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Lu Zurawski
Lu Zurawski - Lu Zurawski - London 24 October, 2014, 17:27Be the first to give this comment the thumbs up 0 likes

Nice article Tim. But beware the cause-effect fallacy. Is it possible that countries with a rising GDP created Real Time Payments infrastructure because they had growing economy (and not the other way around)? Burt regardless of whether it is a cause or an effect, RTP looks like a pretty logical argument to me.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 27 October, 2014, 07:36Be the first to give this comment the thumbs up 0 likes

Having been involved in one of the first FPS programs in UK, I've a lifetime's worth of FPS / RTP Kool-Aid to drink but facts are facts:

  1. USA already has an RTP for domestic payments. It's called FedWire
  2. USA has the world's largest GDP
  3. Not sure if politics had nothing to do with the failure of the last attempt at creating an FPS-equivalent in USA 2 years ago. From what I recall, the decision to scupper the proposal was taken by banks.
  4. Left to banks, RTP wouldn't have happened anywhere e.g. FPS in UK was mandated by OFT, not the then APACS; NEFT in India was mandated by RBI, not IBA. Likewise, it will happen in USA only when it's mandated by the regulator ("politician"?). Not sure whether that's even possible under the current payment structure of USA (Banks-Fed-NACHA-etc.).
  5. Since the cost of FPS was incurred by banks, not by the nation, I see no logic in dividing the figure by GDP while arriving at the trivial-sounding GBP 2 number. I don't have the figures handy but it's safe to assume that the cost per bank account would be closer to GBP 100 than GBP 2. Can banks get away by passing on this kind of cost to each accountholder? Therein lies the rub with any FPS-type of RTP: It can't be justified by business case - it will only happen by edict. 

Much as I'd love to claim otherwise, RTP is just one of the dozens of things impacting GDP.