Instant Payments: A Global View

Table of Contents

Table of Contents

EXECUTIVE SUMMARY

1.1. Definition of instant payments

1.2. Key findings

1.3. Critical success factors

2. KEY TAKE-OUTS

2.1. Why develop an immediate payment system?

2.1.1. Instant payment is the catalyst for the future of banking

2.1.2. Cost savings from immediate payments will come first, revenues later

3. REAL-TIME RETAIL PAYMENT SYSTEMS

3.1. The digital economy has led to the implementation of instant payments in most markets

3.2. Definition of key terms

3.2.1. Real-time retail payment system vs real-time gross settlement

3.2.2. Instant payments

4. THE NEED FOR INSTANT PAYMENTS

4.1. Why are instant payments being implemented?

4.1.1. Central banks are largely behind the push for instant payments

4.1.2. The rapid development of communication technologies brings new possibilities for payments

4.1.3. Instant payment systems provide an opportunity to upgrade security

4.1.4. Consumer non-cash payment volumes have risen at a rapid rate, straining older systems

5. INSTANT PAYMENTS AROUND THE WORLD

5.1. Asia Pacific

5.1.1. Japan led the world in faster payments but with a system that was limited in scope

5.1.2. Instant payment development in South Korea was influenced by its electronic industry and government

5.1.3. Economics determined the need for instant payment in China

5.1.4. India hopes to reduce dependence on cash through instant payments

5.2. South America

5.2.1. Brazil-SITRAF (02)

5.2.2. Chile-Transferencias en Linea (08)

5.2.3. Mexico-Sistema de pagos electronicos interbancarios (04)

5.3. Middle East and Africa

5.3.1. South Africa-Real-Time Clearing (06)

5.3.2. Nigeria-NIBSS Instant Payment (11)

5.3.3. Turkey-Retail Payment System (12)

5.4. Europe

5.4.1. Denmark wanted a platform that could make P2P payments in true real-time

5.4.2. Poland offers two instant payment platforms

6. INSTANT PAYMENT IN THE UK, SINGAPORE, AND SWEDEN

6.1. UK: Faster Payments Scheme

6.1.1. Credit transfer usage has grown by almost % since the inception of Faster Payments

6.2. Background

6.2.1. Cash and cheque P2P transfers are decreasing, largely due to the FPS

6.3. Singapore: Fast and Secure Transfers (FAST)

6.3.1. FAST brought true instant payments to Singapore, accelerating the shift away from cash

6.3.2. The FAST platform includes push and pull credits, increasing payment flexibility

6.3.3. Background

6.3.4. FAST: participating banks

6.3.5. FAST is driving innovation in the payments market

6.4. Sweden: Payments in Real Time (BiR)

6.4.1. Payments in Real Time is a big step towards a cashless society

6.4.2. Background

6.4.3. P2P payment was the key overlay of the BiR system

7. THE AUSTRALIAN NEW PAYMENT PLATFORM

7.1. The NPP should hit the ground running when it launches

7.1.1. The New Payment Platform is seven years in the making

7.1.2. The New Payment Platform will propel Australia closer towards being a cashless society

7.2. The NPP will bring greater competition in e-commerce

7.2.1. The NPP can work with new digital wallets such as Afterpay and ZipPay, giving rise to disintermediation in e-commerce

7.3. Rising P2P payments in Australia highlight the need for instant payment infrastructure

7.3.1. NPP participants

8. APPENDIX

8.1. Abbreviations and acronyms

8.2. Methodology

8.3. Bibliography

8.4. Further reading

List of Figure

List of Figures

Figure 1: Innovative banks are highly valued among consumers

Figure 2: Sweden's Swish app can earnUSD0.17-0.23 per SME transaction

Figure 3: There are numerous instant payment services now operating worldwide

Figure 4: Electronic transfers are forecast to reachUSD1,222.3tn in 2017 for the 73 markets covered

Figure 5: Payment settlement platforms needs to be prepared to handle greater volumes

Figure 6: Most countries still do not have an instant payment system in place

Figure 7: Cash transactions remain the preferred transaction method in Japan

Figure 8: Electronic payment transfer in South Korea has been reducing the use of cash

Figure 9: Electronic transfers in China are still small in comparison to cash, but are rapidly gaining market share

Figure 10: Cash use in India is stalling as banking and payments are becoming more digitized

Figure 11: Instant payments drive growth in electronic payments

Figure 12: After almost a decade since implementation, FPS is still growing at a fast pace

Figure 13: The convenience of instant payment is driving P2P payments

Figure 14: Credit transfers saw a marked increase after the launch of FAST in Singapore

Figure 15: The frequency of P2P transfers has increased

Figure 16: OCBC's Pay Anyone app was the first in the market to enable purchases without needing their bank details

Figure 17: BiR has accelerated the trend towards a cashless society in Sweden

Figure 18: P2P payments are becoming more frequent as the friction has been taken out of transfers

Figure 19: Swish has already built its user base and is now focusing on improving functionality in the P2B market

Figure 20: Osko offers fast, secure instant payments with messaging capabilities

Figure 21: Australia is shifting away from cash use already; the NPP launch will only accelerate this

Figure 22: The NPP will be an instant hit in Australia as P2P payments are mostly done by bank transfer

List of Table

List of Tables

Table 1: Participating banks of the Faster Payments Scheme

Table 2: FAST coverage encompasses all domestic and major foreign banks

Table 3: New Payment Platform members