FLAVORS OF FAST

FLAVORS OF FAST REPORT 2018 Contents Contents

3. Welcome 19. The Faster Payment Innovation Index

4. Introduction 21. FPII Map and Ranking

5. Openness, Overlays and Immediacy 22. The Movers and Shakers 6. Opening Up Banking 22. Growth In 6. API Access 22. China Leading The World 7. Legislating Openness 22. New Payments In Australia 8. Innovate On Open 22. US Onboard 8. Open Up To Fast 22. Europe Goes Live 9. The QR Resurgence

10. Putting the Faster Rails to Good Use 23. Interviews and Insights 11. The Asian QR Code Explosion 23. Citi Treasury And Trade Solutions: 12. Some QR Ofers Real-Time, and Corporate Treasury 12. Dynamic QR 26. United States Roundtable: 12. QR Futures The Federal Reserve, The Clearing House 13. Social Network Integration and BB&T on Faster Payments 14. Reinventing The Supermarket CX In Europe 29. Payments Canada: 15. Open Australia Journey to Modernization 16. A Suite Of Innovation On Open + Fast 32. Blueprint for the United Kingdom: Redesigning Real-Time 17. A Defnition of “Fast” 18. Need Not Apply 36. Country Reports 18. Beyond Just Retail 37. Live Countries 18. Other Factors Of Interest 76. On The Radar 83. Under Development

©2018 FIS FIS and the FIS logo are trademarks or registered trademarks of FIS or its subsidiaries in the U.S. and/or other countries. Other parties’ marks are the property of their respective owners. Welcome Welcome

This year, that number jumped to an astounding 40 countries For example, we’ve seen APIs transform the traditionally batch- live with faster payment schemes, fueled in part by regions oriented world of corporate treasury into one that runs on real like Australia, the United States (US), and the launch of the time, and overlay services that allow consumers to apply for a SEPA Instant Credit Transfer (SCT Inst) scheme, created by loan and receive near immediate approval and funding. the European Payments Council (EPC). SCT Inst is expected to progressively bring faster payments to more than 30 We predict this is the start of a continued revolution in faster countries over the course of the next year. payments schemes, and one that will make speed just one sliver of a much larger story. In addition to the surge in new schemes, we’ve seen some earlier adopters of faster payments explore how to FIS is a global leader in advanced payments solutions and modernize their existing systems, both to fuel the new supports real-time payments production environments in 27 innovations that open APIs and collaboration on real- countries worldwide. We look forward to continuing our role as a time rails will make possible, and to shift toward global fntech leader who is dedicated to helping every one of our clients messaging standards like ISO 20022. Our 2018 fndings identify how faster payments can ft their unique business now, also indicate steady growth in terms of usage and adoption and the one they’re working to build for the future. in a number of existing schemes. 2018 marks FIS’ ffth year producing our We hope you’ll enjoy reading our 2018 Flavors of Fast report, annual Flavors of Fast report, which was Perhaps most importantly, 2018 marks the start of what and invite you to be a part of the faster payments conversation. we sense will be a pivotal shift in how scheme operators, originally inspired to capture the early participants and end users come to perceive the potential, Sincerely, but remarkable infuences we saw faster value, functionality and relevance of real-time payment rails. In various parts of the globe this year, we’ve noted a variety payment schemes making around the of value-added services and emerging use cases that world. When we published our 2014 report, are raising expectations and possibilities for what faster payments can accomplish, for end users as well as the we counted a total of 14 live schemes. institutions, fntech and authorized third-party providers who By the time we released 2017 Flavors can use real-time rails as an underpinning to deliver new Raja Gopalakrishnan of Fast, there were 25 countries live with products and ways of serving customers. GFS, Payments faster payment schemes. Introduction Introduction

Real-time payments are about more than just speed. As past Flavors of Fast reports have indicated speed is not They create frictionless commerce and enable a fnancial the only consideration for the retail consumer when making world in which the entire payment process occurs seamlessly payment. The value proposition must deliver an ease of Real-time payments are the frst step and immediately. An open payments system can also use that is comparable to cash, without the need for the provide opportunities for fnancial institutions to help payer to know the account number of the benefciary. toward a new world of payments; the commercial and retail customers better understand Costs must be competitive, with no compromise on security. instant nature of payments is merely and manage their fnancial picture with greater ease. Corporations need to provide customers with options that By developing innovative overlay services on top of the are in with changing expectations, and ensure that a launchpad for a new payments faster payment rails, whether through open banking instant payments are cost-effective and provide an improved ecosystem. initiatives or new ways of initiating payments through alternative to existing models (from a treasury perspective). QR code scanning, all parties in the value chain beneft. One game-changing factor is the use of the ISO 20022 Initiatives like the sharing of application programming message standard in many instant payment schemes. This interface (API) access among fnancial institutions, as standard provides an added beneft for corporates from a an introduction to customers and their customers’ data, data perspective, as more information can be sent along with has shifted the conversation about the potential for faster payments to simplify the end-to-end process. They can better payments. The discussion is no longer about the business understand market trends and create new products and value- case for faster payments, but adding real business value to added services that meet emerging business or consumer commerce in all spheres of operation. needs, especially those that create efciencies for end users. The use of ISO 20022 is a critical factor in our scoring of the What is driving increased interest in the deployment and various instant payment schemes, and the corresponding uptake of real-time payments, what has changed and what rank on our Faster Payments Innovation Index (FPII). does this mean for consumers, merchants, governments and corporations? Are instant payments primarily a peer-to- In addition to being instant, the peer (P2P) instrument, or will they become a mainstream tool used in the business-to-business (B2B) sphere too? key word for future payments is Once the instant payment infrastructure is in place, the real openness: open to sharing data, debate lies in the solutions and use cases that are available in the market and how to tailor the characteristics of these open to new channels, open to new services to each customer segment. applications, and open to being open. Openness, Overlays and Immediacy

Openness, Overlays and Immediacy

The speed of settlement, ease of use, and ways in which the service improves and streamlines people’s lives are certainly paramount to the success of a faster payments scheme — but they are not differentiators.

Overlay services can be defned as any payment service offered by a bank or third party that connects to an instant payment clearing and settlement infrastructure or its participants, but adds greater functionality for users. The emerging overlay services that are receiving the most attention have the potential to generate revenues for banks, and provide enhanced value propositions when packaged with coordinated information. It should be noted that the term “overlay” can have specifc defnitions in some regions. (Under NPP in Australia, for example, an overlay service is essentially a scheme that lives on top of the NPP scheme, and that requires multiple parties to participate.) Openness, Overlays and Immediacy

Opening up banking API access

Open banking is set to be the most seismic shift in The use of APIs by banks has become an increasingly fnancial services since the emergence of online banking. common way to drive new banking models that enable Payments must be an enabler in an increasingly networked consumers and businesses to manage their money in world; they need to be an integral part of the context better ways. Use of such innovative applications will of everyday life. When walking into a store, browsing a provide personalized information and services to meet website or using a app, customers are not numerous fnancial needs in one place. Collectively there to make a payment, the transaction is just a part of known as open banking, this technology revolution aims the bigger experience. Benefts will accrue as the rollout to liberate customer and business data from the systems progresses from more convenient and data-rich payments, and infrastructure of various fnancial services to facilitate to easier cross-border commerce, to a wide variety of these enhanced services, by leveraging connected value-added real-time payment services. networks instead of centralization.

The provision of API services empowers application developers to create and deliver services that go beyond The result of open banking will be the underlying payment. Immediate payments underpin new marketplaces, new choices these value-added services in a way that traditional credit transfers or card payments cannot. By embedding and added transparency. immediate payment mechanisms into otherwise purely To do that, fnancial systems must non-transactional offerings, business value is enhanced. An instant messaging app can become a means to pay modernize the way they connect to the restaurant bill; payday loan applications can provide other systems and to customers. instant access to funds; insurance providers can make instant payouts on claims. Openness, Overlays and Immediacy

Legislating openness

A follow-up from Europe’s frst Payment Services Directive, PSD2 has been front-and-center in the banking industry for more than a year, and not just in Europe. It aims to change the way retail banking is performed in the EU and provides the legal framework within which all Payment Service Providers (PSPs) must operate. The Directive’s purpose is to increase Pan-European competition and participation in the payments industry, including nonbanks, and to provide a level playing feld by harmonizing consumer protection and the rights and obligations for PSPs.

Under PSD2, banks and other fnancial institutions must give certain licensed third-parties access to account information. At the same time, they cannot treat payments that go through third-party service providers any differently. There are two types of third parties providers (TPPs), the Account Information Service Providers (AISP) and the Payment Initiation Service Provider (PISP). The AISP provides information about an individual’s accounts and balances, and the PISP initiates payments without going through the payment networks.

Open banking is not simply an attractive concept, it is backed by legislation in Europe. Openness, Overlays and Immediacy

Innovate on open Open up to fast

Open APIs and instant payment mechanisms are Open access to accounts running on faster payment rails inextricably linked; the combination of both will release the goes much deeper than simply smoothing the way for potential for fundamental change. By opening up fnancial additional merchant services. A bank’s customers create institutions to the outside world, faster payments can be a massive amount of data that often goes underutilized; used to drive new innovative use cases on a global scale. technology can now give customers access to refned and Third parties will gain access to account information usable data to improve their personal fnancial situation. and payment initiation capability, enabling a host of new With open access, apps can directly inquire about propositions to emerge. Open banking and APIs give consumer behavior and payment history (assuming the banks the opportunity to reinvent their business models, owner approves) and add real business value. Third-party but this must be guided by a sense of purpose. lenders could have access to historic transactional data to determine a borrower’s risk level, potentially providing By using an ecosystem of third-party applications and customers access to more personalized loan terms. services – enabled by APIs – banks can rapidly advance their digital transformation agenda in the open banking Open APIs offer signifcant opportunities and challenges world. In practical terms, the entire payment value chain for the industry, and the payments sector will take a needs to be disconnected into discrete elements. This leading role in their development and implementation. creates new opportunities and challenges, but opens the Open APIs could have a fundamental impact on the door for new business models that demand new ways of customer-bank relationship and signifcantly alter the thinking. For example, third-party application developers landscape of players and providers. may distribute payment services via their own channels, changing the traditional fnancial institution’s direct Instant goes beyond the payment, as all the processes footprint of responsibility and interaction. around payments– including reconciliation, testing and fraud monitoring—also need to accommodate real-time. To succeed in an immediate payments world, banks must Banks must evaluate their deliver a full digital service and meet client expectations in position as either a pure this evolving “always-on” landscape. infrastructure provider, or play an active role within the emerging ecosystem and maintain a direct relationship with customers – it’s a critical strategic choice. Openness, Overlays and Immediacy

The QR resurgence

A few years ago, QR codes were everywhere. From 2011 For brick-and-mortar stores in particular, mobile and to 2013, brands splashed them across posters, put online couponing via QR codes offers a way to cement them in shop windows and integrated them into creative customers’ loyalty and compete with digital stores. advertising. Yet, a combination of poor implementation, This move goes beyond simply creating brand awareness subpar technology, and a lack of native smartphone support and now facilitates payments via mobile devices. The reduced their popularity. However, faster payments may consequence is a deeper and richer integration of digital- help QR codes experience a comeback. loyalty programs.

In fact, QR codes have become the preferred payment There is a signifcant rise in the usage of QR codes on method in some of the world’s largest mobile payments mobile devices outside of core Asian markets, enabled by markets, like Asia, over the last few years. Usage is handset manufacturers adding QR scanning technology signifcantly lower across Europe and North America, into native camera applications and the rise of app where technology was focused on NFC- ecosystems which exchange QR codes to initiate fast based systems including those used by and payments. This may be an early indication that a “QR code Pay. In China, market leaders and WeChat comeback” in Europe, New Zealand, Australia and the US both use QR code vouchers to add loyalty elements to is on the horizon. their mobile wallet offerings, and have integrated instant payment mechanisms into their fabric.

QR codes are increasingly used in China, India and elsewhere in Asia to facilitate payments and the exchange of personal details, proving that QR codes can add value when approached with a truly mobile-frst mindset. Putting the Faster Rails to Good Use

Putting the Faster Rails to Good Use

The real question that hints to the potential for continued innovation is: What can you do once the rails are built?

The focus is often initially on P2P payments, but this is just the start. Initiatives are underway to deeply embed payments into the social fabric of society, for consumers, SMBs and corporates. Once the underlying real-time payment infrastructure is synchronized across the industry, the services offered on these real-time payment rails help communities take advantage of the benefts of the underlying infrastructure.

To achieve this, banks and other payment service providers need to re-evaluate their position and relationship to their customer, and determine how they’ll become open to new ways of doing business.

Putting the Faster Rails to Good Use

The Asian QR code explosion

Asia has much lower levels of credit card usage compared to other countries, and consequently, many smaller merchants do not accept them. For these markets, QR codes are a simple and viable way to initiate transactions and reduce the high use of cash. Thailand, India, China and Singapore have established payment services based on QR codes that use the new faster payment mechanisms. The use of QR codes has been pioneered with the small retailers and service providers, such as street food vendors and motorbike taxis, who do not normally offer electronic payment options.

Merchants who register for the service are provided with a static QR code that contains credit card-type information and the alias the merchant uses. This alias is used to resolve payments to the bank account of the merchant. Registered customers also have an alias that links to their preferred bank account used for payments. The process is simple: The customer scans the merchants QR code, gets confrmation of who will be paid, enters the price (unless the price is also in the QR code), and sends the payment. The merchant gets a notifcation that the payment has been made to their bank account, and the transaction is Government payments in complete – all in real time. Thailand and the Philippines QR codes have also become a government-endorsed are now being pushed using solution to reducing cash reliance. The goals are to move QR codes and the underlying more people away from the black economy, raise tax revenue and guard against fraud and money laundering. faster payment rails. Putting the Faster Rails to Good Use

SoMe QR ofers QR futures

An adaptation of the standard QR code purchase on-the- The resurgence in the use of QR codes as an accelerator for go, social media (SoMe) networks are making payments faster payments shows no signs of slowing. The emergence part of the social fabric. Pioneered in China through the of QR codes as transaction initiator began in China (WeChat phenomenally successful WeChat and Alibaba messaging and Alipay) and India (Bharat), but the phenomenal success apps, end-users can receive temporary discounted offers inspired many followers, including Thailand, Malaysia, from merchants. Using behavioral analytics, the social Singapore and other Asian countries who are either live or on media algorithms predict which offers will be of most the verge of launching QR-based services. interest to different customers, and then send targeted offers with a strong likelihood of uptake. Governments, banks and merchants are also looking to encourage and publicize QR-based services as they migrate toward cashless economies. For banks, it is a race to capture Dynamic QR merchants for their services through a sophisticated and well-designed app.

What are the chances that the QR-code revolution will The static QR code, often printed as a poster for easy spread to the West? We will likely see pilots, but the drivers scanning at checkout, can also be dynamic if presented of success in Asia do not necessarily match the market through a screen at checkout. Asian merchants have needs elsewhere. With higher credit card usage in the West, adopted QR codes to promote offers depending on stock and the imminent emergence of innovative services built on levels. For example, a retailer may offer a 50 percent open banking standards, QR code initiation may not prove as discount on the frst 100 items sold, but the discount can popular as it has been in Asia. dynamically drop to 25 percent for the next 100 items sold. The scanning of the code triggers an inventory check and adapts the QR code accordingly, in real time. The combination of social networks The QR code defnes the business scenario, and the code and payments has proven to be a can change as the scenario evolves. By linking the payment service to other merchant or retailer systems, such as inventory, primary driver of growth. the payment itself becomes embedded in the middle of the value chain as an enabler. Putting the Faster Rails to Good Use

Social network integration

Services in China like WeChat and Alibaba (and Alipay) have These services need a client base to succeed, and the closed- seen phenomenal success by incorporating P2P payment user-group nature of these services works to their advantage. capability. In India, the biggest frst movers include services that continue to merge payments with messaging; money While Facebook, WhatsApp, Apple Pay and have transfer apps like , Bharat and payment services now all offered (or attempted) similar functionality in the past, feature chatting capability. Established chatting apps such as the consumer uptake of these services (where available) WhatsApp and Hike have added instant payment mechanisms. has been less than meteoric. There are other electronic payment alternatives that are simpler and easier to use, Other Asian economies are looking to the success of these and many generate repeat use through generous loyalty social networks and the huge uptake in mobile payments, schemes. Social media payments are not even close to and planning their responses accordingly. Social network critical mass outside of Asia. services like WeChat, Alipay, and Bharat have started to make neighboring countries rethink their strategy. Until recently, With enormous client reach, these networks remained within their geographic borders, while offering their members payment options while abroad. sometimes approaching one Alipay, for example, launched services in Malaysia, and others billion active users per month, look to export their success to other nations in the region. these services threaten to bypass the traditional fnancial services players altogether. Putting the Faster Rails to Good Use

Reinventing the supermarket experience in Europe

In Europe, the launch of SEPA Instant Payments (SCT Inst), The supermarket sees enormous advantage in the entire has inspired a number of players to look at reinventing their process. By adopting open banking capabilities with SCT payments capability, for a streamlined customer experience Inst, the retailer can offer customers good discounts to (CX). In the world of retail, for example, a European supermarket encourage uptake and grow loyalty through well targeted chain is leveraging its fnancial services wing to simplify the deals. However, the interchange fees vary; such a solution checkout process for its client base, using open banking APIs may not be as attractive where the fees are lower. based on PSD2. Once operational, the supermarket plans to build out the user Through its smartphone app, the supermarket’s customers experience around the payment mechanism to further drive can directly pay at checkout. Without the need to connect trafc and generate loyalty. The supermarket can offer unique to conventional POS devices, customers initiate the payment deals to customers based on their behavior and past history, through the app, which connects to the customer’s bank based on geolocation in the store, directly onto the app itself. directly to make the SCT Inst payment. Funds are credited The payment experience is only the frst step toward a more to the supermarket’s bank instantly. The payment confrmation fully digitized and immersive customer experience. is sent to the customer’s app while at the checkout – within a few seconds – and the transaction is complete. In countries where interchange fees are high, customers who continue to pay with conventional credit cards are an expensive option. Putting the Faster Rails to Good Use

Open Australia

Australia recently launched its New Payments Platform (NPP) that offers instant payments across the country. However, the government is planning to go further and encourage open banking by mandating open data accessibility to improve customer outcomes and increase competition in the fnancial sector. The new open banking implementations will be phased in from summer 2019, bringing the potential to transform the competitive landscape in fnancial services and the way in which Australians interact with the banking system.

The goal is to give banking customers greater access to the data their banks hold, and the ability to direct that it be safely transferred to trusted and accredited service providers of their choice. Customers may be able to use their new data rights to fnd better deals on credit cards, mortgages and other banking products.

With increased open access to accounts, comparison services will be able to assess the value and suitability of all available products, taking into account the individual circumstances and needs of the customer. The rollout of open banking on top of NPP will also allow entrepreneurs, in cooperation with their banks, to develop new services and products tailored to customers’ needs, disrupting business models within the banking sector that do not put customers frst.

Government payments are prime targets for the improved services being promised by combining open banking and the faster payments service. The Australian bill payment mechanism for SMBs, which could also greatly beneft from increased speed, convenience and an improved user experience, should be part of the early transition. Putting the Faster Rails to Good Use

A suite of innovation on open + fast

Across the world, as faster payment services are combined with the open banking paradigm, a wealth of innovative services are being proposed, piloted and rolled out. These initiatives confrm that the conversation about faster payments has shifted from building the business case for a faster payments scheme, into a discussion on how faster payments can add real value.

Deliveries upgrade Lending streamlined A recurring use case being rolled out in many regions In Portugal, a challenger bank is offering instant loan caters to the delivery vans that service restaurants and availability with an SCT Inst payment. The bank can use other stores. By combining faster payments and open open API banking to credit check the loan applicant banking into a single app, the driver can send a “request directly through their bank before making the funds to pay” directly to the business owner. Alternatively, the available instantly. driver could present a QR code to be scanned by the business owner to initiate payment, without the delay Commuter delay soothing and paper trail of traditional models. In the UK, an initiative called #YayDelay uses an algorithm to monitor real-time train delays and tweets containing Ticket sales reimagined #YayDelay unlock discounted gin and tonics for frustrated A number of ticket purchasing ecosystems are rolling commuters. out streamlined payment services that bypass traditional card transactions in favor of open banking APIs and underlying faster payment rails. , in line with PSD2 and SCT Inst, has teamed up with a number of airlines to improve fraud protection with direct money transfers initiated through the single app.

The fact that direct payments will be processed and received in near real-time means airlines beneft from the acceleration of their funds, generating signifcant working capital and liquidity benefts. For travelers, this will result in more choice, a smoother and less complex payments process and more convenience when paying for airline travel. A similar process is under evaluation in Australia. A Defnition of “Fast” A Defnition of “Fast”

The Flavors of Fast defnition of a faster payment: “Inter-bank fully electronic payment systems in which irrevocable funds are transferred from one bank account to another, and where confrmation back to the originator and receiver of the payment is available in one minute or less.”

We may consider faster payment schemes to be a modern phenomenon, but the frst retail schemes to embody real-time characteristics date back to the early 1970s. Japan had an operational payment system in 1973, and Korea and Switzerland had one in place in the 1980s.

On a basic level, fast payments can be defned as payments in which the transmission of the payment message and the availability of fnal funds to the payee occur in real-time, or near real-time, as close as possible to 24/7. As we move from fast payments, to faster, factors like customer perception of real time, should be considered. Consequently, faster payments do not need to be strictly real-time, immediate nor instant.

Operational faster payment services function within nation states in a single national currency. The exception is the release of SCT Inst, where euro payments cross national borders. Looking ahead, it is likely that established domestic faster payment systems will be interlinked to create multiple cross- border faster payment systems. A Defnition of “Fast”

Need not apply

We have explicitly excluded a number of long-established payment mechanisms that would normally be thought of as fast, including any card-based transaction, niche real-time global settlement (RTGS) systems and any payment system that includes paper origination. The advent of alternative currencies and mechanisms such as Bitcoin, Ripple and Litecoin, have signifcant impact on the banking market, but we have consciously excluded cryptocurrencies from this research. Faster payments may be credit transfers or direct debits, so long as the confrmation and the funds are available quickly. (While a digital origination is critical, batch payments are also included.)

Beyond just retail

Originally, faster payment systems were primarily focused on the retail market (P2P and P2B), but increasingly, business payments (B2P and B2B) are taking advantage of them. Additionally, use cases for payments to and from government services (P2G, G2P, B2G and G2B) continue to widen, and have become increasingly common.

Other factors of interest

The requirement for a faster payment scheme to operate 24/7 throughout the year is not mandatory. We do accept schemes that accept payments 24/7 but have a delayed availability of funds outside normal working hours/days. Faster Payment Innovation Index Faster Payments Innovation Index

The Faster Payment Innovation Index (FPII) was frst established in 2014 to create a comparative rating system where diverse payment schemes around the globe could be compared and contrasted. While inclusion in the FPII demanded only some basic requirements (electronic payments between accounts available quickly), a higher FPII score requires more demanding criteria, and ideally, opens up the road to innovation on top of a faster payment service. Consequently, the FPII measures not only the speed with which transferred funds become available, but how the scheme in question is applied in its local market.

Since the frst edition, new market initiatives have gained ground, often as a direct result of the availability of an underlying faster payment service. We have therefore re-evaluated our criteria. In addition to standard credit transfers (push payments), we have included the ability to pull payments. A pull payment could take two distinct forms: Real time direct debit or a request to pay. Both services add value to the overall offering, and the provision of either increases a country’s FPII rating.

We’ve also added a new element to the FPII that indicates whether the domestic schemes under review have made use of faster payments to champion overlay services, possibly through QR code usage or open access through an API layer. It should be noted that the open API element may be part of the overall instant payment scheme itself, or it could originate from a separate source. Faster Payment Innovation Index Faster Payments Innovation Index (FPII)

Optional features Overlay services – API or QR code 4+5 Remittance information maximizing Alternative identifer (aliases) Batch and individual payments customer value Fast settlement 4+4 Push and pull payment capability

Universal access Highly desirable ISO standard 4+3 features enchancing (ISO 20022 or 8583) 24/7 availability customer value 4+2 Interbank Requested Account to account features < 1 min end-to-end 4+1 Irrevocable

The higher the FPII score, the stronger the possibilities for innovation. FPII Map and Ranking FPII Map

Payments in Real Time 4 Sweden

NETS RealTime 24/7 Siirto and Ranking 4+ 4+ Finland

Norway Pan-European Payments 4 SCT Inst Greidsluveitan 2 Iceland Express ELIXIR 4+ Poland Zengin 3 Japan

Czech Republic Internet Banking UK Faster Payments Payment System 4 United Kingdom 4 China

Hungary Interbank Home/ Firm Banking Network 2 Republic of Korea Swiss Interbank Clearing 4 Switzerland CIFS 1 Taiwan

Faster Payment System Hong Kong

PromptPay 4 Thailand

The Real-Time Rail Iberpay Immediate Payment Canada 4 Spain 5 Service - India

Vietnam

Real-Time Payments 4 USA LankaPay 2 Sri Lanka Retail Payment Sistema de pagos 2 System electronicos interbancarios Turkey Philippines 2 Mexico 3 InstaPay Fawri+ 3 Bahrain Retail Payments Platform Scoring: Colombia GhIPSS / GIP Malaysia 2 Ghana 5 Meets most features maximizing customer value Funds Transfer System Saudi Arabia Fast and Secure Transfers 2 NIBSS Instant 4+ Singapore 4 Meets some features maximizing customer value Brazil Payments 2 Nigeria 3 Meets most features enhancing customer value Transferencias en Línea New Payments Platform 2 Meets some features enhancing customer value 3 Chile Real-Time Clearing 4+ Australia 3 South Africa 1 Meets base required features only

Under development PesaLink New Zealand On the radar Peru 4 Kenya The Movers and Shakers

The Movers and Shakers

Fifteen regions went live with faster payments since our Flavors of Fast 2017 was released. Here are some of this year’s highlights.

Growth in India US onboard Since launching the Immediate Payment Service (IMPS) in 2010, India arguably has the most The Clearing House launched Real-Time Payments (RTP)® in November 2017, a new real- evolved and sophisticated public digital payments infrastructure in the world. It is one of the time payments system open to all US fnancial institutions. As the frst new major payments fastest-growing immediate payment services in the world, rising from two million transactions infrastructure since the ACH in the 1970s, RTP is built to support digital commerce and per day in 2017 to 2.8 million this year. become a platform for innovation. In addition to being faster than conventional payments – settling payments in seconds, not end-of-day or next-day – RTP includes features like payment The growth is partly attributed to the fact that the second most populous country in confrmation and requests for payment that enable pull payments to deliver bills and invoices the world has embraced the smartphone as a payment vehicle, but is primarily driven through digital channels. by the additional overlay services offered on top of the faster payments rails. These overlay services are offered through the Unifed Payments Interface (UPI), an overlay on Since there is no mandate for faster payments in the US, RTP is doing extensive marketing IMPS which gives an API interface to application developers to enable the initiation and and outreach to evangelize the new service and demonstrate how RTP could be integrated collection of payments. UPI-based services have led to the creation of a wealth of new into current payments processes and bolster business clients’ end-user value propositions. innovative payment solutions, and the adoption rates of instant payments in India refect The aim is to expand the services offered on the new real-time payment rails to include that evolution. In fact, the numbers of transactions originating through these apps have simple P2P transfers and business solutions for instant cash-on-delivery payments, supply adversely impacted traditional debit and credit card numbers. chain payments for just-in-time inventory, and cash concentration for corporate liquidity, trade settlement, etc. There are also plans to use ISO 20022 messaging for the delivery of China leading the world standard purchase orders on goods purchased. Uptake of faster payments in China more than doubled over the last 12 months, from 12 million payments per day to 25 million. Going forward, expectations are that banks and Read our exclusive interview with executives from the Federal Reserve, The Clearinghouse third-party organizations will develop new and innovative products and services on top and BB&T, one of the earliest adopters to go live with RTP, on page 26. of the instant payment rails, leading to higher market penetration and dominance. China has made extensive use of QR code-initiated payments where citizens scan QR codes at Europe goes live convenience stores, subway stations or street vendors to make instant payments. Such The European journey toward instant payments has formally begun with the launch of initiatives have sparked a noticeable spike in use. Instant SEPA Credit Transfer (SCT Inst) in November 2017. By mid-2018, these ffteen countries have banks signed up and adhering to the EPC SCT Inst scheme: New payments in Australia Australia went live with with its NPP in February 2018. While the initial registration for the Austria, Estonia, Germany, Italy, Latvia, Lithuania, the Netherlands, service has been strong, wider availability and the advent of value-adding overlay services Spain, France, Portugal, Malta, Bulgaria, Sweden, Belgium and the UK. is expected to accelerate growth. Banks in other countries will be coming online throughout 2018 and 2019 to progressively span more than 34 European countries. The hope is that SCT Inst will become the primary scheme for all euro transactions, with instant becoming the new normal. Interviews and Insights

FEATURED INTERVIEW: CITI TREASURY AND TRADE SOLUTIONS In October 2017, Citi Treasury and Trade Solutions and FIS partnered to leverage CitiConnect® APIs to connect FIS’ Trax corporate payment factory solutions to Citi’s Treasury and Trade Solutions suite. The collabortion has empowered Citi and FIS’ corporate treasury customers to take advantage of the many Citi Treasury and Trade potential benefts faster payments ofer to cash management, including enhanced visibility, real-time Solutions’ Rene Schuurman payment initiation, transaction status inquiry and balance inquiry. In addition to the fact that mutual clients of FIS and Citi Treasury and Trade Solutions can now execute, manage, monitor and report on on Open APIs and the their transaction fows in real time, they’re better prepared to adapt to new initiatives like open banking Impact of Faster Payments and cross-border payments requirements that will continue to impact corporate treasury functions. FIS spoke to Rene Schuurman, Global Product Manager Channel Services, Citi Treasury and Trade Solutions, to learn on Corporate Treasury more about the project, and what he envisions for the future of faster payments in corporate treasury.

What were the some of the main business challenges or How much experience did Citi have using APIs or faster biggest opportunities that originally inspired this project? payments prior to this initiative? We had the need to switch from batch-oriented processes Treasury and Trade Solutions went live with API to real-time processes to meet the needs of our customers, capabilities in November of 2016. Since then we have been and to become truly 24/7. APIs and technology are a onboarding and implementing customers onto our API building block and a great enabler to help us achieve those capabilities at a steady pace. As more and more markets objectives where instant data capabilities are available. come online with capabilities and applications, and The emergence of instant payment schemes is a great e-merchants and vendors look to adopt instant payment catalyst but, it’s not about the payment itself. There’s an capabilities as a replacement for credit cards, we expect to incremental need to also have access to reconciliation, see a very quick and aggressive adoption. remittance-related information and data. It’s one thing to pay fast, but also important to make sure you reconcile We’re seeing APIs applied to all fast and understand cash positions, all in support of right controls. Now we’re seeing getting clients energized different parts of transaction and excited to start looking at other means of applying banking. We see this becoming a the same principles that APIs and true data and instant processing bring along. common technology platform very quickly, very rapidly. Interviews and Insights

What type of education or messaging did you have to put What type of reaction did you get from your customers We’ll probably begin to see a lot of value-added services into the market as you were onboarding customers to knowing that while this presents great opportunity, it may emerge as well. Once you have access to data and encourage use and adoption? require that they change processes? information, and become a provider of services or an As a fnancial services industry, we are relatively late It simply represents the steep learning curve. Consider aggregator of services, there are additional capabilities in adopting APIs as a technology. It has required some the sales tagline of instant payments: it’s considered to you could develop. These may create new opportunities recent developments, deeper and more robust security be a potential replacement for credit cards. I think that’s a solutions and the embedding of API capabilities into the to sell additional fnancial services, or further digitize or profound statement because it can be true in many different core native treasury applications our customers use to get streamline how we as an industry provide our services to to a point where we can start exploring and applying the ways. Credit card processing is not typically a core treasury customers. I think we are only seeing the tip of the iceberg. use of APIs in transaction banking. function; treasury simply monitors the deposits into the accounts and reconciles charged cards. Adopting instant We’ve traditionally been a very batch-driven industry. Our payment schemes will expose the treasury organization Financial services is undergoing the clients are accustomed to creating messages or fles, much more directly to the core of the underlying business sending them to us before a cut- off time, and logging type of disruption that we’ve seen back into the system to collect bank statements. With and processes of any enterprise, than previously has been across industries like hospitality, but instant payments, there is no set time by when you should the norm. The treasury organization needs to adapt, reinvent make your payments, and that means clients may need to itself and fnd ways to control and manage these particular banks are not put in a position to rethink how they fund their accounts. In the old world, you challenges. could think of all the transactions scheduled to disburse in have to react or be surprised; they’re a day and secure funding accordingly. In the new world of What do you perceive as some of the most interesting, in the midst of it. instant payments, that is a fuid, moving target. relevant or important use cases that we are going to see instant or real-time bring for corporates? Settlement also becomes instant and fnal. It’s going to In the markets where the adoption of instant payments is Each bank won’t be equally require greater discipline, stricter controls on the side of our customers to make sure that they pay the right person, mandatory, we expect to see an accelerated realization and successful in navigating this for the right amount, into the right account when they transformation of treasury functions and how banks offer disruption, but we are probably going adopt instant payments. products and services, versus markets where it’s optional. We’re expecting to see aggregation services start emerging. to be in a fnancial services world Companies and consumers will likely look for one provider, that is extremely different from today whether it’s a bank or fntech frm or another trusted third- - in just a few years. party provider, for aggregation services on the account statement side as well as the payment processing side. We’ve seen regulators and governing entities copy and replicate policies, procedures, and ideas that have been implemented in one market; concepts and ideas like PSD2 may be replicated across multiple markets. Interviews and Insights

The various disciplines and streams A great example is the insurance industry. If two people Any other impacts you think initiatives like open banking get into a fender bender, many insurance companies and PSD2 are going to have on treasury specifcally? of what is needed to keep a company have an app where customers can take a picture of the Once the full reality of instant payments sinks in, we’re going functioning from a working capital accident, describe what happened, and submit a claim. to see a cascading effect. For example, if there is no cut-off aspect are all going to be impacted With the assistance of artifcial intelligence and automated time, if payment processing is 24/ 7, what does that mean for claims processing, many insurance companies can quickly determining your actual cash position? How are you going by this switch and move to instant review, assess and agree to approve these claims. Despite to baseline accounts? How are you going to determine your payments. that the claim is approved quickly, the payment may be assets? The concept of time is going to be very critical. There’s issued by a check that’s mailed, or an ACH deposit that going to be a lot more automation and risk assessments. It takes up to fve days to be applied to the account. If the may completely change and alter how we, as banks, offer That’s going to take a lot of insurance company could instantly deposit funds into the credit to our customers. We may need to start looking into iterations, review, fne tuning, careful account of the insured, the customer could immediately the right controls or mechanisms to form instant access to interactions and discussions with move forward with making repairs. In this type of scenario, credit facilities for our customers. For example, if an insurance instant payments could start to replace a traditional company has to start paying out a lot of claims after a natural customers and technology vendors instrument, like checks. disaster, we want to make sure such a company is able to make in the space to understand how we all of its payments-- but that might have a very profound impact can form partnerships and start Going back to the traditional use case of instant payments on how the company needs to be liquid. as an alternative to credit cards, Citi is part of the UK Open transforming the entire working Banking Initiative. Credit cards are relatively dominant in Specifc to this project, what best practices or key takeaways might you want to share with others in the industry who may capital discussion to make it even the UK, but only about one-third of consumers in the UK not currently be leveraging open APIs or faster payments? easier and more effective for all of us. uses a credit card; there’s a large group who are hindered Make sure you are ready from a technology, resource and in purchasing goods and services online because they budget perspective. A lot of systems and applications are don’t have access to a good payment mechanism. already capable of handling APIs - but not all of them are. You need to truly look at it from end to end. For instant payments, every process and platform that touches the The UK Open Banking Initiative will empower everyone What other impacts are you seeing in banking channels payment needs to be instant as well. Hire and secure the outside of treasury because of real-time payments? with a banking account in the UK to start procuring goods right skills in your organization, and be smart about your The discussion has become solutions-designed thinking and services in a fashion that is pretty much identical to funding and budget. The emerging systems and platforms about the problems and challenges that our corporations a credit card transaction. Rather than a credit card or a are completely new, and that means relatively big and customers are facing, and how we can provide the right 16-digit account number, the person uses a tokenized form investments. It may require capabilities and technologies that you need to acquire, develop and integrate, but the solution to help our customers. Only at the tail end is the of identifcation, like a self-created handle. The banks will old ones aren’t going away. As an industry we need to be question: ‘Will an instant payment help or not?’ help facilitate the exchange of funds effectively, efciently very careful to develop these capabilities in a model that and in a secure manner. makes sense for all involved. Not only for banks, but for the corporations and consumers they offer these services. Interviews and Insights

FEATURED INTERVIEW: UNITED STATES In July 2017, the Federal Reserve System’s Faster Payments Task Force (of which FIS was a member) released its ofcial plans and call to action to payments stakeholders to evolve the US payment system into one “that is faster, ubiquitous, broadly inclusive, safe, highly secure, and efcient by 2020.” Experts from the Clearing The Clearing House, a banking association and payments company owned by the largest commercial House, BB&T and the banks, launched its RTP in November 2017 to serve as the real-time rail that fnancial institutions in the US will use to clear and settle payments in real time, and to perform additional capabilities that provide Federal Reserve System customers with unique and enhanced faster payments services.

Share Insights on the In July 2018, FIS asked a panel of fnancial insiders who have been directly involved with these faster payments initiatives – Steve Ledford, SVP Products & Strategy at The Clearing House (TCH), Sue United States’ Move McBride, senior vice president, BB&T Treasury Services Product Management and Sean Rodriguez, to Faster Payments executive vice president, Faster Payments Strategy Leader, Federal Reserve System - to share their insights on the move to faster payments in the US.

What has been the overall experience in entering the The industry has come a long way to making real-time faster payments rails for the earliest adopters? payments a reality, but there is still signifcant work to be Ledford (The Clearing House): Many moving parts had done to bring this solution to our clients. Now the focus is to come together to launch successfully in November; on facilitating a client readiness program to incent adoption the RTP core payments system was just one piece. Early and usage. There is strong commitment in the industry and adopter banks had to stand up the requisite systems within BB&T to make this a success from day one. and operations; meet the legal, regulatory and risk management requirements; and line up pilot clients. Rodriguez (Federal Reserve System): Early adopters are Technology vendors created platforms to process both challenged with the expense of upgrading their systems, payments and novel non-payment messages. Bank to safely and securely process, post, clear and settle regulators had to adapt policies and procedures for new transactions more quickly. This is a signifcant upfront payment models, and the Federal Reserve implemented investment with a long-term payback. Financial institutions processes for opening and overseeing the joint account that adopt these cutting-edge payment services, however, RTP uses to prefund settlement. All subsequent have the advantage of enhanced customer relationships implementations can beneft from this foundational work. and the ability to offer innovative new products in the face of increasing competition. But the value doesn’t really McBride (BB&T): BB&T is in the early stages of launching begin to materialize until we have material adoption by real-time payments. We have fully enabled our clients large numbers of fnancial institutions, which makes the to receive real-time payments with initiation capability industry focus on ubiquity so important. following later in 2018. Interviews and Insights

What are some key learnings from the early adopters that Rodriguez (Federal Reserve System): The Faster Payments Though the RTP is not dependent on overlays, I do believe they could be useful for others who are preparing to enter (or Task Force envisioned an inclusive governing body that play an important role in deploying certain use cases, such as those who are not quite convinced that they need to make it would work to help support faster payments implementation P2P payments routed on the basis of a phone number or email a priority)? and be a forum for lessons learned and best practices. address. Services like add important capabilities to underlying Ledford (TCH): Get started early, and get the whole bank Work is currently underway to establish such a body with payment systems, by populating and maintaining directories of or credit union involved. Financial institutions that waited the expectation that it will be active in 2019. By developing, aliases, establishing a common user-friendly experience, creating too long to involve important areas such as regulatory coordinating and delivering broad awareness across the awareness and preventing fraudulent transactions. compliance, risk management, information security, legal market, those who are not quite convinced that they need to counsel or customer service operations found themselves make faster payments a priority may reconsider, given the I’m not sure if open APIs will be a signifcant factor in faster having to go to extraordinary lengths to catch up and avoid extensive benefts it could potentially provide. Furthermore, payments in the US, but APIs (open or not) will be important. delays. If you wait until you are feeling market pressure, any technical and operational implementation plan also RTP payments that are initiated via APIs and provided to end you may be too late to avoid competitive disadvantage. We needs a go-to-market strategy that considers how value users by their banks are already driving usage. APIs also equip also found that launching RTP required close coordination can be delivered where reach is limited, during this window commercial users to integrate faster payments into their own between the line of business, operations and technology. where we do not have ubiquity. business processes, which may spur creative use cases that deliver value well beyond simply moving money. McBride (BB&T): Develop a comprehensive payment strategy We’re seeing new use cases and value-adds emerge with — this is not just a new “tool” to facilitate a payment. Dedicate overlay services that run on the rails and/or use open McBride (BB&T): We should look at APIs as a natural resources to design, deploy and support a multi-year RTP APIs to enhance the functionality and relevance of faster extension, progression and evolution that makes it easier for program, to mitigate the risk that conficting priorities could payments around the world. In what ways might these infuence faster payments systems in the US? our corporate clients to do business. I consider this business result in a reallocation of resources. Don’t underestimate Ledford (TCH): The RTP® system was designed to be fully technology to be applicable across our clients’ fnancial the level of effort involved in enabling this new solution; it functional without formal overlay services, but can also serve business process in terms of how they can pay and transact may require new infrastructure, UI modifcations, numerous as a solid foundation for overlays. For example, capabilities (not just for faster payments). commercialization activities and internal collaboration like Request for Payment (RFP) can be used to deliver bills or with various lines of businesslike risk, legal, compliance, invoices without requiring that the sender or receiver subscribe Rodriguez (Federal Reserve System): Technological operations and customer service. Lastly, get actively involved to the same overlay; comprehensive services like P2P or B2B innovations like APIs are providing new opportunities for in industry forums and working committees to collaborate networks can use the rich RTP message set to support a payment providers to implement faster and more user-friendly and exchange ideas and best practices. distinct end-to-end value proposition. payment capabilities, and are being used more frequently to connect software and web applications from multiple providers. US providers could look to APIs to integrate a greater web of systems and services that can help address the challenges of ‘electronifying’ business invoicing payments and remittance processes. Interviews and Insights

What do you predict for faster payments in the US between now and 2020? Ledford (TCH): I fully expect the US will achieve effective ubiquity by the end of 2020, and it’s encouraging to see the momentum starting to build — but it’s an industry-wide commitment. I credit the Faster Payments Task Force and the leadership of the Fed for focusing everyone on the 2020 goal. Partners such as FIS will play a vital role, linking thousands of banks and credit unions to faster payments and providing applications that enable innovative use cases. It will take a lot of work to get there, but I’m optimistic.

McBride (BB&T): RTP shows great promise with becoming a mainstream payment solution over the next two years, assuming it becomes universally available. I anticipate initial slow uptake of the service due to many factors (including the scale of the economy and the large number of fnancial providers in the U.S.) but I am optimistic that the industry will achieve ubiquity given the level of momentum we are seeing.

Rodriguez (Federal Reserve System): I expect continued, unprecedented collaboration from every sector of the payments industry to resolve the issues that will otherwise stand in the I fully expect the U.S. will achieve way of broad adoption, such as safety, integrity, trust and effective ubiquity by the end of interoperability. We’ve seen the larger players coming online 2020, and it’s encouraging to see the with services and expect to see smaller fnancial institutions entering the space in partnership with their providers. You momentum starting to build – but it’s can also expect to see the Federal Reserve establish its road an industry-wide commitment. map for enhanced settlement or other services to support this implementation. Over time, I hope that industry stakeholders continue to iterate upon faster payments capabilities and strive to meet the task force’s Effectiveness Criteria. Interviews and Insights

FEATURED INTERVIEW: PAYMENTS CANADA In 2015, Payments Canada embarked on its payments modernization journey, with the end-goal of creating a fast, fexible and secure payments ecosystem that is efcient, convenient, interoperable and promotes further innovation. In May 2018, FIS spoke to Payments Canada CIO and executive director, Flavors of Fast 2018: Modernization, Jan Pilbauer, about Canada’s move to modernized payments, and its plans for a real-time Payments Canada CIO payments system that’s designed to serve as a platform for innovation. and Executive Director, Canada already offers a ubiquitous electronic push - Payments Canada solicited the feedback of more than 100 payment solution for consumers. Why was it important to stakeholders and participants to inform decision-making Modernization Jan Pilbauer modernize your existing systems? for the modernized system and its capabilities. Why was Canada does offer near real-time payments experiences it important to engage these participants in your process? talks about Canada’s for some use cases through Interac e-Transfer, but doesn’t What did you learn from them? have an existing real-time payments system. The current We are a not-for-proft, not government, not regulators, push towards payments near real-time payment system is not meeting all the and not a commercial entity providing payment services. modernization expectations we identifed through publicly consulting The Bank of Canada (Canada’s ) doesn’t run Canadians on the Vision for the future of payments. With the high-value settlement system; it’s all concentrated and this in mind, we want to build on what Canadians have done in one entity called Payments Canada. Our purpose access to now by providing the core infrastructure: the is to do the right thing for Canada and Canadians, by real-time rail. It [the rail] will be the utility-based solution to operating this national system and facilitating innovation move single credit transfers, and may ultimately support and interoperability among the different solutions in the a request to pay, or a request for money, and will support payments ecosystem more broadly. overlay services – the market-facing schemes that provision the end-user experience. When we started talking about modernization, we didn’t want to jump into the solutions, systems and technology right away. We wanted to take a step back and have a When we talk about the platform for future innovation, the rail is the broad discussion to understand user experience, needs and current gaps in solutions - as a consumer, a large platform where people will be able to come up with new ways to pay business, or as a government. We also didn’t want to talk – bills and everything else. We want to build on what we already have about what Payments Canada could do, or what fnancial in this country and ensure that we put the proper foundation in place institutions or fntech players would do, as this could potentially stife new ideas. It was frst and foremost an to support innovation and new ideas of how to use the underlying open discussion with more than 100 organizations, with functionality to move money and data in real time. road shows across the entire country; it gave us brilliant insights and a vision. Interviews and Insights

From the Vision through the Roadmap into the “The Target Why do you feel it’s important to continue driving The experience and payment also has to be fexible State” document we provided last year that details how innovation on the rails? enough that players who are not traditionally involved in different systems will interact together, everything has You need to remain open to innovation, to continue moving payments or digital commerce want to be a part of it. We been done cooperatively. We are not the frst country forward. If you put the foundational utility — the rail — in need to make sure the infrastructure, rules and standards on a modernization journey. We wanted to listen to the place, you have no idea how it’s going to be used. To use other jurisdictions and learn what worked well for them, support the experience without adding too much friction, and where they might have done things differently if they an analogy, we are building the physical infrastructure with while ensuring safety and soundness. It’s a difcult had the chance to do it again. Our vision identifed eight the foundational piece — it’s like the asphalt, the concrete, exercise to solve but we feel if you design it properly, these needs, most of which are common themes in payments the roads, or the network of highways. We’re setting the things will be enabled on top of the infrastructure that you - things like wanting to pay faster, or get access to richer rules on how fast you can go, but we want to build it in a put in place. data. Consumers generally expressed demand for higher way that it doesn’t make a difference if you have typical speed and higher value payments. Most of the demand for business and commercial use cases was in regards to data. cars running on it, buses, or electric or autonomous cars. Payments do not travel with a lot of data today, so straight- You may need to tweak the rules or legal framework here Our vision and the eight needs we through processing and reconciliations are all very manual; or there, if a car doesn’t have a driver, for example. The identifed include activity-based the businesses don’t like it. We made a strategic choice overall vision is something connected, that can support that the payment will always travel with business data. We multiple use cases and innovative new offerings. oversight. The rules we set should not chose ISO 20022 as the underlying standard; it will be the foundational piece for all of our modernized systems. apply to you only because you’re a We also want to drive innovation and ideas through fnancial institution. They’re not based What other global payments schemes or parts of the world increased competition; opening and expanding access did you look at for lessons, or best practices? to our system encourages innovation. Unlike in the UK on who you are, but what you do. We looked to the UK, but that’s a very different system or Europe, we don’t have any other category of regulated because their faster payments solution came in 2008 institutions other than fnancial institutions. If we put some – even before the iPhone was introduced. We are also kind of a rule in place for payments, we want to make sure in touch with the Federal Reserve’s Faster Payments that you follow the rule, and that safety and soundness is Initiative and The Clearing House in the US, and we hired ensured. Having said that, we are not a regulator. It’s for us a few people who were part of the strategy for Australia’s to help infuence and facilitate, but it comes down to the NPP to consult on best practices. Regions like China, Department of Finance and the Bank of Canada to help. India, Singapore and Thailand are doing very advanced They are the regulators. things when it comes to payments. It can’t all be applied in Canada, but we look at them for what could potentially happen. Last but not least, we looked at Europe, with their open banking, and especially PSD2. Interviews and Insights

What are your strategic priorities, and how these will move the modernized system forward? In the end of 2019, we will We’re changing our high-value system, improving our retail release some of the real-time rail batch system and implementing our real-time rail solution functionality. There will be follow up — but we are not doing all these things at the same time. releases after that because it should For instance, we are looking at our existing retail system, without completely redesigning it. For this latter system, in be a very fexible platform as the March 2018 we implemented a new Credit Risk Model to overlay services and new use cases further increase the safety and security of payments. In the will demand enhancements. fall we are adding a 9 p.m. EST exchange window which will allow payments originators based in the West to send fles to their fnancial institutions later in the working day, which will serve people on the West Coast well.

We didn’t have rules around how quickly fnancial institutions have to make funds available to the benefciary, once payment is received by the fnancial institution. For this reason, we are imposing a two-hour funds availability. We don’t want to make the retail batch system real-time, but we do want to make it faster.

In 2020, we expect to go live with the new high-value payments system; it’s the foundational bedrock for the proper settlement of all the payment schemes out there. Our high-value settlement system is serving quite well, but it’s a 25-year-old mainframe solution. We know with all the changes happening on the highest levels in the marketplace, we need to have a very fexible settlement system. It’s very tricky to replace something that processes $200 billion a day, so we are taking a bit longer to get this right.- Blueprint for the Future of UK Payments

Blueprint for the Future of UK Payments

In July 2017, the Payments Strategy Forum published its Blueprint for the Future of UK Payments then in December 2017 it was handed over to the New Payment System Operator for implementation. The document details the vision for the future of faster payments in the UK and maps the road ahead for moving to a new architecture, new scheme operator, new access models and new participants create a genuinely open framework for payments.

To create an open framework for payments that will bring new services to market and add value to core transactions, the UK is currently undergoing a streamlining of its central infrastructure that will continue over the next several years. The UK’s real-time payments system will undergo a series of moves that will include adoption of ISO20022, overlay services like Request to Pay, Assurance Data and Enhanced Data, also streamlined operation of Bacs, Faster Payments and Cheque and Credit Clearing and maintain a modernized faster payments system.

The path from early adopter to reinvention The move to innovation

When it was launched in 2008, the UK Faster Payments The Payments Strategy Forum (PSF) Blueprint seeks to Service (FPS) was considered one of the biggest change the way innovation is delivered in the UK, and revolutions British banking since the introduction of intensifes the inevitable disruption that will accompany cash, but payment services in the UK have evolved along PSD2 and Open Banking. The changes will mean increased product lines (like checks, credit clearing, Bacs electronic choice and control for consumers, but while the Blueprint payments and Faster Payments). This division has made creates a level playing feld for new and existing entrants memberships to various schemes complicated, costly in the payments industry most PSPs will fnd they need and exclusive, limited uptake of services like , Pay to determine new business models, partnerships and by Bank App, and restricted the Faster Payments system’s strategies to successfully “play” under these new rules, ability to deliver the value-added overlay services that and focus on core business priorities. encourage innovation, contextual relevance, and stimulate new uses cases. Blueprint for the Future of UK Payments

Initiating change – the new access model Improved access, greater innovation, better security

The FPS New Access Model has lowered barriers to direct scheme The publication of the Blueprint coincided with the beginning of a entry since 2016, and has attracted new scheme members and new era of Open Banking and PSD2, and identifed 17 solutions that enabled technical aggregators to offer new services. However, fall into three categories: a lack of sponsor banks currently inhibits the number of players who can use an aggregator to gain scheme entry using the indirect • The consolidation of the three main UK retail Payment System participant model. The New Access Model paves the way for more Operators: Bacs Payment Schemes Limited (BPSL), Cheque and low-volume PSPs to enter the market, and compete on the basis of Credit Clearing Company Limited (&CCCL) and Faster Payments their own service offering rather than market position or scale. The Scheme Limited (FPSL) market has welcomed the opening up of FPS, as has the Payment Systems Regulator (PSR). Subsequently, Bacs and CHAPS have • The development and implementation of a New Payments launched initiatives to open access. Like FPS, these initiatives Architecture (NPA) to increase competition between PSPs seek to encourage more direct scheme members and aggregators providing technical access. • A set of solutions to help prevent or reduce the impact of fnancial crime on users The Bank of England fully supports these initiatives and has relaxed the rules governing who can get an account for scheme settlement. The Prefunded Settlement Model ensures that, should any participant struggle to meet its settlement obligations, no other participant is affected. In this way, there is no shared settlement risk between individual FPS participants.

In parallel, the PSR has considered ways to introduce competition into the UK payments market and has mandated that Bacs and FPS must publish an ISO 20022 mapping to and from their own standard. This brings ISO 20022 to the fore as the standard way of going into and out of the main UK schemes. Blueprint for the Future of UK Payments

Consolidation of payment system operators The New Payments Architecture

As of the end of 2017, the three UK payment schemes The essence of the NPA is to create an environment that is (Bacs, Cheque and Credit Clearing Company, and Faster fexible enough to meet the emerging needs of users, and Payments) have moved under a single new entity, called the to provide a common technical infrastructure that can be New Payment System Operator (NPSO). used for running Bacs, Cheque and Credit, and FPS. FPS will be the frst scheme to migrate to the new architecture The principle objective of the NPSO is to own the NPA design in 2021. Consolidating the three schemes on to one and implementation, own the competitive procurement technical infrastructure should reduce running costs, while parts of the NPA, maintain standards and rules for the NPA the layered architecture will make it easier to introduce (including open APIs and overlay services), and accredit new overlay services and payment types, and encourage overlay service providers. competition within the layers.

In a May 2018 statement, NPSO CEO Paul Horlock said that New Payments System Operator Bacs and Faster Payments have developed “a huge amount of trust in payments through the certainty, integrity and security inherent in their system;” the NPSO’s mission is to To further simplify and streamline the UK payments continue that stability and security while ensuring continued environment, the NPA will address the strategic relevance and competitiveness for the services it provides need to move to ISO 20022, to provide a universal moving forward. communications language for fnancial services that facilitates interoperability and enables payments to carry This is our opportunity to create self-descriptive data. ISO2022 is already used today by the current account switching service (CASS) to share the future of retail payments in information among participant banks, and has quickly become a global payments standard by allowing users the UK, driving value for people the ability to include messages and use common formats and businesses and enabling a across operations, improve efciency and mitigate risk.

vibrant UK economy. We will be Given that 2017 also brought the initial launch phase of the leading payments authority SCT Inst, the move to ISO 20022 will improve the potential for interoperability, and likely encourage harmony in cross- that will create a best in class border payments as it is implemented more consistently payment infrastructure and around the world. standards in the UK for the beneft of people everywhere. Paul Horlock, CEO of the NPSO Blueprint for the Future of UK Payments

Implementation and timescale for NPA

The PSF proposes that the NPA is implemented over a period of fve years, and prioritizes three end-user needs solutions: Request to Pay, Assurance Data and Enhanced Data. New solutions like Request to Pay could potentially displace established payment methods, like cards; those providers who get to market early will be able to meet the needs of business customers, particularly small and medium-sized companies. The delivery of a “push” payment capability is expected at the beginning of 2021, with a staged migration of FPS from 2021, Bacs from late 2021, and Cheque and Credit from the beginning of 2024.

The PSF also advises that all existing products and services continue to be made available on the NPA. The Blueprint also acknowledges changes that are currently underway in UK payments, including the implementation of PSD2 and the Bank of England’s work to introduce a new Real-Time Gross Settlement (RTGS) system. Wherever possible, the NPA will align with these initiatives.

The NPSO took ownership of the NPA design and implementation at the end of 2017, and will maintain standards and rules for the NPA including oversight of Open APIs and overlay solutions, to facilitate innovation and improved competition. All potential providers of overlay services will need to be “accredited” by the NPSO in order to enter the market.

While access to UK payments is opening up, we believe that broader participation will boost innovation and make payments more democratic, and that collaboration is necessary to realize the strategic vision of universal ISO 20022 and full interoperability. Given that the fundamental objectives of the NPA are to create a lower-cost environment where more innovation can fourish, end users and small to midsize companies should beneft from the three needs solutions and important benefts like additional cash fow and cash management capabilities. Country Report Country Reports

LIVE COUNTRIES UNDER DEVELOPMENT Australia Canada Bahrain Czech Republic Brazil Hong Kong Chile Hungary China Malaysia Denmark Finland ON THE RADAR Ghana Colombia Iceland New Zealand India Norway Japan Peru Kenya Saudi Arabia Mexico Pan-European Countries Nigeria (SCT Inst not yet online) Philippines Vietnam Poland Republic of Korea Singapore Spain South Africa Sri Lanka Sweden Switzerland Taiwan Thailand Turkey UK US Pan-European Countries (15 with SCT Inst online) Live Countries Live Countries

Australia Bahrain Brazil Chile China Denmark Finland Ghana Iceland India Japan Kenya Mexico Nigeria Philippines Poland Republic of Korea Singapore Spain South Africa Sri Lanka Sweden Switzerland Taiwan Thailand Turkey UK US Pan-European Countries (15 with SCT Inst online)

4+4+ Live Countries /5 Australia FPII Rank

Australia went live with the New Payments Platform (NPP) in February 2018. Six retail banks and three banking service aggregators are now bringing their customers onboard, with more than 40 other smaller fnancial services organizations also getting access to the NPP through the core group. AUSTRALIA Service name The Reserve Bank of Australia (RBA), the central bank, frst highlighted the New Payments Platform (NPP) need for innovation in the Australian payments environment back in 2012. Year live In response, the local banking industry initiated the NPP with the aim to 2018 provide businesses and consumers with a fast, versatile and data-rich FPII (possible ‘open API interface’ usage) payments system. NPP was even listed in the Australian 2018/19 4 + federal budget for the role it will play in helping to move Australia System operator to a more efcient and innovative digital economy. NPP Australia Limited

Ofcial website While the initial uptake of the service has been encouraging, expanded https://www.nppa.com.au/

NPP participation among banks and the availability of value-adding overlay Level of government involvement services is expected to accelerate growth. Based on ISO 20022 messaging, Initiative in response to central bank issues consultation. Central bank facilitated the NPP payments service enables innovation through the development of line-by-line settlement. multiple overlay services that can be tailored to payment needs over time. Average daily volumes/value N/A The frst overlays on NPP are a suite of services known as Osko, starting N/A with an instant payment service that launched on day one and offers funds Speed of posting to accounts transfer using the national alias scheme called PayID. It allows account Near realtime holders to link a phone number, email address or company number to a Speed of settlement bank account, eliminating the need for customers to use long, forgettable Immediate and continuous account numbers to transfer money to recipients. Maximum value N/A Subsequent phases of Osko will roll out a “Payment with Document” service Individual and/or batch payments that allows governments and organizations to send documents attached Individual payments to payments in near real-time; a fnal Osko service called “Requests” allows Operating hours payment requests to be issued with a description from one or more parties. 24/7 Recipients can then respond with a payment in near real-time. Payment applications P2P, P2B, B2P, B2G, B2B, G2P through online and Live Countries

Australia cont.

Australia is deeply committed to the rollout of open banking with the government agreeing to implement the recommendations in the fnal report of its independent “Review into Open Banking.”

Implementation will be phased the beginning of mid-2019, when major banks will make data available on credit and debit card, deposit and transaction accounts by July 1, 2019, and mortgages by February 1, 2020. All remaining banks will be required to implement open banking with a 12-month delay. Initially, the focus has been on consumer transactions through internet or mobile access, but market drivers are expected to expand the service with an ever-increasing array of overlay services on top of NPP.

Separately, three of the largest Australian banks have launched an alternative payment service, Beemit. Users enroll using any scheme debit card that also participates in the national debit card switch Eftpos; all user functions are provisioned through a phone app. This includes the creation of a unique “@user_handle” that is not associated with any other identifer. It supports functions like payment initiation, payment request and bill splitting arrangements between multiple users, with the “@ user_handle,”and QR codes. Cards are used to enroll funds are effectively transferred between the underlying deposit account in seconds, using the refund function of the existing EFT network. Beemit appears to act as a merchant, allowing customers of any Australian issuer participating in the Eftpos network to use the service. Initial announcements by the owning banks indicate that a focus of the system is to enable smaller businesses to receive payments without the need for merchant credit facilities.

Sources: https://www.nppa.com.au/the-platform/frequently-asked-questions/ http://www.nppa.com.au/wp-content/uploads/2016/12/NPP-Webinar_July-2017-Publishing.pdf https://www.osko.com.au/home https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/ https://www.itnews.com.au/news/australias-new-payments-platform-goes-live-485045 http://www.bankingday.com/topics.php?stream=50-340 https://www.beemit.com.au/ http://sjm.ministers.treasury.gov.au/media-release/049-2018/ 4+3 Live Countries /5 Bahrain FPII Rank

FAWRI+ allows customers of retail banks to transfer any amount up to BAHRAIN Bahraini Dinar (BHD) 1,000 per day, within 30 seconds, 24/7, using the Service name benefciary’s IBAN and the amount to be sent. The service is available Fawri+ through branches and fnancial malls, internet banking and mobile banking Year live apps, for both consumer and corporate payments. 2015 FPII (possible ‘open API interface’ usage) Although there is no limit to the number of transfers made, there is a daily 3

limit of 1,000 BHD (about $2,600 USD). Most transfers are free, though System operator larger transfers can incur a modest fee of BHD 0.10 (about 25 cents, USD). Owned by the Central Bank of Bahrain. Implemented and operated by BENEFIT Both parties involved receive an SMS message to confrm the transaction. (owned by 14 Bahraini and international banks)

Ofcial website The primary driver for FAWRI+ was to reduce the reliance on cash that https://www.beneft.bh/Services/ dominates the payment market throughout the economy. With settlement electronicfundstransfersystem/

twice a day, in addition to credit transfers, the service promotes bill Level of government involvement payments and some government payments. Owned by the Central Bank of Bahrain in cooperation with BENEFIT and 8 major local banks

Sources: Average daily volumes/value http://www.cbb.gov.bh/assets/statistics/Nov__2017.pdf 355 (2016) http://www.cbb.gov.bh/assets/A%20R/CBB%20ANNUAL%20REPORT%202016%20-%20English%20fnal.pdf BHD 238,000 (2017)

Speed of posting to accounts Within 30 seconds

Speed of settlement Twice per day, deferred net settlement

Maximum value BHD 1,000 per day and per transaction

Individual and/or batch payments Batch payments

Operating hours 24/7

Payment applications P2P, P2B, B2B, P2G and bill paying through internet banking, mobile banking and branch. 4+2 Live Countries /5 Brazil FPII Rank

As the ffth most populated country in the world, Brazil is uniquely challenged to unify payments across a diverse population. In addition, the demographics in the eighth largest economy in the world are changing quickly; tens of millions of Brazilians are escaping the poverty line annually, BRAZIL and entering the middle class. To provide equal opportunity across the Service name country, the government launched SITRAF (Sistema de Transferência de Funds Transfer System - SITRAF Fundos) in December 2002, making it the frst real-time payment system Year live in the Americas. It processes electronic transfers between the customers 2002 of different banks. Electronic express transfers, or TED (transferência FPII (possible ‘open API interface’ usage) eletrônica disponível), became available as part of efforts to modernize 2 Brazil’s payment system. TED is an express electronic funds transfer System operator operation that can be settled in real time through the SITRAF with same- Camara Interbancaria de Pagamentos (CIP), day funds availability. The use of TED has soared since its implementation. non-proft association owned by banks Ofcial website SITRAF uses two mechanisms of settlement: Real-time gross settlement www.cipbancos.org.br/cip/solucoes/sitraf.html (RTGS), which is the most used, and continuous clearing of obligations. Level of government involvement Because of the use of both mechanisms, SITRAF is considered a hybrid Central bank net settlement settlement system. SITRAF uses a mechanism of prefunding so the Average daily volumes/value 1.7m participants’ balances are derived from the deposits made and orders BRL 12.8 billion received from the other participants. Participants send payment orders Speed of posting to accounts that are settled in the accounts held at SITRAF by debiting the issuing 97% received in < 1 minute, participants’ accounts and crediting the benefciary participants’ accounts. (exceptions can be delayed up to 1.5 hours)

Overnight, the participants’ accounts are passed to the Banco Central do Speed of settlement Brasil to reconcile the accounts held at SITRAF. Currently, SITRAF uses an Continuous net settlement

XML-based messaging system but will soon move to the international ISO Maximum value 20022 standard. BRL 1 million

Individual and/or batch payments Sources: Individual payments https://www.cip-bancos.org.br/stat/sitraf/EvolPagsMesTot.html https://www.cip-bancos.org.br/cip/solucoes/sitraf/estatisticas.html Operating hours https://www.instapay.today/tracker/brazil/ Operating between 07:30 – 17:00

Payment applications Credit transfers - TED (Transferência Eletrônica Disponível) P2P and P2B 4+3 Live Countries /5 Chile FPII Rank

Chile was the second South American country to implement a digital faster CHILE payments service, and usage has grown steadily to more than one million Service name transactions per day. The value being transferred daily has grown to CLP Transferencias en Línea - TEF 687 billion (about $1.1 billion). Year live 2008

The current infrastructure launched almost a decade ago and was built FPII (possible ‘open API interface’ usage) on an earlier online payment service that began in 2002. Today, consumers 3

and businesses can initiate payments online or through mobile devices; System operator they are acknowledged within ten seconds. Centro de Compensacion Automatizado (CCA)

Ofcial website The TEF faster payment system was implemented by a private sector www.cca.cl

organization, the Centro de Compensacion Automatizado (CCA), at the Level of government involvement request of the government regulators. The products and services a bank Regulatory mandate to eliminate foat in 2007, offers on the CCA faster payment infrastructure are not dictated; banks are Central Bank settlement free to develop innovative applications to meet their customers’ demands. Average daily volumes/value 1m (2017) CLP 687 billion Sources: https://www.cca.cl/transacciones Speed of posting to accounts https://www.instapay.today/tracker/chile/ 10 seconds (receiving bank must respond within 10 seconds)

Speed of settlement Twice per day through RTGS

Maximum value USD 10,000 (approx.)

Individual and/or batch payments Both individual and batch payments

Operating hours 24/7

Payment applications P2P, P2B, B2B, B2P (credit and debit transfers) 4+4 Live Countries /5 China FPII Rank

The People’s Bank of China (PBOC) established an integrated system to connect banks, merchants and retailers in a unifed payment infrastructure for the clearing and settlement of retail, wholesale and fnancial market transactions, for the world’s second-largest economy. China’s Internet Banking CHINA Payment System (IBPS) is part of an established second-generation payment Service name system developed by the People’s Bank of China. IBPS connects the online Internet Banking Payment System - IBPS banking systems of the various participating commercial banks. In 2017, the Year live internet inter-bank settlement systems handled around 8.46 billion payments, 2010 to the tune of about CNY 61.72 trillion ($9 trillion). This represents year-on-year FPII (possible ‘open API interface’ usage) growth of about 90 percent and 65 percent, respectively. 4 System operator Payments between banks can be received in near-real-time, with China National Clearing Centre

acknowledgments within 20 seconds. China offers credit transfers (push Ofcial website payments) and treats direct debits as pull payments. IBPS is ISO 20002 http://www.cnfnance.cn/ based and is the latest service to operate on the foundation of the China articles/2018-03/12-27964.html National Advanced Payment System (CNAPS II) interbank clearing platform. Level of government involvement Going forward, expectations are that banks and third-party organizations Regulated by People’s Bank of China will develop new and innovative products and services on top of the IBPS Average daily volumes/value 25.9 million platform, to drive higher market penetration and dominance. CNY 169 billion

Speed of posting to accounts Within 20 seconds

Speed of settlement Regular settlement cycles through the day

Maximum value CNY 50,000

Individual and/or batch payments Individual payments

Operating hours 24/7 - availability may vary by bank

Payment applications P2P, some banks may provide additional services such as bill payment, direct debits, internal corporate transfers (sweeps), credit and debit transfers, bill payments, direct debits and corporate transfers Live Countries

China cont.

At the same time, however, the online payment industry in China will become more regulated, particularly now that the central bank has ordered third-party payment institutions, including Alipay and WeChat, to connect to a newly established unifed platform by June 30, 2018. This new clearing platform is called NetLink or China Nets Union Clearing Corporation (NUCC) and impacts the online payment clearing platform for non-banking payment institutions. Before it, online payments made via third-party payment tools like Alipay and WeChat Pay were completed directly between providers and banks, bypassing the clearing system of the PBOC. The move is considered a way to redress risks for the industry, allowing the PBOC to better monitor illegal activities like money laundering and illicit money transfers that may be conducted through online payments via the third-party payment tools. The NUCC is targeting to route all online payments through the platform from June 30, 2018.

China has made extensive use of QR code-initiated payments that allow users to scan QR codes at convenience stores, subway stations or street vendors to make instant payments. However, PBOC intends to regulate QR code payment to contain risks arising from the popular service, while hopefully continuing to encourage innovation upon the faster payment rails. Under the proposed regulation, payment institutions must obtain proper permits to offer barcode-based payment services; banks and non-banking payment institutions must channel cross-bank transactions involving the codes through the PBOC clearing systems.

Sources: http://www.cnfnance.cn/articles/2018-03/12-27964.html 4+4+ Live Countries /5 Denmark FPII Rank

RealTime24/7 is an ISO 20022-based centralized clearing solution for instant payments of up to DKK 500,000 ($75,000). However, RealTime24/7 is not limited to just instant payments; it is able to process all types of credit transfers, including high value, low value, domestic or cross-border. Settlement DENMARK can be deferred net settlement and/or real-time settlement, giving banks and Service name communities using RealTime24/7 NETS RealTime24/7 the ability to choose the best combination of settlement mechanisms. Year live Under the deferred net settlement, liquidity is prefunded, and a settlement 2014 instruction is created with the Central Bank or to Target2. Real-time FPII (possible ‘open API interface’ usage) settlement is done against an external credit-line (RTGS). 4+ System operator Early in the development of RealTime24/7, Nets recognized the value of NETS (Also called Express Transfers innovative and effective overlay services. Consequently, RealTime24/7 offers or Straksclearing) open APIs – directly to the banks and to others – to encourage further product Ofcial website development. An open API interface makes it easy to add new services and www.nets.dk ecosystems, and enables participants to develop specifc applications that Level of government involvement In response to government mandate. deliver value and enhance the user experience. RealTime24/7 supports the Central bank settlement and oversight use of tokenization by routing and converting mobile numbers, or any other Average daily volumes/value proxy, into the underlying accounts numbers for an improved, frictionless 20 million transactions customer experience. DKK 1.6 billion

Speed of posting to accounts Volumes are increasing rapidly with more than 90 percent of the adult Near real-time (1-10 seconds)

population on board, representing three million users out of a total population Speed of settlement of 5.6 million. RealTime24/7 is one of the fastest growing instant payment Net, intraday settlement 6x throughout the day

systems with average monthly transaction growth of four percent. Maximum value DKK 500,000 Sources: https://www.nets.eu/solutions/Documents/43813%20Nets%20RealTime247%20Service%20Description.pdf https://investor.nets.eu/~/media/Files/N/Nets-IR/documents/annual-report-2017.pdf Individual and/or batch payments https://www.nets.eu/solutions/InstantPayments/Documents/RealTime247_Instant_Payments_Report.pdf Individual payments https://www.nets.eu/solutions/InstantPayments/Documents/RealTime247_Instant_Payments_Report.pdf https://www.nationalbanken.dk/en/publications/Documents/2017/03/Analysis_Danes%20are%20Front-runners%20in%20 Operating hours Electronic%20Payments.pdf 24/7 https://www.nets.eu/solutions/InstantPayments# https://www.instapay.today/tracker/denmark-/ https://www.instapay.today/tracker/denmark/ Payment applications Credit transfers, P2P, B2B, mobile, online 4+4+ Live Countries /5 Finland FPII Rank

Launched in March 2017, Siirto is an account-to-account real-time mobile payment solution for P2P payments operating in Finland. The service includes both push and pull transactions, allowing payments to be requested, and supports standard credit transfers. Users are always FINLAND authenticated with access codes, and only a mobile phone number is Service name needed to make a transfer. Siirto has been developed by Automatia, Siirto which is owned by OP Bank Group, Nordea Bank and Danske Bank. Year live 2017

The Siirto platform is PSD2-ready and offers an open interface to FPII (possible ‘open API interface’ usage) connect any licensed to the service, laying 4+ the foundations for Finland’s new payments ecosystem. Siirto was the System operator frst mobile payment platform to implement the new PSD2 rules for Tieto

open payment interfaces two years ahead of the actual implementation Ofcial website date in Europe. This makes it possible for any EU-licensed payment https://otto.f service provider to offer payments across the banks, regardless of the https://siirto.f Siirto member bank. Currently, Siirto only offers P2P payments, but the Level of government involvement Bank of Finland and the Payments Council monitor service is being extended to include e-commerce, in-store payments and and analyze developments on the payments market. e-receipts. Regular oversight assessments are conducted of systemically important payment systems.

Sources: Average daily volumes/value https://www.tieto.com/customer-cases/tieto-develops-fnlands-frst-real-time-mobile-payment-platform-for-automatia N/A http://www.bankingtech.com/2016/11/three-fnnish-banks-launch-real-time-mobile-payments-platform-siirto/ https://helda.helsinki.f/bof/bitstream/handle/123456789/14724/eurotalous_kemppainen.pdf?sequence=1 Speed of posting to accounts https://www.nordea.f/en/personal-customers/everyday-fnances/internet-mobile-and-phone-services/siirto.html#tab=About-Siirto Instant https://www.tieto.com/investors https://www.tieto.com/sites/default/fles/atoms/fles/introduction_to_tieto_open_payment_ecosystem_march2017.pdf https://www.instapay.today/tracker/fnland/ Speed of settlement https://www.bofbulletin.f/en/2017/2/payments-becoming-increasingly-real-time-and-less-visible/ N/A https://www.mobeyforum.org/siirto/ https://www.instapay.today/tracker/fnland/ Maximum value EUR 1,700 (may vary by bank)

Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications Direct funds transfer, P2P via mobile and online. 4+2 Live Countries /5 Ghana FPII Rank

GhIPSS Instant Pay (GIP) is a service on the gh-link platform that allows payments to be sent across fnancial institutions electronically from one bank account to the other as a single immediate payment. As a predominantly cash-based economy, Ghana’s legislators initiated GHANA GhIPSS to help reduce the cash reliance and move toward a more digital Service name fnancial economy. With GIP, customers of banks can transfer money GIP (Ghana Interbank Payment and Settlement Systems – GhIPSS – Immediate Payment) from their bank accounts to accounts of benefciaries in other banks in real-time, 24/7. The GhIPSS Limited is a wholly owned subsidiary of the Year live 2016 Bank of Ghana, and fully ISO 20022 based. FPII (possible ‘open API interface’ usage) 2 GIP is primarily an internet banking platform. Customers of the service sign onto their bank’s internet banking platform to make payments. System operator However, banks can decide to complement their internet offering by Bank of Ghana incorporating other sources including ATM, branch tellers and mobile Ofcial website apps. The service is available for B2B payments (just-in-time supplier http://www.ghipss.net payments), P2P fund transfers (reimbursements and remittances), B2P Level of government involvement The GhIPSS is a wholly owned subsidiary of the payments, P2B payments (emergency bill /fee/utility payment) and Bank of Ghana. At end of day, GhIPSS sends net person-to-government payments. settlement positions to Bank of Ghana

Average daily volumes/value The growth of GIP transactions has been fueled by the adoption of the 115 product by third-party payment gateways and international remittance GHS 228,000 companies. GhIPSS intends to implement its electronic bill payment to Speed of posting to accounts provide a platform that will allow billers (like utility service providers) to Less than 1 minute receive payments from customers instantly through the GIP service, and Speed of settlement to partner with the mobile network operators (MNO) to promote mobile Deferred net settlement money services. Maximum value N/A

Sources: Individual and/or batch payments http://www.ghipss.net/products-services/gh-link/ghipss-instant-pay N/A https://www.bog.gov.gh/privatecontent/Payment Systems/PAYMENT SYSTEM STATISTICS_2017.pdf https://thebftonline.com/business/companies/e-bills-pay-can-help-reduce-corruption-at-public-institutions/ Operating hours 24/7

Payment applications Internet banking, mobile banking and branch transfers, P2P, P2B, B2B, P2G, G2G, e-bills 4+2 Live Countries /5 Iceland FPII Rank

An early adopter of faster payments, Iceland is upgrading the established proprietary solution that has been in operation since 2001. The established service provides P2P payments by sending low- value payments through netting settlement, and routing high-value ICELAND transactions through an RTGS infrastructure. Service name Greidsluveitan

The next generation will go live later in 2018 to replace the Central Bank Year live of Iceland’s current mainframe-based real-time solutions for high and 2001 low-value payments, which is available 24/7. The new instant payment FPII (possible ‘open API interface’ usage) platform will be based on ISO 20022 formats and will allow innovative 2 overlay services through an open access API mechanism. System operator Bank of Iceland and Reiknistofa Bankanna Sources: https://www.instapay.today/tracker/iceland/ Ofcial website https://www.sia.eu/en/media-events/news-press-releases/central-bank-of-iceland-chooses-sia-to-implement-the-new-real- www.cb.is time-gross-settlement-system-and-the-new-instant-payment-platform https://www.sia.eu/en/access-to-clearing/sia-easyway-for-instant-payments https://www.sia.eu/en/perago Level of government involvement https://www.sia.eu/en/media-events/news-press-releases/perago-sia-group-wins-the-payments-and-market-infrastructure- Controlled by the central bank provider-of-the-year-award http://www.bankingtech.com/2017/04/central-bank-of-iceland-chooses-sia-for-payments- overhaul/ Average daily volumes/value https://www.businesswire.com/news/home/20180124006147/fr/ https://www.sia.eu/en/perago 1,000,000 (2016) https://www.sia.eu/en/media-events/news-press-releases/central-bank-of-iceland-chooses-sia-to-implement-the-new-real- N/A time-gross-settlement-system-and-the-new-instant-payment-platform Speed of posting to accounts Real time

Speed of settlement Real time in business hours

Maximum value EUR 1,700.00

Individual and/or batch payments Individual and batch payments

Operating hours 24/7 but no guarantee of immediate settlement between 21:00 and 07:00

Payment applications B2B, P2P and B2C, 4+5 Live Countries /5 India FPII Rank

Since launching the Immediate Payment Service (IMPS) in 2010, India has what may be the most evolved and sophisticated public digital payments infrastructure in the world. As the fastest-growing immediate payment service, daily transaction volume has risen from about two million transactions per day INDIA last year, to about 2.8 million a day this year. The growth is partly attributed to Service name the fact that the second most populous country in the world has embraced Immediate Payment Service (IMPS) the smartphone as a payment vehicle, but primarily driven by the additional Year live overlay services offered on top of the faster payments rails. These overlay 2010 services are offered through the Unifed Payments Interface (UPI), an overlay FPII (possible ‘open API interface’ usage) on IMPS giving an API interface to application developers enabling the 5 initiation and collection of payments. System operator National Payment Corporation of India (NPCI)

The backbone of India’s infrastructure is the IMPS (Immediate Payment Ofcial website Service). Launched by the Indian government in 2010 and facilitated by NPCI https://www.npci.org.in

(National Payment Corporation of India), IMPS is a service that allows bank Level of government involvement customers to use a mobile device, the internet and other channels to make Central bank settlement

immediate payments. An IFSC Code + Account Number (P2A), MMID + mobile Average daily volumes/value number (P2P) or number (P2U) (government issued identity number) 2.8 million connects bank accounts and completes payments. IMPS is based on ISO INR 24 million 8583 standards and operates 24/7; almost every major is the part Speed of posting to accounts of IMPS. Money is credited and debited within seconds, and confrmed by Real-time instant SMS. Overlay services that can be built on the IMPS faster payment Speed of settlement rails will move toward the cashless goal. Real-time Maximum value INR 200,000

Individual and/or batch payments Individual and batch payments

Operating hours 24/7

Payment applications Mobile banking, internet banking, ATM, USSD service (Unstructured Supplementary Service Data) Live Countries

India cont.

To facilitate these services, the National Payments Corporation India (NPCI) launched the Unifed Payments Interface (UPI), which is an overlay on IMPS and API interface that enables applications to initiate and collect payments from . The originator does not need to know the bank details of the benefciary; security is ensured by combining the virtual address mobile (possession) and mobile PIN (knowledge). NPCI has seen more than six million transactions in March 2018.

While UPI is marketed as a new payment method, it is a combination of real- time payments with open interfaces and is intended to replace cash, POS and wallets. India has seen the launch of many innovative overlay services through UPI, including mobile apps from retailers that take payments directly from bank accounts. UPI-based services have led to the creation of a wealth of innovative payment solutions. In addition, adoption rates of UPI payments and transactions originating through UPI-based apps have been so robust that they have adversely impacted traditional debit and credit card numbers.

The biggest frst movers have been services that continue to merge payments with messaging. Money transfer apps like Google Tez and Paytm payment services have added chatting features, and chatting apps like WhatsApp and Hike messaging now enable money transfers. The government of India launched the Bharat QR Code payments transfer mechanism in 2017 for cashless electronics payments based on smartphones. UPI payments are now used by e-commerce players across India as they look to add more users through a completely seamless payment mechanism.

Sources: https://www.npci.org.in/sites/default/fles/RETAIL%20PAYMENTS%20STATISTICS%20ON%20NPCI%20PLATFORMS_Mar%202018.xlsx https://www.instapay.today/tracker/india/ https://www.businesstoday.in/magazine/money-today/banking/the-d-way/story/243776.html https://www.npci.org.in/statistics 4+3 Live Countries /5 Japan FPII Rank

Now in its 45th year of operation, Zengin’s continual evolution has ensured it remains a leading faster payments service. Zengin was originally a real- time gross settlement (RTGS) service mandated by the central bank, but the addition of retail bank and payment functionality over six generations means JAPAN it now delivers the same immediate service to all customer segments. Service name Zengin

The service, managed by Zengin-Net Corporation, carries out the online Year live processing of domestic funds transfers between fnancial institutions that 1973 handle high, medium and low value transactions during normal business FPII (possible ‘open API interface’ usage) hours. In October 2018, Zengin will introduce 24/7 support, making it an 3 instant payment system with an “always on” operational stance. System operator Japanese Banks’ Payment Clearing Network Zengin is a central online system that processes inter-bank domestic fund (Zengin-Net), association owned by banks transfers in a real-time manner by connecting domestic banks through a network. Ofcial website Low-value payments are cleared between banks by the Bank of Japan (BOJ) after http://www.zengin-net.jp business hours in a designated-time, net settlement manner. High-value payments Level of government involvement (defned as more than JPY 100 million) are sorted and settled on an RTGS basis Central bank by BOJ-NET. The Zengin system covers only inter-bank credit transfer; transfers Average daily volumes/value 6.7 million between accounts in the same bank are completed by that bank. JPY 12.1 trillion

Speed of posting to accounts Real-time

Speed of settlement End of day net ACC. settlement ACC

Maximum value JPY 100 million

Individual and/or batch payments Individual and batch payments (batch usually future dated)

Operating hours Operating between 08:30 – 16:40

Payment applications All non-card based electronic payments P2P, P2B, B2B, B2P Live Countries

Japan cont.

As of the end of December 2017, the Zengin System included 1,287 fnancial institutions (member banks), such as banks, shinkin banks, credit cooperatives, labor banks and agricultural cooperatives. However, the Zengin system operates a two-tiered participation structure. Smaller fnancial institutions without direct connection can connect to the Zengin System via direct participants appointed to settle their net position on their behalf. To manage and control risk, Zengin monitors and manages the member banks’ net debit amount to ensure they do not exceed each bank’s declared limit.

To further innovation, Zengin is currently considering the use of open APIs to provide high value-added fnancial services that satisfy the needs of consumers and business customers alike. Zengin-Net has been developing the new platform Zengin EDI (ZEDI) that is compatible with XML messages, targeted to begin operation in December 2018. Zengin has also announced plans to soon move to the ISO 20022 standard to support additional remittance information.

Sources: http://www.zengin-net.jp http://www.zengin-net.jp/en/zengin_net/statistical_data/pdf/statistical_data_201712.pdf https://www.instapay.today/tracker/japan/ https://www.zenginkyo.or.jp/fleadmin/res/en/banks/payment-systems/paymentsystems.pdf , P27 Live Countries 4+4 /5 Kenya FPII Rank

PesaLink provides a 24/7 platform that enables customers to send money in amounts as low as KES 10 ($0.10) or as high as KES 1 million ($10,000), for a relatively low fee. It aims to promote fnancial inclusion and bring more of the underbanked population into the fnancial mainstream by offering customers KENYA an affordable, convenient payment mechanism. PesaLink is primarily a P2P Service name service but will provide P2B and B2B services in a second phase. PesaLink Year live The platform is operated by Integrated Payment Services Ltd (IPSL), a fully 2017 owned subsidiary of Kenya Bankers Association (KBA). Branded PesaLink, FPII (possible ‘open API interface’ usage) the inter-banking money transfer service allows customers to send money 4 from one bank account to another bank account (via an alias) in real time; it System operator supports all banks’ retail payment channels including mobile (not necessarily Integrated Payments Service Limited (IPSL) afliate of Kenyan Banking Association smartphones), ATM, internet banking, agency, bank branches and POS. The (PesaLink scheme) service is based on ISO 8583 message formats and supports foreign currency Ofcial website transactions in US dollars and euros. https://ipsl.co.ke

Level of government involvement Since its launch in February 2017, the platform’s subscriber base has Unknown continued to grow; 28 banks have adopted it and others are preparing to Average daily volumes/value join. In the frst fve months since PesaLink went live, the channel pushed Volume NA transactions valued at KES 8 billion, slightly above its KES 7 billion half-year KES 53 million

target. PesaLink was set up to rival the many mobile money services currently Speed of posting to accounts dominated by telecommunications providers like Safaricom’s M-Pesa. Real-time

Speed of settlement The initial phase of the project is based on P2P money transfers, but the Daily

second phase will include businesses and partnerships with government Maximum value agencies, mobile virtual network operators and other players in the mobile KES 1 million money transfer sector. Individual and/or batch payments Unknown Sources: https://ipsl.co.ke/2017/08/22/pesa-link-moves-sh8bn-in-the-frst-fve-months/ https://ipsl.co.ke/pesalink/#PesaLink_Advantages Operating hours https://www.instapay.today/tracker/kenya-2/ 24/7

Payment applications P2P through Mobile banking, (USSD & Application), internet banking, ATM, branch front ofce, agency banking and POS 4+2 Live Countries /5 Mexico FPII Rank

SPEI (Interbanking Electronic Payment System) was originally developed and operated as an RTGS system by Banco de México. It has since been upgraded to perform faster payments for retail and business scenarios. The aim is to offer the Mexican population practicality, agility and security in MEXICO online payments. It allows customers to make electronic money transfers Service name and payments through online banking almost instantaneously via a bank, Sistema de pagos electronicos interbancarios (SPEI) the internet or a mobile banking app. Given that Mexico has the second largest economy in Latin America, a sophisticated fnancial system and an Year live 2004 advanced telecommunications sector, the relatively low usage numbers are somewhat surprising, but are due partly to low levels of fnancial inclusion in FPII (possible ‘open API interface’ usage) 2 rural areas, and heavy reliance on cash. System operator Each payment order contains identifcation information for the sender Banco de México (Banixco) client and the client to whom the payment should be credited; participant Ofcial website www.banxico.org.mx/sistemas-de-pago/ banks must send customers payment orders to recipient banks within 30 informacion-general/sistemas-de-pago-de-alto- seconds of an order being made. Recipient banks must credit payments valor/interbanking-electronic-.html

to their customers within 30 seconds after payment is received. Safety Level of government involvement in the SPEI system is based on digitally signed messages; participants Owned and operated by the central bank

use authorized digital certifcates and passwords obtained in accordance Average daily volumes/value with the rules of the Public Key Infrastructure (Infraestructura Extendida 1.3 Million de Seguridad), developed by Banco de México. Banco de México plans to MXN 741 billion extend the service to include all government payments and provides a web Speed of posting to accounts interface with additional services including transaction tracking of individual Within 30 seconds payments and the provision of electronic payment receipts. SPEI uses an Speed of settlement open protocol that allows participants to develop automated processes that Hybrid, clears and settles within 20 seconds provide additional value-added services to customers. Maximum value Unknown

Sources: Individual and/or batch payments http://www.banxico.org.mx/sistemas-de-pago/informacion-general/sistemas-de-pago-de-alto-valor/interbanking-electronic-payme.html Individual payments http://www.banxico.org.mx/SieInternet/generaSerieGrafca.do?s=SF46189,CF252,13&l=en http://www.banxico.org.mx/SieInternet/generaSerieGrafca.do?s=SF46188,CF252,12&l=en Operating hours 24/7

Payment applications P2P, P2B, B2B and B2P (credit and debit transfers) Live Countries 4+2 /5 Nigeria FPII Rank

NIBSS Instant Payments (NIP) was the frst in Africa to offer a transfer NIGERIA service that guarantees instant funds availability to the benefciary. The Service name service is offered via participating banks’ internet and mobile banking NIP - Nigeria Inter-Bank Settlement System (NIBSS) Instant Payment platforms and the branch network, for retail and corporate customers. Year live Given the low levels of fnancial inclusion in the country, the uptake 2011 of NIP has been impressive. Banks in Nigeria promote NIP as a safe, FPII (possible ‘open API interface’ usage) convenient and efcient method for moving funds and reconciling 2 accounts. Since its launch, NIP has had wide usage among bank System operator Nigeria Inter-Bank Settlement System (NIBSS) owned customers across the country, where mobile initiation of transactions by all licensed banks and Central Bank of Nigeria. is vital to success. Mobile accounts for about 39 percent of NIP Ofcial website transactions, and 25 percent are initiated through internet banking. Bank https://nibss-plc.com.ng branch teller transactions account for 18 percent of NIP transactions; Level of government involvement 12 percent are foreign currency US dollar transactions. Third-party apps System developed in cooperation with central bank. currently account for just fve percent of transactions, but the number Average daily volumes/value is growing. A recent announcement that checks in Nigeria will soon 1,01 million be instantly cleared through NIP will eliminate the current 24-hour wait NGN 153.9 billion

waiting period. This illustrates how real-time payment systems need to Speed of posting to accounts be tailored to the infrastructure of the local economy. Real-time

Speed of settlement Sources: Deferred net settlement once per day https://nibss-plc.com.ng/wp-content/uploads/2018/01/eFactSheet_-Jan-Dec.-2017-.pdf https://www.instapay.today/tracker/nigeria/ Maximum value https://www.businessamlive.com/nigeria-inter-bank-settlement-systems-plc-ready-for-instant-clearing-of-cheques/ Consumers limit: NGN 1 Million (for consumers https://nibss-plc.com.ng/nip/ there is cumulative daily limit of NGN 5 million) Corporate limit: NGN 10 million

Individual and/or batch payments Individual payments

Operating hours 08:00 – 17:00

Payment applications P2P, P2B, B2B, B2P (Credit transfers, direct debits, bill pay, salary and e-commerce) 4+3 Live Countries /5 Philippines FPII Rank

The Bangko Sentral ng Pilipinas (BSP) launched InstaPay in April 2018, the latest automated clearing house under the National Retail Payment System (NRPS) Framework. InstaPay is an electronic funds transfer service that allows customers to transfer PHP funds almost instantly between accounts THE PHILIPPINES of participating banks supervised by BSB and non-bank e-money issuers Service name in the country. Available 24/7, individuals, businesses and government InstaPay institutions will be able to send and receive funds or make real-time Year live payments up to PHP 50,000 (just under $1,000) per transaction, without 2018 limit, in a day. FPII (possible ‘open API interface’ usage) 3

The transferred funds are instantly received in full, with no fee for the System operator receiving party. (Charges may, however, apply to sending parties.) Bangko Sentral ng Pilipinas for settlement Recipients may also be charged for cash withdrawals. InstaPay is BancNet for clearing accessible through mobile apps and internet banking facilities provided Ofcial website by participating banks and e-money issuers, with other channels following http://www.bsp.gov.ph/ soon. It is primarily focused on electronic commerce payments where Level of government involvement people would normally use a card or phone in paying transactions. Central bank supported Average daily volumes/value Unknown In a region where cash remains the primary purchasing mechanism, Unknown InstaPay is a signifcant milestone as the Philippines moves toward a Speed of posting to accounts more digital economy. This is a challenge in a country with high rates of Near real-time unbanked citizens and many small regional banks across the archipelago. Speed of settlement The BSP is aiming to capture 20 percent of transactions on InstaPay by Deferred net settlement 2020 as individuals and business migrate to instant payments. Maximum value PHP 50,000 Sources: http://www.bsp.gov.ph/publications/media.asp?id=4661 Individual and/or batch payments http://www.bsp.gov.ph/publications/media.asp?id=4529 Individual payments http://news.abs-cbn.com/business/04/23/18/bangko-sentral-launches-instapay-instant-fund-transfer-system https://www.rappler.com/business/200878-bangko-sentral-pilipinas-instapay-electronic-fund-transfer Operating hours http://manilastandard.net/mobile/article/263894 https://www.thepaypers.com/payments-general/flipino-bank-bsp-launches-instapay/772990-27 24/7 https://www.usaid.gov/philippines/partnership-growth-pfg/e-peso-activity https://business.mb.com.ph/2018/04/14/bsp-to-launch-2-automated-clearing-operations-on-april-23/ Payment applications https://pchc.com.ph/electronic-fle-transfer-network-eftn/ P2P, P2B, B2B, G2P, credit transfers, https://www.bancnetonline.com/BancnetWeb/viewNews.do?newsIdHidden=1432 mobile banking, internet banking 4+4+ Live Countries /5 Poland FPII Rank

Express Elixir, owned and operated by KIR, is Poland’s frst instant payment clearing system, and second such service in Europe. Launched in 2012, it enables instant payments from the payer’s account in one bank to the payee’s account in another bank, in near real-time. It enables instant transactions without the use of accounts of non-bank intermediary POLAND institutions; funds collected are deposited with the national bank so that the client’s money Service name does not leave the banking system. Express ELIXIR Year live The scheme is based on the ISO 20022. With 12 direct participants (commercial banks 2012 operating in the Polish market) and more than 60 cooperative banks fully onboard with the FPII (possible ‘open API interface’ usage) service, strong growth is predicted. Elixir has been crafted to ensure it is compliant with 4+ the SCT Inst rulebook; the expansion into euro payments across the SEPA region has been System operator foreseen for P2P, B2B, P2B, P2G and B2G payments. Krajowa Izba Rozliczeniowa (KIR)

Ofcial website In November 2017, the payment scheme was launched to enable the immediate https://www.kir.pl/en/banks/express-elixir/

transfer of funds to a benefciary’s telephone number, making it the frst non-card payment Level of government involvement scheme in Poland. The service only requires the phone number of the person to whom KIR was appointed by National Bank of Poland, the the money should be sent, assuming it is registered in the alias maintained by Polish Bank Association and 16 commercial banks the BLIK system operator. The bank then associates the telephone number with the bank Average daily volumes/value 28,000 account number, and funds are transferred instantly through Express Elixir. BLIK is available PLN 73.3 million to approximately 70 percent of the Polish banks’ clients, and has expanded to allow users to Speed of posting to accounts pay through numerous channels, including online, mobile, ATMs, shops, post ofces, local Near real-time (seconds) administration ofces and through various service providers. Speed of settlement Immediate With the faster payment rails in place, Poland is encouraging the creation of innovative Maximum value overlay services. Consequently, the Polish Banking Association drafted standards for PLN 100,000 communication interface between entities maintaining payment accounts with third parties – the Polish API. The goal is to enable the creation of convenient, modern and secure Individual and/or batch payments Individual payments interfaces for communication with banks maintaining payment accounts. KIR is working on the creation of services supporting the Polish API standard to ensure it is effective, fast and Operating hours 24/7 (varies per bank) offers wide access to third parties, while ensuring the highest level of security. Payment applications Sources: Mobile, credit transfers, BillPay, government https://www.instapay.today/country-focus-poland/ payments (tax and social insurance payments) http://www.expresselixir.pl/o-nas/operator-uslugi/ https://www.kir.pl/kontakt/biuro-prasowe/komunikaty-prasowe/kp2018/kir-dostarczy-uslugi-wspierajace-standard-polish-,4.html https://www.kir.pl/en/banks/elixir/system-elixir/ https://www.instapay.today/insight/instapay-interview-polands-kir/ http://alebank.pl/kir-1541-mln-transakcji-o-wartosci-4317-mld-zl-w-kwietniu/ 4+2 Live Countries /5 Republic of Korea FPII Rank

The Interbank Home/Firm Banking Network (HOFINET) began as an Automated Response Service (ARS) Network in April 1989. As the service evolved, intermediary electronic banking functions such as internet, phone and mobile banking service functions were added REPUBLIC OF KOREA to create what is now the Interbank Home/Firm Banking Network Service name (HOFINET). HOFINET - Interbank Home/Firm Banking Network Year live The customer service offers transaction confrmation inquiry through 2001 phones and internet PCs. Phone customers can access the services FPII (possible ‘open API interface’ usage) by calling the ARS number at any time. Because the Republic of Korea 2 has strong mobile device usage, HOFINET has proven to be a natural System operator foundation for the mobile payments explosion, eclipsing other payment Korea Financial Telecommunication and Clearings methods. HOFINET is not yet ISO 20022 compliant, but the Bank of Institute (Electronic Banking System (EBS) Korea (central bank) has initiated the migration path for all existing Ofcial website payment systems. www.kftc.or.kr Level of government involvement Central bank oversight Sources: www.kftc.or.kr Average daily volumes/value https://www.instapay.today/tracker/southkorea/ https://globalconnections.hsbc.com/downloads/treasury_management_profles_2016/kr.pdf 11 Million (2016) http://www.kftc.or.kr/kftcEn/data/EgovkftcData.do KRW 42 trillion (2016)

Speed of posting to accounts Real-time

Speed of settlement Deferred settlement twice a day, with intention of increasing the number of cycles as the scheme matures

Maximum value KRW 1 billion (corporate) KRW 100,000 (retail)

Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications P2P, P2B, B2B, B2P, all credit payments, mobile, online 4+4+ Live Countries /5 Singapore FPII Rank

FAST (Fast And Secure Transfers) is an electronic funds transfer service that allows customers of the participating banks to transfer Singapore Dollar funds from one bank to another almost instantly. FAST was introduced to meet the increasing demand from consumers and businesses for faster and more SINGAPORE efcient funds transfer. Prior to FAST, an interbank funds transfer took up to Service name three business days. FAST - Fast and Secure Transfers Year live FAST is available 24/7 and customers of the 20 participating banks can make 2014 interbank funds transfers of up to SGD 50,000 per transaction, subject to daily FPII (possible ‘open API interface’ usage) or monthly withdrawal limits. Access to FAST is via the customer’s internet 4+ banking service using devices like a tablet, smartphone or personal computer. System operator To send funds, customers need the recipient’s name (for reference) and bank Banking Computer Services (BCS) on behalf of account number. Using FAST, consumers and businesses can move funds The Singapore Clearing House Association (SCA) between conventional checking and savings accounts, and to credit and Ofcial website debit card accounts (when allowed by the participating bank). Customers can www.abs.org.sg/fast.php confrm the status of transfers by accessing their bank account via internet Level of government involvement banking, or through notifcation services provided by participating banks. Central bank operation and settlement Average daily volumes/value 94,000 The reason that only 20 banks currently participate is based on individual SGD 191 million banks’ commercial considerations. Those who do participate at present Speed of posting to accounts account for the bulk of Interbank GIRO transactions in Singapore, but more Near real-time (<15 seconds) banks are expected to join in the future. The aggregate speed of transactions Speed of settlement in Singapore presents many distinct challenges, especially from the business Deferred settlement twice a day, with intention community. Despite its modern image, acceptance of electronic payments in of increasing the number of cycles as the scheme Singapore is inconsistent, and reducing check usage has proven to be a slow matures process. Corporate adoption of electronic payments is somewhat inhibited Maximum value by a lack of access to FAST, the requirements for liquidity/working capital to SGD 50,000 run day-to-day businesses and limited pressure from consumers to expand Individual and/or batch payments instrument acceptance beyond cash and checks. Individual payments Operating hours 24/7

Payment applications Credit transfers, direct debits, bill payment, P2P, P2B, B2B, B2P with merchant payments and mobile. Live Countries

Singapore cont.

The Association of Banks in Singapore (ABS) introduced a mobile payment service last year called PayNow. The service enables instant peer-to-peer funds transfer to be made to a mobile number or Singapore NRIC/FIN ID number that is linked to a specifc bank account through FAST. The service is free, secure, available 24/7 and can make instant payments via QR codes.

The Monetary Authority of Singapore (MAS) has given impetus to further payments innovation with the publication of the “Singapore Payments Roadmap.” The aim is to drive innovation and adoption of payment developments that will facilitate further payments growth for consumers and businesses across the island nation. Singapore is now well-developed in the implementation of an API access layer that operates alongside the FAST service, to encourage innovative payment solutions.

Sources: https://www.nets.com.sg/company/newsroom/regional-collaboration-for-real-time-cross-border-payments-across-asia www.abs.org.sg/fast.php http://www.moneysense.gov.sg/understanding-fnancial-products/banking-and-cash/types-of-products-and-services/fast.aspx http://www.mas.gov.sg/~/media/MAS/Singapore%20Financial%20Centre/Why%20Singapore/Payment%20and%20Settlement%20 Systems%20redirect%20pages/H1%202017%20Retail%20Payment%20Statistics%20PDF.pdf https://www.abs.org.sg/consumer-banking/pay-now 4+4 Live Countries /5 Spain FPII Rank

A few years ago, the Spanish central bank (Banco de España), along with industry stakeholders, embarked on a strategy to develop a real- time payments system for Spain. The frst step focused on the mobile market with an overlay service for instant payments. This resulted in the SPAIN launch of P2P mobile payments in 2016 under the brand name Bizum. Service name Currently, 27 banks provide Bizum services of P2P payments within their Iberpay mobile banking app. Bizum enables customers to pay individuals, or make Year live purchases at physical stores or e-commerce sites by associating a mobile 2016 phone number with a bank account. FPII (possible ‘open API interface’ usage) 4

The second (and more ambitious) step was the interbank space and System operator ensuring interoperability and full compliance with the SEPA Regulations for Sistema Nacional de Compensación Electrónica (SNCE)

SCT Inst. This second phase is operated by Iberpay, which already controls Ofcial website the national electronic clearing house (SNCE). It went live in November www.iberpay.es

2017 with 80 banks offering instant SEPA payments. Level of government involvement Central bank mandate

To conform to open banking standards, there are two types of services: Average daily volumes/value basic and value-added. On top of the basic service, participants can 24,000 create innovative services to meet customer demands. Following EU EUR 2.1 million requirements, the ISO 20022-based service provides interoperability within Speed of posting to accounts the Spanish fnancial system and with all SEPA countries. Spain will be Real-time among the frst euro countries to offer the SEPA Instant Credit Transfer Speed of settlement Clearing and Settlement of operations in three daily scheme to customers. cycles on the TARGET2 platform in the “multilateral net” mode

Sources: Maximum value https://www.instapay.today/tracker/spain/ EUR 15,000 https://www.europeanpaymentscouncil.eu/news-insights/insight/spanish-payment-landscape-innovation-gains-tradition https://www.bbvaresearch.com/wp-content/uploads/2016/01/DEO_Jan16_Cap4.pdf https://www.iberpay.es/Secciones/01Iberpay/DefaultIberpay.aspx Individual and/or batch payments https://www.iberpay.es/Home.aspx Unknown https://www.instapay.today/tracker/spain-bizum/ Operating hours 24/7

Payment applications Credit Transfers, mobile P2P service, shared infrastructure services for all the Spanish banks. P2P mobile and internet banking channels initially. Some banks also intend to offer instant payments from bank branches 4+3 Live Countries /5 South Africa FPII Rank

South Africa interbank Real-Time Clearing (RTC) payment system processes electronic credit payment instructions issued by the payer to the paying bank, to transfer funds from the account of the payer to the account of a benefciary. RTC was developed to provide increased transaction SOUTH AFRICA speed and convenience to customers. Once the customer is verifed, Service name the transfer is performed (funds permitting). The payment instruction is RTC - Real-Time Clearing then immediately processed, and the payee credited within 60 seconds. Year live Real-time payments are offered across many banking channels including 2006 branches, call centers, internet and phone banking, and through most local FPII (possible ‘open API interface’ usage) banks. 3 System operator Operated by BankservAfrica, RTC enables customers to move single BankservAfrica credit payments in real-time to benefciaries, 24/7. The clearing system is Ofcial website integrated with the central bank settlement service that supports multiple http://www.bankservafrica.com/PSO-Services/ settlement windows and includes the ability to force settlement when a Real-time-clearing participating bank reaches its daily exposure limit. To reduce complexity Level of government involvement Managed by Pasa, the Payment System for banks, BankservAfrica handles interbank bilateral billing automatically. Management Body designated by South Africa Banks can view their net settlement positions in relation to other banks Reserve Bank to manage and regulate payment with immediate access to management information (updated hourly). systems, Central Bank settlement Average daily volumes/value 42,000 (2016) The RTC service is currently ISO 8583 format based, but a full migration ZAR 690 million (2016) to ISO 20022 is planned for June 2019. South Africa has committed to Speed of posting to accounts form the basis of the Southern Africa Development Community (SADC) Within 6 seconds Payment System Project, established to promote regional interoperability Speed of settlement for electronic payments among the 15 countries in the community. Deferred net settlement with hourly cycles between 08:00 and 16:00 and 22:30 to 23:30

Sources: Maximum value https://www.instapay.today/tracker/southafrica/ http://www.bankservafrica.com/PSO-Services/Real-time-clearing ZAR 5 million until 16.00 ZAR 250,000 during non-business hours

Individual and/or batch payments Individual payments

Operating hours 24/7 (varies per bank)

Payment applications P2P, P2B, B2B, B2P (Credit transfers, direct debits, Billpay, Salary, eCommerce) 4+2 Live Countries /5 Sri Lanka FPII Rank

LankaPay, operated by LankaClear, was launched under the guidance of the Central Bank of Sri Lanka (CBSL, part-owners of LankaClear) to offer member bank customers the convenience and fexibility of making inward and outward fund transfers within the country – at a nominal fee SRI LANKA and in real time, 24/7. LankaPay supports online real-time fund transfers Service name (push) and direct debit payments (pull), enabling bank customers to make LankaPay payments through ATM, mobile, POS and online. LankaPay makes account Year live postings in real time with settlement resolved at end-of-day. The vision 2013 was for a highly efcient and secure real-time payment system for all types FPII (possible ‘open API interface’ usage) of retail payments, government payments, third-party fund transfers, and 2 utility bill payments. All the major banks are already connected. System operator Lanka Clear - Sri Lanka Interbank Payment System As an extension to the LankaClear’s other clearing capabilities, LankaPay (SLIPS) is based on ISO 8583 messaging standards with no current plans to Ofcial website migrate to ISO 20022. However, the next evolution of LankaPay is expected http://www.lankaclear.com/ to include bill payment capabilities. The extended scheme is still being Level of government involvement Central bank direct involvement, Lanka Clear is rolled out with all commercial banks strongly committed to this national partially owned by government via Central Bank. Rest initiative. is shared amongst the commercial banks of Sri Lanka.

Average daily volumes/value Sources: 122,500 http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/periodicals/payment_bulletin/2017/Payments_Bulletin_1Q2017.pdf LKR 7.03 billion http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/periodicals/payment_bulletin/2017/Payments_Bulletin_3Q2017.pdf http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/periodicals/payment_bulletin/2017/Payments_Bulletin_3Q2017.pdf Speed of posting to accounts Real-time

Speed of settlement Deferred net settlement twice per day

Maximum value LKR 5 million

Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications Credit transfers (P2P, P2B, P2G, through ATM, mobile, POS and internet) and direct debits. 4+4 Live Countries /5 Sweden FPII Rank

Sweden’s central bank, Sveriges Riksbank, has declared its intention for Sweden to be a cashless society by 2020. Real-time payments are vital in achieving this goal. In 2012, Bankgirot launched Payments in Real-time (BIR) to provide a mechanism for instant payments, 24/7. BIR SWEDEN offers an open infrastructure that gives banks and payment institutions Service name an open API for creating their own offerings to augment the customer BIR - Payments in Real-time experience, and a real-time platform to continue building the payments Year live of the future. 2012 FPII (possible ‘open API interface’ usage) The frst overlay service built on BIR was the mobile payments 4 app, which launched in 2012. This collaborative initiative between System operator several banks supports both P2P and consumer-to-business Bankgirot (owned by 7 banks)

transactions. Ofcial website https://www.bankgirot.se/en

Participating banks must apply for membership to the BIR scheme and Level of government involvement commit to providing customer access and continuous fulfllment. BIR was System developed in cooperation built on modern international format standards (ISO 20022 and SWIFTNet with the central bank FIN) and operates a prefunded settlement mechanism with accounts at Average daily volumes/value 758,904 (2017) BIR to eliminate credit risk between participating banks. SEK 280 million (2016)

Speed of posting to accounts BIR is a fast-growing service with more than three-quarters of a million Real-time transactions per day – representing nearly 50 percent growth compared Speed of settlement to last year. Constant, immediate settlement

Maximum value Sources: SEK 150,000, but individual banks may set own https://www.instapay.today/tracker/sweden/ limits with average maximum amount restricted https://www.bankgirot.se/en/about-bankgirot/our-offer/payment-systems/payments-real-time/ https://www.aciworldwide.com/-/media/fles/collateral/trends/executive-guide-to-immediate-payments-tl.pdf by banks to about SEK 20,000 https://www.bankgirot.se/en/about-bankgirot/about-us/payment-statistics/ https://www.getswish.se/privat/swish-funktioner/ Individual and/or batch payments https://www.instapay.today/tracker/sweden-swish/ Individual payments

Operating hours 24/7

Payment applications P2P, P2B, mobile payments (Swish), eCommerce merchants and in-app payments (added in January 2017) 4+4 Live Countries /5 Switzerland FPII Rank

The Swiss Interbank Clearing (SIC) system has been processing payments in real time since 1987 with its operations monitored and steered by the Swiss National Bank (SNB). The SIC payment system enables institutions worldwide to process almost all interbank liabilities – from large-value to retail SWITZERLAND transactions – in Swiss francs, rapidly and securely. Service name SIC - Swiss Interbank Clearing

Each participating institution maintains a settlement account with SIC, Year live which is balanced daily with the use of a sight deposit account at the SNB. 1987 The SNB, as the system manager of SIC, has the option to verify cover- FPII (possible ‘open API interface’ usage) funds of all institutions and to provide a participant with liquidity if needed. 4 SIC participants have real-time access to all data relating to their account, System operator including the ability to directly monitor the settled incoming and outgoing SIX Group, owned by banks

payments, current account balances and pending payments. Ofcial website http://www.six-interbank-clearing.com/en/home The Swiss faster payment service leverages the established SIC RTGS /payment-services/sic.html platform and takes advantage of economies of scale by pooling liquidity Level of government involvement across both typesof payments. Despite the frequent use of SIC for consumer Swiss National Bank settlement and oversight payments, Swiss banks do not currently support P2P payments using the Average daily volumes/value 2.4 million (2018) network, though an exploration to extend the service to accommodate them is CHF 180 billion (2018) underway. Speed of posting to accounts Real-time With the fourth generation of the SIC RTGS platform released in April 2016, Speed of settlement all payments utilize ISO 20022 messaging, with plans to switch all participant Settlement at 16:40 each business day banks to SIC4 in late 2018. SIC4 retains a high level of security, reliability, through the RTGS system

performance and cost efciency, and has the capability to keep pace with Maximum value future standards, functionality and compliance demands. SIX Group is Unknown positioning the Swiss domestic payment system for greater innovation, Individual and/or batch payments fexibility and efciency, and enables better integration with regional and global Individual payments payment schemes. Operating hours 24/5 on weekdays only Sources: https://www.instapay.today/tracker/switzerland/ Payment applications https://data.snb.ch/en/topics/fnma#!/cube/zavesic?fromDate=2017-01&toDate=2018-01&dimSel=D0(T0,MT0,DA0,T1,MT1,DA1) P2P, P2B, B2B, B2P, credit transfers https://snb.ch/en/iabout/paytrans/sic/id/paytrans_swiss_interbank_clearing#t2 https://www.six-interbank-clearing.com/en/home/payment-services/sic.html and bill payment https://www.six-interbank-clearing.com/en/home/payment-services/sic/sic-transaction-prices.html 4+1 Live Countries /5 Taiwan FPII Rank

The CBC Interbank Funds Transfer System (CIFS) was established in 1995 and is operated and governed by the Central Bank of the Republic of China. Originally an RTGS service, CIFS has expanded to provide real-time payments processing for low-, medium- and high- TAIWAN value transactions. Participants of the CIFS include banks, investment Service name and trust companies, and bill fnance companies. Those that maintain CIFS - CBC Interbank Funds Transfer System transaction accounts with the central bank may directly use the CIFS to Year live transfer funds. 1995 FPII (possible ‘open API interface’ usage) The CIFS once operated in a dual system of designated-time netting and 1 real-time gross settlements, but payments are now processed through System operator the CIFS individually and continuously throughout the day, in real time. Central Bank of the Republic of China

The service is a proprietary XMS-based mechanism; there are no known Ofcial website plans to upgrade or migrate to a more open ISO standard. https://www.fsc.com.tw/EN/fnancial-index.html

Level of government involvement Sources: Unknown https://www.fsc.com.tw/EN/fnancial-index.html https://www.cbc.gov.tw/ct.asp?xItem=936&CtNode=497&mp=2 Average daily volumes/value 275,000 (2015) TWD 1.5 billion (2015)

Speed of posting to accounts Real-time

Speed of settlement Real-time

Maximum value Unknown

Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications P2P, P2B, B2B 4+4 Live Countries /5 Thailand FPII Rank

Under direction from the Payment Systems Committee (PSC) of the Bank of Thailand, the National Interbank Transaction Management and Exchange (ITMX) was established as the key inter-bank payment infrastructure and central data processing system that exchanges, manages and processes data THAILAND across member banks/organizations to support e-payment, electronics fund Service name transfer and similar transactions. As the frst stage of the Thai government’s PromptPay national e-payments initiative, ITMX implemented PromptPay, a national Year live scheme for real-time payments between accounts. 2017 FPII (possible ‘open API interface’ usage) Bank customers can transfer funds to any other accounts among the 20 4 member banks. There is a transaction limit of THB 50,000 per transaction System operator (about $1,500.) Once initiated, the benefciary receives funds immediately National Interbank Transaction Management and Exchange (ITMX) and the Thai Banking Association using ISO 8583 formats (no plans to upgrade to ISO 20022). The service (PromptPay) enables consumers and businesses to pay who they want, when they Ofcial website want; it allows businesses to improve cash fow and the e-commerce and http://www.itmx.co.th/ m-commerce experience for customers with reduced dropout rates and Level of government involvement enhanced fraud mitigation. Government facilitated

Average daily volumes/value The service uses an alias benefciary mechanism (AnyID) to eliminate Unknown the need to enter long bank account numbers. The national account alias Unknown service allows bank account holders to register bank accounts against a Speed of posting to accounts proxy id of their National Identity Number or a mobile phone number. Over Less than 1 minute time, infrastructure may serve to open the market to competition by allowing Speed of settlement fnancial institutions to develop their own money transfer applications on Deferred net settlement preferred internet or mobile channels. To transfer funds, users simply enter the Maximum value recipient’s mobile phone number or other identifer, and select the appropriate Unknown contact from their mobile phone contact list. Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications P2P, P2B, G2P, P2G, credit transfers, transfers on ATM, mobile banking, internet banking Live Countries

Thailand cont.

Other features like “Request to Pay” allow individual and corporate payees to request payment from other people. Cross-bank real-time bill payment removes reliance on specifc banking arrangements between biller and payees.

As in other APAC nations where credit card ownership is low, Thailand is promoting growth of the service with merchant QR codes, which support low-value transactions by street vendors. Thai banks are planning to operate services that make use of QR codes to originate faster payments transactions through PromptPay. In one instance, consumers can scan the merchant’s QR code and enter the amount to pay so funds are transferred immediately, with acknowledgments to both parties. Street sellers, motorbike taxis and other merchants simply need to register to get a static QR code that they can display for customers to initiate the payment.

Additionally, some of the QR codes may soon become dynamic, to accommodate promotions on products and services; another variation will allow merchants to request specifc payments to be made at the time of sale. Merchants and other payees will be able to scan a unique QR code, generated by the payer’s mobile app (which includes additional reconciliation data). The request is then sent to the payer’s mobile app to confrm the payment. These services are strongly supported by a government that is keen to move toward a more digital economy with a greatly reduced reliance on cash, and by fnancial institutions who want to acquire new merchant customers.

Sources: http://www.bangkokbank.com/OnlineBanking/PersonalBanking/iBanking/BualuangiBanking/Hints/Pages/Transfer_PromptPay.aspx http://www.itmx.co.th/homepage/service/readNews/id/126# https://www.bangkokpost.com/business/fnance/1436174/7-000-state-agencies-preparing-e-payments https://promptpay.bangkokbank.com/#/ 4+2 Live Countries /5 Turkey FPII Rank

The Turkish Real-time Payment System (RPS) processes low priority customer payments in near real-time. Transactions are settled continuously and irrevocably in real time using the participants’ RPS settlement accounts held at the central bank. The RPS has a maximum TURKEY 15-minute processing time but currently averages 30 seconds; it has no Service name value thresholds. RPS - Retail Payment System Year live All the major banks in Turkey participate in the RPS service, which 2012 operates during normal business hours only (08:30 to 17:30, Monday to FPII (possible ‘open API interface’ usage) Friday). All messaging is based on proprietary formats with no current 2 plans to offer ISO 20022-based transactions. System operator Central Bank of Turkey

Sources: Ofcial website https://www.instapay.today/tracker/turkey/ http://www.tcmb.gov.tr/wps/wcm/connect/ http://www.tcmb.gov.tr/wps/wcm/connect/31501641-178e-470b-8888-aa91c2958466/FPAIP_ING_Beyan.pdf?MOD=AJPERES&CVID= TCMB+EN/TCMB+EN/Main+Menu/PAYMENT http://www3.tcmb.gov.tr/yillikrapor/2016/fles/en-tcmb2016.pdf https://www.afponline.org/docs/default-source/default-document-library/pdf/17-11-29-afp-updated-country-report-turkey.pdf?sfvrsn=0 +SYSTEMS/Payment+Systems+in+Turkey http://www.tcmb.gov.tr/wps/wcm/connect/31501641-178e-470b-8888-aa91c2958466/FPAIP_ING_Beyan.pdf?MOD=AJPERES&CVID= Level of government involvement Central bank created and operates this system

Average daily volumes/value 1.5 million (2016) TLR 45.36 billion (2016)

Speed of posting to accounts Real-time

Speed of settlement Settlement at 16:40 each business day through the RTGS system

Maximum value Unknown

Individual and/or batch payments Individual payments

Operating hours 08:30 until 17:30 weekdays only

Payment applications P2P, P2B, B2B, credit transfers 4+4 Live Countries /5 UK FPII Rank

Launched in 2008, the UK’s Faster Payment system was one of the frst bespoke instant payment services. The UK Faster Payment service allows banks to access the central infrastructure in different ways. Banks can connect directly to the central infrastructure or interface indirectly through UNITED KINGDOM a sponsor bank agreement (that may or may not offer the full 24/7 faster Service name payment capability). A third option called the New Access Model allows UK Faster Payments a payment provider to connect to a technical aggregator, to combine Year live demand from multiple participants and create economies of scale. The third 2008 connectivity option is aimed at increasing access for the smaller operator FPII (possible ‘open API interface’ usage) that may not have sufcient volume to cover the initial fxed costs of a direct 4 connection, or that may want a real-time, 24/7 service that is not currently System operator available through a sponsor bank. Additionally, the New Access Model helps Faster Payments Scheme Ltd, non-proft association, owned by banks, runs on challenger banks build their business case for faster payments: Payment real-time platform providers get a guaranteed real-time payments service, 24/7, at a lower per Ofcial website transaction cost than the PSP can achieve by connecting directly to the central http://www.fasterpayments.org.uk/ infrastructure itself. Under the new scheme, fntechs can gain accreditation Level of government involvement and a “trust mark” as technical aggregators. Central bank settlement and oversight

Average daily volumes/value After a decade of operations with a steady double-digit growth, UK Faster 5 million (2017) Payments now has 22 directly connected institutions plus 400+ indirectly GBP 4 billion (2017)

connected institutions, which has created 55 million current account holders Speed of posting to accounts and 115 million individual addressable accounts. There is currently a limit 15 second confrmation, posting within 2 hours

of GBP 250,000 per transaction (up from the original GBP 15,000), but the Speed of settlement scheme is looking to increase this dramatically, to include business and Deferred net settlement, 3 cycles/day

treasury payments, rivalling RTGS. UK Faster Payments covers many use Maximum value cases, from simple P2P services like splitting a restaurant bill, to small micro- GBP 250k (varies by bank) business payments for tradesmen, to full corporate payment services. Individual and/or batch payments Individual and batch payments (Direct Corporate Access supported by some banks)

Operating hours 24/7

Payment applications Online banking and mobile payments, bill payments, forward dated payments, standing orders (recurring), and P2P, P2B, B2B, B2P transactions Live Countries

UK cont.

Many innovative services have recently launched on the faster payment rails. For example, one imaginative service called #YayDelay uses an algorithm to monitor real-time train delays. Twitter users whose ”tweets” contain the hashtag #YayDelay can unlock half-price or free Gordon’s London Dry Gin & tonics during a frustrating commute.

Despite being only 10 years old, the UK launched a complete overhaul of the UK Faster Payments strategy in 2017 to keep up with technology evolution, regulatory demands and changing customer expectations. The Blueprint for the Future of UK Faster Payments maps out the road ahead for a deep renovation of the UK payments industry, including moving to a New Payments Architecture (NPA), a new scheme operator, new access models and new participants. The new payments infrastructure will handle the processing of payments that currently go through the retail payment schemes, Bacs, Faster Payments and, in time, a new check image clearing system, bringing them under a single instant payment mechanism. The vision is to create a genuinely open framework for payments, that can bring new services to market faster, and build real value for users around the core transactions. Importantly, NPA will be fully based on ISO 20022 rather than the proprietary formats that we see today.

Sources: http://www.fasterpayments.org.uk/benefts-faster-payments https://www.psr.org.uk/sites/default/fles/media/PDF/PSODG-Report-2017.pdf https://implementation.paymentsforum.uk/sites/default/fles/pictures/timeline%20alt%202.jpg https://www.instapay.today/tracker/uk/ http://www.fasterpayments.org.uk/sites/default/files/downloads/page/An-Introduction-to-the-UKs-Interbank-Payment-Schemes_February%202017.pd http://www.fasterpayments.org.uk/sites/default/fles/Annual%20Summary%20of%20Payment%20Statistics%202017.pdf http://www.fasterpayments.org.uk https://www.instantpaysummit.com https://www.eagleeye.com/company/news/ca-personalisation-beyond-a-name-event 4+4 Live Countries /5 US FPII Rank

Mobile technology and digital commerce are driving the need for a safer and faster payments system in the US In response, The Clearing House launched its real-time payments system, RTP, in November 2017, which is open to all US fnancial institutions. As the frst new major payments infrastructure since the U.S.A. ACH in the 1970s, RTP is built to support digital commerce and is intended Service name to become a platform for innovation. In addition to clearing and settling RTP – Real-Time Payments payments in seconds, RTP includes features like payment confrmation and Year live the request for payment messaging that enable pull payments to deliver bills 2017 and invoices through digital channels, that provide insight into the life cycle of FPII (possible ‘open API interface’ usage) the payment. 4 System operator Since there is no mandate for faster payments in the US, The Clearing House The Clearing House

is doing extensive marketing and outreach to evangelize the new service Ofcial website and demonstrate how RTP is complementary to current payment offerings https://www.theclearinghouse.org/payment- in enabling end-user value, and expanding traditional treasury management systems/real-time-payments services with data rich offerings on new real-time payment rails. The Clearing Level of government involvement Consistent with the Consumer Financial Protection House is looking at many use cases where an instant payment mechanism Bureau’s (CFPB) guiding principles for faster would add signifcant value to all parties. These range from simple P2P payments networks and the 36 criteria set forth by transfers to business supply chain payments for just-in-time inventory and the Federal Reserve Faster Payments Task Force trade settlement. Other possibilities include instant payments for cash-on- Average daily volumes/value delivery services for wholesaler/retailer relations, payments on behalf of N/A institutional clients for brokerage commissions, investment management Speed of posting to accounts fees, improved corporate liquidity management and the replacement of check Real-time payments for corporate and business clients. The use of ISO 20022 formats Speed of settlement would deliver standard purchase order data together with the payment to Instant and continuous simplify the reconciliation processes. Maximum value USD 25,000

Individual and/or batch payments Individual payments

Operating hours 24/7

Payment applications P2P, P2B, B2B, B2P credit transfers, requests for payments (e-invoicing & e-billing), remittance advice, payment acknowledgment, request for information and response Live Countries US cont.

Meanwhile, Zelle (rebranding of the P2P clearXchange service now owned by EWS) continues to be a signifcant contender, as more fnancial institutions join the closed network. P2P payment mechanisms and operations could expand to C2B and B2C targets as well.

It is likely that the US payments landscape will change and evolve over the coming years as signifcant players join forces, but whether the many faster payment schemes under evaluation by the Federal Reserve are complementary or conficting remains unclear. The Fed continues its hand- off position of intentionally not becoming a network operator, acting only as a facilitator to ensure the criteria outlined are maintained for the safety and security of the wider fnancial ecosystem.

Sources: https://www.instapay.today/tracker/united-states-clearing-house/ https://www.theclearinghouse.org/payments/real-time-payments https://www.instapay.today/?s=united+states Live Countries Pan-European Payments

The European journey toward instant payments has formally begun. The emerging Single Euro Live in 15 Countries Payments Area (SEPA) Instant Credit Transfer (SCT Inst) scheme created by the European Payments By May 2018, after six months of operation, over 1,000 PSPs joined the SCT Inst scheme, accounting Council (EPC) went live in November 2017. At launch, nearly 600 payment service providers (PSP) for participation by about 25 percent of all European PSPs. As of mid-2018, these15 countries have from eight European countries offered instant payment solutions. Back in November 2016, the EPC banks that have signed up and adhered to the EPC SCT Inst scheme: Austria, Estonia, Germany, Italy, published a rulebook for an instant credit transfer scheme applicable throughout the Single Euro Latvia, Lithuania, the Netherlands, Spain, France, Portugal, Malta, Bulgaria, Sweden, Belgium and the Payments Area, known as SCT Inst. UK. However, varying numbers of PSPs in each country have joined the scheme, and there is a large discrepancy between the numbers of PSPs offering the service in each locale. The scheme aims to provide consumers and businesses with the ability to confdently make secure payments in seconds. According to the SCT Inst rulebook, services must be available 24/7 and Banks in other countries are expected to come online throughout 2018 and 2019 to progressively provide the benefciary with immediate access to funds. Banks implementing SCT Inst across span the 34 SEPA countries, making SCT Inst the primary scheme for all euro transactions. With Europe can choose from a number of clearing and settlement mechanisms to suit their business the basic groundwork of euro harmonization accomplished through classic SEPA payments, SCT model (described in more detail below). Inst speeds up the process and brings payments into the 21st century. At the SCT Inst launch in November 2017, the EPC predicted that by 2020, over half of all PSPs in Europe will offer SCT Inst Ofcially, funds up to a maximum of EUR 15,000 can be transferred in less than 10 seconds. payments. However, local implementations can adapt these limits to meet requirements with higher payment limits and shorter (or longer) payment timelines. The ofcial maximum amount per transaction While all bank implementations are operating under the same SCT Inst rulebook, the EPC rulebook will likely grow from the current limit to make the scheme more attractive for corporations and the for SCT Inst allows some variation for local implementations to refect national requirements. business community. As the services roll out, customers across the continent will be able to make Local banks or communities are free to agree on higher maximum amounts, and the clearing and and receive instant euro credit transfers within their national borders as well as cross-border, with settlement time limits can vary according to local requirements. Some countries, like Belgium, are immediate funds availability. looking to remove the maximum limit of EUR 15,000 altogether. Meanwhile, the Netherlands could implement a two-speed service for time-critical and non-time-critical transactions, depending on the use case. Live Countries Pan-European Payments cont.

Clarity on Clearing Currently, there are several clearing and settlement options for Another option, STET, is initially focused on France and Belgium. Despite the availability of the Pan-European solutions noted above, banks wishing to offer SCT Inst to customers including EBA, the Importantly, STET is the only instant clearing system that is there are several countries that are actively rolling out domestic Systèmes Technologiques d’Echange et de Traitement (STET) currently taking part in the API specifcation effort for the second favors of SCT Inst with minor changes to suit the local market. in France and the TARGET Instant Payment System (TIPS). The Payment Services Directive (PSD2), and the use of APIs as part For example, the Dutch Payments Association is working on a clearing and settlement mechanism (CSM) market is highly of the value proposition. solution for the Dutch market and Belgium is looking at a locally competitive and as a result, should continue to inspire innovation adapted SCT Inst service. over the coming years. The early launches are based on the EBA To support specifc requirements like shorter exchange times and clearing service through RT1, except for France and Belgium who alternative maximum amounts, STET has also added community- Europe remains a vibrant ecosystem and continues to be a hub are live with the STET service. oriented functionality and governance. Beyond clearing and for payment innovation as new use cases are developed, and settlement, STET is looking at related services to support PSPs PSD2 and SCT Inst come together to create a new experience for EBA clearing and settlement is currently the most prominent in the areas of risk mitigation, security and facilitating the launch the customer. Despite SCT Inst being live since November 2017, SCT Inst-based initiative. EBA Clearing’s RT1 solution is presently of new payment services. This includes a directory service for Europe remains in a state of fux and presents a haphazard and supported by 39 funding banks, but 70 others have shown strong mobile number to international bank account number (IBAN) look inconsistent picture to consumers. Banks across the continent interest creating a footprint that spans 19 countries. The EBA, up, scoring instant payments for fraud (similar to card payments), continue to evaluate their position, the alternatives open to them owned by over 50 European banks, is currently looking into value- and supporting anti-money laundering screening. and the local options being implemented. added services (VAS) on top of the RT1 solution, but these are yet Sources: to be formally defned. These VAS include addressing services A number of other domestic and regional CSMs including https://www.instapay.today/article/sepa-instant-credit-transfer-sct-inst-payment-scheme-goes-live/ (aliases) or centralized fraud monitoring. equensWorldline (primarily the Netherlands and Germany), https://www.mastercard.com/us/company/en/docs/SEPA%20backgrounder_four%20party%20model_fact%20sheets.pdf https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer NETS (Scandinavia) and Iberpay (Spain) are offering clearing https://www.instapay.today/tracker/europe/ https://www.instapay.today/wp-content/uploads/2016/10/EBA-Clearing-Instant-Payments-ebook.pdf An alternative option for payment service providers is the and settlement services. Some of these SCT Inst-compliant https://www.ebaclearing.eu/services/instant-payments/introduction/ https://www.instapay.today/european-csms-enabling-sct-inst-page-1-2/ TIPS service from the European Central Bank and the member CSMs are expanding to offer their services in other nations https://www.europeanpaymentscouncil.eu/what-we-do/participating-schemes/register-participants/registers- state national banks (together referred to as the Eurosystem), within the Eurozone. Large tier-1 domestic banks will likely use participants-sepa-payment-schemes https://www.europeanpaymentscouncil.eu/sites/default/fles/infographic/2017-11/EPC%20infographic_ scheduled to launch in late in 2018. TIPS extends the central bank multiple clearing options (EBA, STET, TIPS, etc.) depending on the SCT%20Inst%20top%20uses_November%202017.pdf https://www.europeanpaymentscouncil.eu/news-insights/news/instant-credit-transfers-are-now-reality-eight-european-countries money settlement to 24/7 availability to facilitate the emergence destination. For example, French banks may send national SCT https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.instapay.today/article/sepa-instant-credit-transfer-sct-inst-payment-scheme-goes-live/ of instant payments; it has caused some PSPs to reassess their Inst payments through STET, but cross-border payments through http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32012R0260&from=EN current instant payment projects. The participation criterion is EBA or TIPS. https://www.europeanpaymentscouncil.eu/news-insights/news/frst-french-banking-group-joins-sepa-instant-credit- transfer-scheme identical to TARGET2 (the established European RTGS system). http://www.fntechist.com/france-gets-board-ecp-sepa-instant-payments-scheme/ https://www.bank.lv/en/about-us/tasks/payment-systems/instant-payments Given the existing wide-scale participation in TARGET2, TIPS could https://www.instapay.today/tracker/latvia/ https://www.instapay.today/article/latvian-central-bank-unveils-instant-payments-system/ be the public service CSM option that banks favor, rather than https://www.lb.lt//en/centrolink#ex-1-2 routing transactions through a CSM that could be part-owned by https://www.betaalvereniging.nl/en/focus/giro-based-and-online-payments/instant-payments/ https://www.febelfn.be/en/belgian-banking-community-chooses-stets-core-platform-their-future-clearing-and-settlement- their competition. system Under Development Under Development

Canada Czech Republic Hong Kong Hungary Malaysia Under Development Canada

Canada is currently developing a new real-time payments system operating under the working title of the Real-Time Rail (RTR). The service will operate 24/7 and ensure the real-time delivery of low-value payments in a matter of seconds. It will allow Canadians to make payments using aliases – like a mobile number or email – and serves as a platform for innovation by supporting new API-based value-add service offerings built on top of the system. There are currently two settlement models under evaluation: pre- funded real-time settlement and deferred net settlement. Regardless of the settlement confguration, prefunding cash or acceptable forms of collateral will be held at the central Bank of Canada.

Canada is currently in the design, build and testing phase, with plans to launch the service toward the end of 2019.

Canada already offers a ubiquitous electronic push-payment solution for consumers with the Interac e-Transfer service, making more than 44,000 money transfers totaling over CAD 173 million in value daily. It remains unclear whether Canada will enhance the existing infrastructure of Interac or opt for a complete refresh of the payment rails, as many other countries have done. The long-established Interac has been Canada’s debit network for more than 30 years. It has an updated money transfer platform, called e-Transfer, that connects all major banks in Canada to typically process P2P payments. Interac partners, including merchants and fnancial institutions, can interoperate seamlessly with the Interac e-Transfer service to offer fast (but not real-time) money transfer capabilities to their customers and commercial clients. Under Development

Canada cont.

These moves are welcomed by businesses seeking the ability to send and receive payments faster, to satisfy customer demand and streamline business processes.

By adopting the ISO 20022 messaging standard, RTR will enable fnancial institutions, fntechs, payment disruptors and other PSPs to leverage the rich transaction data that fows alongside payments. There is also a strong desire to utilize real-time value-added services to address other applications, such as bill payments and reimbursements, and to increase transaction limits to include more business cases. Consequently, the RTR service will form the technology platform and business framework upon which overlay services can be developed. The end goal is that RTR will provide users with a host of benefts including faster, more efcient and “friction-free” payments that are transparent and data-rich.

Sources: https://www.payments.ca/modernization https://www.payments.ca/sites/default/fles/21-Dec-17/modernization_target_state_en_fnal.pdf https://www.payments.ca/sites/default/fles/vision-canadian-payments-ecosystem-reader.pdf https://www.instapay.today/insight/canadas-real-time-payment-rail-rtr/

Click here to read our exclusive interview with Payments Canada CIO and Executive Director, Modernization Jan Pilbauer and Canada’s push towards payments modernization Under Development Czech Republic

The Czech central bank, along with most leading retail banks, has agreed to introduce an immediate inter-bank payments scheme by the end of 2018. The service will be for Czech koruna only and allows benefciaries to receive funds within 20 seconds, 24/7. The ceiling for individual transactions has been set at CZK 400,000 (about $18,000). Like other countries in the region, the faster payment service will be based around the European SCT Inst rulebook to enable closer European integration, and eventually offer euro transactions across the Single Euro Payments Area (SEPA). Individual Czech banks, along with the Czech National Bank playing a coordinating and oversight role, will launch the service in the second half of 2018.

Sources: http://www.czechtradeofces.com/en/in/news/czech-banks-will-make-faster-payments-in-2018 http://www.sepaforcorporates.com/sepa-payments/11-things-need-know-sepa-instant-payments/ Under Development Hong Kong

Hong Kong’s Faster Payment System (FPS) will be launched by the Hong Kong Monetary Authority (HKMA) in September 2018, enabling payment and settlement on a real-time basis. HKMA is collaborating with Hong Kong Interbank Clearing Limited (HKICL) to prepare local banks for the launch. The infrastructure will link into 20 banks and eight electronic payment operators.

The FPS will be a multicurrency service allowing individual, retail or corporate users to make retail payments in HKD and CNY in real-time, 24/7. Transactions through FPS will support the use of mobile phone numbers or email addresses. In line with other countries in the region, Hong Kong will be implementing a common QR code standard for different payment uses, to encourage uptake and further speed up the move toward a cashless economy.

The target is to enhance consumer and company payment convenience and efciency, but the HKMA also aims to promote healthy competition between banks and encourage non-traditional payment service providers through the provision of innovative services on top of a faster payment service.

Sources: www.HKMA.gov.hk http://www.hkma.gov.hk/media/eng/doc/about-the-hkma/legislative-council-issues/20180205e2.pdf http://en.fnance.sia-partners.com/20180416/faster-payment-system-fps-key-initiative-hkma-driving-hong-kong-new-era-smart- banking https://www.instapay.today/tracker/hong-kong/ Under Development Hungary

The Magyar Nemzeti Bank, the central bank, is targeting the launch of an instant payment service in the summer of 2019. Under the proposed system, consumers will be able to initiate payments 24/7, up to HUF 10 million (about $37,000) using a payee’s mobile phone number or email address; funds will be available to the payee in a matter of seconds. The aliases or secondary account identifers will be registered centrally with initiating banks looking up the references at the time of initiation.

The new instant payment service will be based on the European’s SCT Inst scheme, but euro transfers will not be offered. The service will be mandatory for all Hungarian banks and payment settlement will be continuous using the RTGS system. The initial uses include credit transfers, direct debits, bill payment, merchant payments, P2P, P2B, internet and smartphone banking. The goal is to promote innovation in retail payments and create competition across the payments market to stimulate economic growth. Consumers will be rewarded with a cheaper service offering, a better customer experience and enhanced commerce for merchants and companies.

Sources: https://www.mnb.hu/en/payments/instantpayments https://www.mnb.hu/letoltes/operational-model-of-the-instant-payment-service-in-hungary.pdf http://www.mnb.hu/ https://www.instapay.today/tracker/hungary/ Under Development Malaysia

The Bank Negara Malaysia, the central bank, will be offering real-time retail payment services through Payments Network Malaysia. Malaysia’s real-time Retail Payments Platform (RPP) is a long-term strategic initiative to modernize Malaysia’s retail payments. The hope is that RPP will drive innovation in e-payments and strengthen fnancial institutions’ abilities to compete and remain at the forefront of customer relationships.

A pilot service will be launched in the second half of 2018 to test the core RPP infrastructure and initial payment services. The initial services will be instant credit transfer and request-to-pay for and e-commerce. P2P payments will be possible through alias services (Proxy Addressing Service) using mobile numbers or a national ID without the bank account information of the recipient. The platform will also support the fow of information with payments, including extended data to describe a payment, and will allow the attachment of documents like invoices and receipts.

The plan is to enhance the established RTGS system (RENTAS) to enable multiple messaging formats including ISO 20022, to support enhanced remittance data and foster connectivity with other countries in the region. The hope is to create a multi-currency service in line with the faster payment mechanisms in the UK and Singapore.

Sources: http://www.paynet.my/f-rpp.html http://www.paynet.my/f-rpp.html http://www.paynet.my/ http://www.paynet.my/f-rpp.html https://www.instapay.today/tracker/malaysia/ On the Radar On the Radar

Colombia New Zealand Norway Peru Saudi Arabia Pan-European Countries (SCT Inst not yet online) • Slovakia • Croatia • Cyprus • Greece • Ireland • Liechtenstein • Luxembourg • Monaco • Romania • San Marino Vietnam

The appeal of open and instant payments continues to drive an increasing number of countries to accept their inevitability. Every year, more countries launch and develop instant payment systems; every year, more countries announce their intent to implement. The drivers may vary. For some, it is to drive a cashless economy, or improve fnancial inclusion in territories with a large underbanked population. For others, faster payments are intended to stimulate innovation in a well- established fnancial sector. Whatever the reasoning, the success of instant payments on every continent has ignited a passion for payments across the globe. On the Radar Colombia

The Colombian Compensacion Electronica Nacional Interbancaria (CENIT) service offers same-day low and medium value payments through their ACH infrastructure. Funds transfers are only available during normal working hours. However, Colombia has announced plans for a separate instant payment service offering real-time payments 24/7, to be launched in 2019.

Sources: http://blog.achcolombia.com.co/ https://www.instapay.today/tracker/columbia/ On the Radar New Zealand

With a relatively small population that has a high adoption of the latest technologies, New Zealand is a strong candidate for payment innovation. However, the established electronic funds transfer systems, of which New Zealand was a very early adopter, already provide comparatively speedy payment services (cleared within one hour), and quick funds availability.

In 2016, New Zealand announced plans to make provision for a real- time payment service, mostly driven by the need to provide a more open banking environment with scope for innovation. A working group has been established to determine whether real-time payments are appropriate for New Zealand.

Sources: https://www.rbnz.govt.nz/markets-and-payments/payments-system-replacement https://www.paymentsnz.co.nz/about-us/payments-direction/speeding/ On the Radar Norway

The payment infrastructure in Norway is highly modernized and an initial instant payments service has been available since 2014 through the Straksbetalinger service. However, because pre-funding was not supported, the service incurred settlement risk for banks. As a result, uptake was lower than expected.

In 2016, in response to increasing demand for instant payment services, the central bank (Norges Bank) announced an intention to launch a completely new immediate payment system. Given the location, the Norges Bank is conscious of the payment innovations happening with their neighbors in Scandinavia. Consequently, the move to an immediate payment service, likely based on the SCT Inst rulebook but using the Norwegian krone currency rather than the euro, is becoming a high priority.

Sources: https://www.bits.no/en/bank/straksbetalinger/ On the Radar Peru

The retail payments landscape in Peru has changed signifcantly over the last few years, driven by the implementation of an electronic money scheme called Modelo Peru, and introduction of a fast retail payment- like service. Despite these enhancements, access and adoption of digital payments tends to be low in this region, and fnancial inclusion (Modelo Peru) remains a key priority. However, Peru is looking to join the legions of nations that are embracing the faster payment world, with a completely new infrastructure planned for release in 2019.

Sources: https://www.ingentaconnect.com/content/hsp/jpss/2017/00000010/00000004/art00004 https://www.aciworldwide.com/insights/expert-view/2018/february/instant-payments-are-at-the-heart-of-the-new-global-payments-landscape On the Radar Saudi Arabia

Under the guidance of the Saudi Arabian Monetary Authority, the central bank, a new instant payment mechanism is planned for late 2018. Although still in the planning phase, the new scheme will adapt and extend the existing RTGS service (SARIE) to accept lower-value retail payments in near real-time. The goal is to reduce cash usage and promote efciency and innovation in the fnancial sector. The new service, named Future Ready ACH or FR-ACH, will be based on ISO 20022 messaging standards and will use a deferred net settlement mechanism.

Sources: http://www.sama.gov.sa/en-US/Pages/default.aspx https://www.instapay.today/tracker/saudi-arabia/ On The Radar Pan-EuropeanPan European-Payments Payments

Several European countries are also planning for the implementation of SCT Inst based on the 2016 European Payments Council (EPC) rulebook. Banks in the following countries will come online throughout 2019 and 2020, to progressively span the 34 SEPA countries:

• Slovakia • Croatia • Cyprus • Greece • Ireland • Liechtenstein • Luxembourg • Monaco • Romania • San Marino

In line with the live implementations listed earlier in this report, the services aim to provide consumers and businesses with the ability to make payments within a matter of seconds, available 24/7. Ofcially, funds up to EUR 15,000 can be transferred, but local variations are allowed to meet domestic needs.

Sources: http://www.sepaforcorporates.com/sepa-payments/11-things-need-know-sepa-instant-payments/ On the Radar Vietnam

Vietnam is conducting a widespread campaign to encourage a reduction in cash transactions while increasing electronic payments, ambitiously aiming for a 90 percent cashless economy by 2020. With 90 percent of current transactions conducted in cash and only 30 percent of citizens with a bank account, the government is challenged to achieve its goals. But the availability of real-time payments is a primary weapon.

In early 2017, the National Payment Corporation of Vietnam (NAPAS), the operator of the interbank payment switch system, announced a real- time e-commerce payments service for merchants for online and mobile channels. The aim is to drive growth in e- and m-commerce across the country.

The current payment infrastructure in Vietnam is highly diversifed, with multiple proprietary solutions operated by different banks across the country. Some non-bank organizations appear to be working with the government to implement electronic payments without the need to change the existing payments infrastructure. With a unifed service enjoying strong adoption rates, the hope is to drive innovation and bring more of the relatively underbanked population into the fnancial mainstream.

Sources: http://www.vietnam-briefng.com/news/vietnams-payment-preferences-4-trends-watch.html/ http://english.vietnamnet.vn/fms/business/199792/a-cashless-economy-on-the-horizon.html FLAVORS OF FAST

We hope you’ve enjoyed reading our 2018 report on the state of global payments.

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