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Crafting a unique instant payments business case by shifting mentalities

Crafting a unique instant payments business case by shifting mentalities

As fully-digital customer experiences and faster funds transfer are now essential elements of business continuity and resiliency, it is clear that the global impact of Covid-19 is working to accelerate instant payments adoption.

Implementing instant payments must now be a strategic priority for firms across financial services, with implications for each firm as well as the broader payments ecosystem. The approach to implementation and the process of identifying and selecting an appropriate service provider are therefore of critical importance.

However, while crafting a strong case for the adoption of instant payments is critical to gaining internal support within an organisation, the instant payments business case does not fit the typical mould. A recent Impact Study by Finextra Research and Volante Technologies, ‘Instant Payments: Why Covid-19 is Bringing the Roadmap Forward’ explores this issue and how FIs should frame an instant payment business case to amplify opportunities and maximise returns.

Internal conflict about how the instant payments business case should be designed remains problematic and traditional transaction revenue models fail to address the unique offerings instant payments presents. Co-ordinating internal objectives during the battle for resources brought on by Covid-19 may appear to be an unwinnable battle.

Yet, the global crisis underscores the fundamental need to prioritise instant payments integration in order to solidify future business continuity. The answer lies in a change of mindset: instant payments are not just a new payments type, and adopting instant payments is not just a matter of running a payments project and creating another silo.

Rather, instant payments are an opportunity to change mentality and allow technology to drive a new way of doing business. By eliminating the inefficiencies of the typical bank payments operations and functional departments, which often waste resources in complex back offices, banks can instead focus on expanding their business by offering new services.


Also imperative is a clear understanding of how instant payments and the new services which will grow within its ecosystem will work to generate value for the firm into the future. With the increased use of ISO 20022, financial institutions can monetise vast amounts of rich data by using data aggregation and enrichment to personalise services for consumers and corporations, therefore maximising the value of their investment in instant payments.

An example of this potential is in the uptake of smart contracts. The combination of smart contracts with instant payments means that self-executing contracts which are stored on distributed ledgers can automatically execute payment processing - once necessary conditions are met. This works to reduce payment processing errors and accelerates not just the payment transaction, but the mission-critical business processes around it.

Request to Pay (R2P or RtP) schemes illustrate another area set to transform the payments landscape which fundamentally relies on instant payment systems, allowing the immediate release of funds on request, and the seamless linking of the payment request with the actual payment. Widespread interest surrounds collection capabilities.

With EBA CLEARING and Pay.UK’s Request to Pay solutions scheduled to go live during 2020 or 2021 (pending Covid-19 pressure), and the centrality of R2P to the proposed P27 Nordic cross-border payments network, financial institutions would be wise to incorporate the technology into their infrastructure as a point of differentiation or risk losing customers to more innovative competitors.


Understanding where banks stand in their journey toward implementing instant payments is vital to assist in identifying their needs and objectives particularly in the current climate. A clear way to categorise banks is to view them across a series of ‘tiers’ which indicate their project status. For example, for ‘higher tiered’ banks which have already connected to instant payments, Covid-19 may slow developments around overlay services or innovations in the near term.

However, as these firms have already modernised their core system infrastructure, they are able to continue their 24x7x365 operations unimpeded, with an eye to refining the processes already in place. For ‘lower tiered’ banks yet to deploy their strategy it is essential to approach instant payments differently from typical technology projects. As noted already, the key is taking a different mindset in business case formulation based on instant payments, as part of an overall digital transformation and service strategy.

Once this mindset shift is in place, it will be clear that while a carefully considered cost benefit analysis is still vital, intangible factors like opportunity cost, business continuity impacts, and competitive differentiation will bear greater influence on the analyses. In particular, revenue projections will necessarily take a back seat to more subjective considerations, as compared to a typical payment product integration scenario.

The cloud can be a key factor to delivery of the instant payments business case, with its attraction lying in its ability to expedite time to market for new services while streamlining the integration of new technologies. Read more about how the cloud works to build resilience into the instant payments business case here.

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