The instant payment landscape remains very fragmented, with regional solutions like SEPA Inst, FedNow, as well as domestic solutions like PIX in Brazil, UPI in India or Faster Payments in the UK. Do you believe this fragmentation poses complexity and integration problems for banks and PSPs? Is a Global Instant Payments solution necessary / achievable?

The current fragmented landscape poses significant challenges in cross-border payments for banks and payment service providers (PSPs), including slower transactions, increased operational complexity, higher costs and lack of transparency. As instant payments become the norm, banks and PSPs must anticipate global real-time payments, and they should be prepared to facilitate seamless integration between global real-time payment systems, Central Bank Digital Currencies (CBDCs) and existing frameworks, ensuring a future-ready global payments landscape.

The area of global instant payments is high on the agenda of the G20 Financial Stability Board (FSB), which has set comprehensive targets based on 19 building blocks that focus on enhancing standardisation and infrastructure among other improvements to cross-border payments. Ongoing initiatives in cross-border payments aim to fulfil these targets. Bank of International Settlements (BIS) Innovation Hub’s Project Nexus focuses on creating an interoperable framework connecting national payment systems, with an upcoming live implementation with central banks across Asia announced in July. Other initiatives include the European Payment Council’s One-Leg-Out Instant Credit Transfer (OCT Inst) scheme, which enables 24/7 euro credit transfers between SEPA and non-SEPA countries.

Collectively, these efforts are driving the global payment ecosystem toward greater integration, efficiency and user accessibility, in order to meet the rising demand for instant, cost-effective cross-border payments.

Since its introduction, SCT Inst has seen slow adoption / growth, with only 17% of SCT transfers currently being instant. How do you see SCT Inst growth evolving with the new European Commission mandates?

We will see significant growth in instant payments due to the regulation. Initially, this will be driven by the mandatory provision of instant payments and lowered cost for the user. Early adopters of the newly mandatory instant payments are expected to start using the service in the short term once those measures are implemented next year. In the medium term, the service will become increasingly appealing to users, as a result of innovative offerings enhancing user experience.

Within the next five years, instant payments is expected to be established as the norm in the EU, and businesses and citizens in the EU will grow accustomed to using instant payments and receiving the benefits they provide.

Do you believe the deadlines imposed by the European Commission to send and receive SCT Inst and implement CoP are realistic? Do you foresee there would be resistance from the industry?  

The deadlines set by the EU Instant Payments Regulation are ambitious, and concerns about the timelines vary among banks and PSPs due to different phases of implementation and diverse strategies. Some banks currently do not offer instant payments, while others that do may lack the required setup mandated by the regulation, such as the introduction of Verification of Payee (VoP). When looking specifically at VoP, there is a large number of banks that need to be connected to the tool, and a real-time connection is required to all banks of all sizes, adding complexity to the implementation process.

If the mandated timelines are met with resistance by participants, it would be advisable for them to consider partnering with a specialised vendor for a Software-as-a-Service (SaaS) solution or a comprehensive solution package. This will ensure their timely compliance without compromising the innovation made possible by instant payments. The first implementation deadline for the Eurozone is quickly approaching with the 9 January 2025 deadline to be able to receive instant payments in Euro, have pricing measures adapted and have entity-based sanctions screening implemented.

What do you usually do in your spare time and any personal goals you have set for yourself (e.g., climb a mountain, write a book etc.)?

In my spare time, I spend a lot of time tending our garden but beyond this, I’m an avid reader who loves getting lost in the pages of a good book. Next to that I really enjoy cooking for (and with) friends and spending quality time with my kids. However, my greatest joy comes from the simple pleasure of walking along the beach with our dog. There’s nothing quite like the feeling of a fresh sea breeze to empty the mind and rejuvenate the spirit.

Travel is also close to my heart and here is where the next personal goal lies: I have a thing for waterfalls! Already visited Iguazu in Brazil, Gullfoss in Iceland and Niagara in Canada. And still on my bucket list are to visit  the Victoria Falls in Zimbabwe, the Angel Falls in Venezuela, the Plitvice falls in Croatia and many many more!

The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).