Instant payments, or how consumers can benefit from Open Banking
Earlier in May, ETPPA (European Third-Party Providers Association) shared its updated position on the required Instant Payments key features, while providing additional comments.
“Account-to-Account payments have best in class built-in protection”
For IP to be successful and adopted in Europe, it needs to have the consumers’ trust and confidence. They need to be reassured when it comes to protections they are offered.
As ETPPA highlights, “two decades of SCT-based retail payments in the Netherlands, Germany, Austria, and the Nordics have shown that consumer protection in account-to-account retail payments is already very high”. Further measures aiming at improving protection are needed, yet, they should not create unnecessary obstacles in the payment flow.
“Instant payments should be free for consumers”
On the topic of fees, ETTPA highlights that those are currently supported by consumers, varying from nil to as high as 8€ par transaction. These are significantly higher than other payment methods: TPPs and consumer groups see it as an important obstacle that needs to be overcome.
“We believe that there are options to cost-recovery, which do not involve consumers paying fees, for example using an overlay scheme like the upcoming SEPA Payment Account Access (SPAA) scheme. For IP to become the new normal, there cannot be any “transaction fee” for the consumer”.
“All ASPSPs offering any form of credit transfers should be obliged to provide an IP alternative”
The press release underlines the potential of Instant Payments to establish a much more competitive European payments landscape, being particularly relevant for retail payments and therefore allowing independence from the currently dominating non-European cards and wallets.
IPs will become increasingly relevant for P2P, B2B and wherever credit transfers are currently used. “For IP to become the new normal, it should replace, or at least complement, any other form of credit transfers within the EU, either regional (SEPA) or national. Consequently, all ASPSPs offering any form of credit transfers should be obliged to provide an IP alternative. Hence, any adherent to SCT, should be obliged to adhere to SCT Inst as well”.
“Both sending and receiving instant payments must be supported”
The report highlights that “the use of IP in retail payments is currently limited, because not all payers can initiate an (outgoing) IP”. Payees, on the other hand, can simply choose one of the existing IP offering ASPSPs for the (incoming) IP, which is therefore much less of a constraint.
ETPPA recommends that if there was any phasing to be allowed, the priority must be on implementing outgoing IP first.
LUXHUB’s Ramzi Dziri explains that PSD2 efforts first focused on compliance and on increasing competition as well as innovation, and comments:
Several years later, we see that Instant Payments are putting consumers at the very center: from lower fees to security, it finally shows how they could benefit from using Open Banking-powered services
Source : ETPPA