According to Stoddart, data-only transactions will become the primary area of focus in payments as the adoption of open banking has caused a decline in payment-focused data transfers.
“The payment transaction itself becomes arguably more and more commoditised … There’s so much data/information available, around that needs to be the right controls, the right security, the right permissioning frameworks and so on. And the transactions themselves, if indeed a payment is requested or initiated at the end of that, it’s kind of a by-product.”
Historically payments data has travelled on a separate path to the payment.
David Watson, chief strategy officer, Swift agreed that innovation focus has moved away from payment transactions themselves.
“The evolution from messaging towards the direction of transaction management, allowing players to access data at the same time rather than sequentially, to understand always the integrity of that data … is critical,” he said.
“The role we can play as really driving the fundamental facilitation of instant and frictionless transactions across financial markets for us is incredibly key.”
While data management falls into focus, payment providers play a crucial role in transaction resilience.
“The revolution if there is one is likely to be in the data rather than necessarily in the payments, but that then puts an added impetus on us payment technology providers to make sure that just works, because the tolerance level for problems within part of a solution that just have to work will reduce even further,” said Stoddart.
“Resilience and the ability to recover from an issue when it happens and how quickly can you recover, how quickly can you make available those services and also how do you provision for significant uptake and usage of the service – oddly enough that’s a risk that we’re seeing more than we’ve seen before.”
While the move to transaction management will improve payment efficiency, some panellist believe cross-border payments will never be as efficient as domestic payments.
“With more and more people moving globally and relying on cross-border payments, we really do need to improve the situation. I’m not sure they’ll ever get to be quite as strong as domestic payments,” said Victoria Cleland, chair, Committee on Payments and Market Infrastructures (CPMI) Task Force on cross-border payments.
Citing CPMI findings, she said the UK saw a reduction in both cross-border and domestic payments during coronavirus.
“Just because the cross-border payment numbers seem to be going down at what is a very challenging time for the whole economy, it doesn’t mean that we shouldn’t be there to really try and solve them,” she said.
“As economists try and recover from the pandemic, I think it’s going to be even more important that the payments systems are there to support and remove frictions and make things better and not in any way be seen as a hindrance.”