A new white paper from INFORM argues that banks should see the impending instant payments mandate from the EU in December 2024 not as a regulatory requirement, but as an opportunity for change and improvement.
Instant payments are a financial services phenomenon.
Already accounting for more than 40% of all payments by value in Asia[1], instant payments are projected to grow at more than 35% Compound Annual Growth Rate (CAGR) globally over the next six years, accounting for more than one in three payments by 2030.
INFORM’s white paper says securing instant payments will give banks the chance to create new products and services that better meet customer’s expectations of smooth, rapid and secure payment experiences.
As consumer demand for fast, secure payments grows, regulators have begun legislating for instant payments – including those in Europe.
According to a mandate from the European Commission, all banks in the EU must be capable of receiving them compliant with the SEPA SCT-Inst standard nine months after the December 2024 deadline, and must be capable of sending SCT-Inst payments 18 months of this deadline.
In Beyond compliance: securing the instant future, INFORM make the case that this mandated shift to instant payments readiness offers banks the opportunity to deliver next-level customer service, dramatically improve customer satisfaction and retention, and develop new services such as Authorised Push Payments, Request to Pay and more.
The catch is that part of the EU’s regulatory mandate includes the responsibility for banks to authenticate and secure them.
This is no simple task, as it includes fraud detection in less than ten seconds – as well as authentication itself.
As stated in the white paper, the current liability status for losses suffered by consumers remains unclear in some jurisdictions, making instant payments a potential risk for banks.
However, INFORM see huge opportunity in this complexity.
By drawing on external resources such as EBA Clearing’s FPAD – which provides a network view of millions of payment and beneficiary account behaviours – and implementing technologies that fulfil the EU‘s forthcoming Verification of Payee (VoP) regulation, banks can deliver a future-proof solution.
The trick is to avoid additional friction while at the same time delivering on the promise of instant payment for faster, smoother transactions.
INFORM demonstrate how the combination of external resources and a bank’s own customer data can help to rapidly identify anomalies that indicate fraud.
Essentially, moving from the previous era of rules-based approaches to fraud to a dynamic, 360-degree view of customer behaviour that helps authenticate legitimate transactions and identify fraud.
Read the new white paper from INFORM now to learn more about securing instant payments – and why instant payments are the gateway to next-level customer service.
[1] The World Bank, 2023: “Future of Fast Payments”
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