the uptake in instant payments across Europe, and proposed that a review of the Payments Account Directive could lead to more concrete action.
“The Commission has already put in place EU-level regulation, and supported infrastructure to allow pan-European payment solutions to emerge. It is now for the market to develop these solutions, and speed is of the essence,” said Dombrovskis.
“Our objective could be that within a few years, citizens can use instant payments in euro across borders like they use cash, bank transfers or cards today. But of course, this requires common standards, and a commitment by market operators to use them,” he said.
Similar moves in instant payments have happened in Germany and Italy, according to Littlejohn.
“A few months ago, we had a similar situation where enough banks in Germany have joined the system to be able to create a critical mass there, so that is the other place that you would see more of an uptake. When the system went live we saw similar moves in Italy, and those are three of the places that we are seeing a lot of uptake, in addition to the Baltic region,” he says.