It is undeniable that instant payments are here to stay. Banks must be prepared to operate in compliance. These requirements can range from the amount of time that is allowed to complete a transaction, to the scalability of the program, to the security around the transaction itself. Each of these networks also carry strict requirements. The national networks are all relatively young, if not brand new, and it will take time – and iterations – for each network to operate flawlessly. In addition to the infrastructure changes that instant payments require, there are other factors out of the banks’ control. Banks will need to either transform their legacy system or adopt a message layer that can convert message types to those required by the Instant Payment network. ISO 20022 has become the standard message type for instant payments, but the majority of banks use ISO 8583 messages. Do we adapt and join the race for instant payments or stay out of the race and try to protect our legacy payments business?Īccording to Accenture (Accenture, 2019), banks must transform a) to protect legacy payments revenue that is being displaced by new payment types, and b) to capitalize on the over US$500 billion in incremental revenue growth that is being created by new payment types over the next five years.Īgainst that backdrop, joining these networks seems to be the right financial decision for most banks, yet we know it isn’t that simple. In those and other countries that are building networks, banks are now left with a decision. This is certainly a trend that will continue into 2020 and beyond. The momentum continued in 2019 when The Netherlands and Russia each launched national instant payment networks. Some of the earliest adopters include TIPS in Europe and NPP in Australia. These national networks seek to create a streamlined and regulated channel by which instant payments can thrive in a controlled and trackable environment. The adoption of instant payments, nearly doubling over each of the past five years, has motivated countries to implement their own Instant Payment networks.

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