EU pushes for cross-border instant payments

EU pushes for cross-border instant payments

The European Commission is hosting a roundtable in Brussels as part of an ongoing intiative to push the development and availability of cross-border instant payments for European consumers and businesses.

While instant payment systems spring to life in domestic European markets, the goal of an interoperable cross-border network for consumers and businesses in the EU remains a distant goal.

The event in Brussels is being organised together with the European Central Bank in an effort to identify ways to overcome existing obstacles to harmonisation and to ensure cross-border reach of instant payments.

The issue was a big topic for discussion at the annual EBAday conference of payments and transaction bankers in Stockholm last week, where the Scandinavian P27 model was under heavy scrutiny.

However, many bankers in attendance had more pressing issues to deal with in their own national markets, with concerns around liquidity management, credit risk and maintaining security of funds in frictionless payments bubbling to the surface.

The ultimate objective of the Commission is to have pan-European instant payment solutions, such as paying for goods with a mobile device or allowing money to move from any account to any account, anywhere in Europe in real time and 24/7.

Valdis Dombrovskis, the EU Commissioner in charge of financial services says: “Europe now has a unique opportunity to design a truly European payment solution. I fully support the instant payment initiatives already launched in many Member States. We now need to make sure that we quickly develop a truly European market for payment so that it brings maximum benefits to European consumers, retailers and service providers, and empowers European companies to compete on global markets.”

Comments: (6)

David Gyori
David Gyori - BANKING REPORTS, LONDON - London 24 June, 2019, 11:38Be the first to give this comment the thumbs up 0 likes

This system should already exist. It is vital and makes perfect sense. In case this system is set up, it is a great competitive advantage for Europe. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 June, 2019, 13:581 like 1 like

Cross-border instant payments for European businesses already exists. It's called TARGET2 and it has been around for ~10 years.

David Gyori
David Gyori - BANKING REPORTS, LONDON - London 24 June, 2019, 15:06Be the first to give this comment the thumbs up 0 likes

Yes, but the average transaction size of TARGET2 is EUR 7mn approximately. So this is for corporates. 

Bianca Maria Morandi
Bianca Maria Morandi - Intesa Sanpaolo.Spa - Milano 24 June, 2019, 16:511 like 1 like

@Ketharaman, Target2 is not instant at all. It is faster but not instant (such as SCT Inst in EBA which does exist, ot ECB's TIPS which is just kicking off).

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 25 June, 2019, 15:50Be the first to give this comment the thumbs up 0 likes

@BiancaMariaMorandi:

When I was involved in the implementation of TARGET2 for a Top 5 UK Bank circa 10 years ago, it was a realtime i.e. instant payments system. When I just checked, it's still an instant payments system. 

TARGET2 is the real-time gross settlement (RTGS) system for the Eurozone. (Source: https://en.wikipedia.org/wiki/TARGET2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 25 June, 2019, 15:57Be the first to give this comment the thumbs up 0 likes

@DavidGyori: 

I said TARGET2 is for "businesses". What's the difference between businesses and "corporates"?

Besides, notwithstanding the average TARGET2 payment value of €7M, fact is, "two-thirds of all TARGET2 payments (i.e. 68%) had a value of less than €50,000 each" (Source: https://en.wikipedia.org/wiki/TARGET2#Single_Shared_Platform). This figure is much lower than I'd imagined. So, I'm now tempted to claim that TARGET2 is also for Consumers, not just Businesses:).

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