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Growing instant payment transactions


ISO 20022 is the standard of choice for central systems and the growing instant payment initiatives. Many nations have been joining the real-time payments scene as they catch on to the benefits these systems offer. Today, 56 countries have their own instant payments systems up and running — a big increase from 14 in 2014. The landscape has accelerated for the ISO 20022 real-time payments standard in recent years with a push coming from the major central banks to ensure more reliance on a resilient noncorporate global payment's infrastructure.

Even before the pandemic, shifting consumer preferences became apparent in the digital space, with more consumers adopting online banking, downloading payments apps and changing how they interact with financial institutions.

Instant payment services can confer a multitude of benefits to consumers and businesses alike. Users can often access mobile apps that allow them to send money to recipients identified by their mobile phone numbers rather than their bank account details. Offerings like these can satisfy consumers who want fast, easy ways to shop online as well as those who use their mobile phones to pay friends or brick-and-mortar retailers.  

The advantages of instant payment transactions extend beyond just use cases for consumers. Businesses also can streamline business-to-business (B2B) transactions by pairing real-time payments with digital invoicing options and request-to-pay features. These options could help companies ensure that their payments are attached to relevant data, leading to swifter reconciliation. Accelerated transaction speeds can also help firms better manage liquidity.

Expansion from the more traditional payment message structures mandated by ISO 20022 demands a redefinition of all infrastructure that will handle the messaging data.

Given these challenges, UL’s extensive expertise and customer interaction has allowed us to identify five essential characteristics of a successful migration:

  • Clearly defined long-term strategy
  • Comprehensive impact analysis
  • Robust and systematic project management
  • Effective internal communications
  • Technology and testing solution

Central banks appear to be heeding the call for systems that can help consumers and businesses make swift, digital transactions — domestically and across borders — as more and more commerce and financial activities are conducted digitally.

Recently the Council of the European Union backed the formation of an integrated and instant system for retail payments, interoperable across all the European Union’s member states.

The G-20 has made enhancing cross-border payments a priority during the 2020 Saudi Arabian Presidency. Faster, cheaper, more transparent and more inclusive cross-border payment services could deliver benefits for citizens and economies worldwide, supporting economic growth and international trade.  

UL is a trusted advisor of the banking industry, having provided compliance and advisory services for decades. We have thoroughly researched the coming transitions of the banking industry, and the larger implications to society, and we are ready to help our customers not only prepare for change but help them lead it. Our industry experts provide industry best practices, insights into trends, and security guidance regarding authentication and onboarding, as well as help customers design their own processes, procedures and application programming interfaces (APIs). This strategic perspective sets us apart from others in the industry.

We are seeing a redistribution of risk, a change to the business model of banking and a shift in the power of customers. Lead this change by contacting us today to talk about how you can rise to the challenges of the future.