In the US, a McKinsey report commissioned by the Federal Reserve Bank found that the introduction of real-time payments would reduce the use of checks by a third. In Australia, meanwhile, the Society for Interbank Worldwide Financial Telecommunication (SWIFT) has recently won a 12-year contract to build a real-time payments system that is expected to be launched in 2017. The solution will incorporate a domestic messaging channel as well as a payments gateway handling clearing and settlement flows. In a press release issued in December, SWIFT stated that 15 countries are currently operating domestic real-time retail payments systems while a further eight countries are either considering adopting such a system or already in the process of launching one.
With SEPA now a reality, European countries are also increasingly focusing their attention on real-time payments. “We are seeing some real-time initiatives starting,” says Michael Knetsch, head of Western Europe cash product at RBS. “In the Netherlands, for example, retailers that are doing business during the weekend or overnight want to receive their funds directly on their accounts and be able to use those funds immediately. In Finland there’s also an initiative to look at twenty-four/seven payments.”
However, as Knetsch points out, real-time payments have to be tackled at a Europe-wide level, which is not easy. “A European-wide twenty-four/seven scheme isn’t possible at the moment, because there are no suitable interbank instruments,” says Knetsch. “In the UK, of course, Faster Payments is already a twenty-four/seven scheme that is in use.”
Wandhöfer says that the current debate around “instant payments” appears to be the next big step for SEPA in Europe. “It is not yet clear how, when and what will have to be delivered, and from some feedback [it appears that] the demand side is currently not united on requiring a pan-European ‘instant’ SEPA, given other existing solutions,” she says. “EPC [the European Payments Council] and other parts of the supply side are investigating the feasibility and potential issues, keeping a close dialogue with the ECB, and will have to report their findings to the ERPB [Euro Retail Payments Board] in June 2015.”