With progress towards a single euro payments area well in train, the European Central Bank has identified instant payments with immediate availability of funds as the industry's next frontier for harmonisation and cross-border collaboration.
In its second meeting, on 1 December 2014, the Euro Retail Payments Board (ERPB), a multi-stakeholder group chaired by the European Central Bank (ECB), decided to step up work on the topics of instant payments in euro, and person-to-person mobile payments and contactless payments.
Taking stock of the migration to the Sepa, the ERPB also published a set of recommendations to address some remaining issues in the credit transfer and direct debit schemes, for instance with the move to Iban only and the harmonisation of payment standards between banks and customers.
In the area of instant payments, like the UK's Faster Payments scheme and Denmark's recently inaugurated RealTime24/7 system, the ERPB is concerned that the emergence of new domestic platforms might end up creating a fragmented market in Europe for instant payments, similar to what existed in regular payments in the past.
Yves Mersch, member of the ECB's Executive Board and chair of the ERPB, comments: "Solutions for instant payments should avoid the 'silo' mentality of closed systems that don't communicate with each other, and take advantage of the harmonisation and integration already achieved with the SEPA project."
The development of person-to-person mobile payments in euro may depend significantly on the availability of instant clearing services, he noted.
Taking into account emerging national solutions, the members of the ERPB agreed on the need for at least one pan-European instant payment service for euro open to any payment service provider in the EU and called on the banking industry to make an assessment of the issues to achieving such a scheme for presentation to the Board in June 2015. In so doing, the banks would be expected to consult with demand side with the active involvement of the European Payments Council as a potential scheme developer.
The ERPB in May annnounced plans to set up two working groups to focus on P2P mobile payments in euro and card and mobile-based contactless payments across the euro zone. The Board says the P2P group is set to report back with its findings in June 2015, while the contactless council will deliver its recommendations in November 2015.