The Payment Conference at the 21st Euro Finance Week
After the PSD2 is before the PSD3
Also this year, we played a major role in organizing the Payment Conference at the 21st Euro Finance Week in Frankfurt. There was a big crowd at our stand. The almost famous coffee machine had to show what it could do. You pay with Instant Payments, which is cleared via RT1, in 2 seconds.
The Payments Conference was opened by Burkhard Balz, the new board member of the Deutsche Bundesbank responsible for payment transactions. Europe is accelerating its processes in payment transactions and Instant Payments. Open APIs are coming. This will result in new services. The account and thus the institute will once again become the focus of attention. But there have also been words of warning, so we must not ignore security. Not all people are digitally affine and we should not lose sight of these people.
There was a surprise in the online voting among the audience. There was a clear vote on the question of whether real-time or batch processing would prevail in the future. 2/3 of those present voted that real-time and batch processing would continue to be run in parallel for a long time. Nevertheless, the prevailing opinion was that Instant Payments would become the new norm.
Armin Gerhardt moderated the final discussion with Norbert Hambloch (STRABAG PSF), Katja Heyder (EBA Clearing), Dr. Heike Winter (Deutsche Bundesbank) and Dr. Ernst Stahl (ibi research). RT1 is developing well with around 70,000 transactions per day. Of course, it is still far below STEP2’s daily 17 million SCT transactions. But Instant Payments is more than just a new format, it is a new marketplace. PSD2 is an opportunity for the financial industry and this marketplace needs PSD2 and Instant Payments together. Currently, every fourth euro is spent on digital marketplaces. But Paypal, for example, has no principle of dual control, so it is not an option for many corporates. So we need an ecosystem for Instant Payments and PSD2. Remarkable was the answer to the question to the audience who has ever paid with Instant Payments. Exactly one person responded. Nobody had any practical experience with PSD2.
The amount limit for Instant Payments is handled differently for RT1 and TIPS. RT1 introduced a Closed User Group without an amount limit at the beginning of November. Sender and recipient must be members of this Closed User Group so that the amount limit is no longer applicable. TIPS does not control the amount of Instant Payments, but the recipient bank can reject the payment. The Deutsche Bundesbank will also provide a proxy service where a telephone number can be assigned to an IBAN. This will make it easier to make payments via a telephone number.
But what comes after Instant Payments? The predominant opinion sees a Request-to-Pay on the horizon. For online merchants, Request-to-Pay could simplify the payment process. The discussion about Request-to-Pay has begun. But one thing is clear: after the PSD2 is before the PSD3. And so we are already looking forward to the exciting discussions at the next Euro Finance Week in Frankfurt.