instant payments

Jan 10 2021

By 2022, Most Payments will Migrate to ISO 20022, a Standard for Electronic Data Interchange between Financial Institutions, According to Payment Components

The team at Payment Components, a UK-based firm that’s empowering Open Banking with agile PSD2 and API frameworks (developing solutions for banks, corporates, and developers including BaaS while supporting Fintech payments), notes that with the introduction of new regulations and payment systems, managing a bank’s payment infrastructure is “becoming increasingly complex.”

Bank institutions have to integrate with new acquisitions, localize their proprietary technology stacks to the countries they move to, while also having to keep up with standard payment integrations. If banking platforms don’t complete these tasks, then their payments messaging “becomes siloed and causes system delays, errors, and increased costs,” according to Payment Components.

The Payment Components team asks how smaller banks and e-money institutions can “efficiently keep up with the constant stream of new releases?” The Fintech firm states that it has created a solution that lets banks manage all their payment flows “within the same system.”

The company explains:

“Each country has its own domestic payment service and each bank and group may have its own messaging system. So far, the dominant messaging standard used for the last decades has been SWIFT MT. But this international standard has reached its limits as the industry needed a messaging protocol able to carry more data and requiring fewer manual intervention.”

They added:

“The demand for instant payments is growing. In the UK, the use of Faster Payments has seen an increase with double digits quarter on quarter. And growth is similar all over the world.”

Big Four auditing firm Deloitte reveals that real-time payments have helped with increasing and providing easier access to working capital. They’ve also improved the efficiency of the financial system by enhancing financial inclusion, while lowering the overall cost of payment systems. According to Payment Components, it should be clear that the trend is “moving towards instant payments and ISO 20022 is the messaging standard that can be used for all types of financial communication.”

The payments firm further noted:

“There are a huge number of benefits to managing payments with a new protocol such as the ISO20022. Firstly, it can transfer a lot more data and therefore enable banks to build informational structures and make data-driven decisions. Secondly, it offers long term benefits for the economy as it allows for more flexibility and innovation in the financial sector.”

Payment Components explains that it’s a protocol that serves as an “enabler” since it provides a more organized way to take care of payments messaging. Two of the primary features are that messaging components are reused instead of having to be created “from scratch” for each message, and the format (syntax) is separate or distinct from the semantics. This reportedly makes it a lot easier to understand messages wherever they might be coming from, the Payment Components team noted.

They also mentioned:

“ISO20022 is there to help improve communication, understand messages from other institutions, and enhance cooperation. The vast majority of the payments around the world will have migrated to the ISO20022 by 2022.”

The Fintech firm continued:

“SEPA, the EURO area payment integration initiative, also utilizes ISO20022 to offer low-value transfers at minimal cost and real-time payments throughout the SCT Inst scheme. That’s why the best strategy is to implement a system that can manage all types of payment protocols.”

They further noted that it’s one that manages to stay up to date with new releases, and can also integrate with ISO20022, SWIFT MT, SEPA and proprietary payment protocols. With an Internet-based end-to-end solution, banks and financial institutions may add digital payments to their core system in “a simple plug-in application.” They also mentioned that the upfront time and investment required to install it is “minimal,” and the system is “specifically built to integrate seamlessly with different banking core systems.”

Payment Components claims that being able to stay up-to-date with the latest releases and payment infrastructures does not have to be costly and time-consuming. We also don’t have to work with fragmented legacy systems, because with payment systems such as aplonHub, your bank may use the same technology that Fintech firms use and take advantage of the latest payment standards “without creating more siloes,” according to Payment Components.

Source

Aug 29 2020

London Fintech SatoshiPay Reveals How they’ve Leveraged Blockchain or DLT to Process Real-Time Micropayments for Online Publishers

London-based SatoshiPay, a Fintech firm that aims to provide fast and affordable payment solutions, has revealed that it has reached a key milestone in establishing its blockchain-enabled clearing platform as a “new standard” for cross-border transactions.

The SatoshiPay team notes that, as of August 2020, they’ve handled more than €1 million in digital payments for their publishing clients.

SatoshiPay states:

“During 2019 and 2020, both of our strategic partners in the publishing industry supported the acceptance of SatoshiPay as a payment method by running numerous campaigns. These campaigns made parts of the publishers’ subscription content available via micropayments or instant premium passes.”

They added:

“Axel Springer (a publisher) offers sponsored access to their real-time incident mapping service Tatorte, part of German newspaper Bild. SatoshiPay’s platform takes care of instant payment processing between users and Axel Springer, with spikes of several thousand payments per hour during peak periods.”

Sergei Evdokimov, Senior Digital Solutions Architect at Axel Springer, claims that they’ve seen steady demand from their users for instant access to their Tatorte web service through SatoshiPay’s payment platform.

Evdokimov added that for them, as a publisher, experiencing the ability of blockchain or distributed ledger tech (DLT) to help process real-time payments (under pre-programmed conditions) gives them important insights into this new emerging standard for international transactions.

Börsenmedien’s German retail investor magazine Der Aktionär releases premium content to subscribers. Visitors to Der Aktionär’s online site that like to read premium articles instead of signing up for a subscription with recurring payments, are now able to do so through SatoshiPay. Der Aktionär’s paywall page displays the SatoshiPay button that lets people make a payment and then begin reading with simply one click. The premium article is displayed to the reader “within seconds and without page reload.”

The Satoshi Pay team notes:

“Integrating SatoshiPay’s instant payments creates a win-win for publisher and user: Publishers receive an additional tool for monetizing web traffic, potentially expanding their subscriber base and users can conveniently try out the premium experience by making micropayments.”

The Stellar Development Foundation (SDF) has reportedly been supporting SatoshiPay’s content partners via free credits for platform users, which are offered in Stellar Lumens (XLM), the native digital currency of the Stellar blockchain network.

The SatoshiPay team states in their blog post:

“Not only does this allow an easy start for users, but it generates initial micropayment revenues for publishers and demonstrates one of the major advantages of the decentralized Stellar network: near-instant and extremely low-cost payments — settled within 5 seconds for a fraction of a cent in transaction costs.”

Purchase orders, via SatoshiPay, for publishing content reportedly come from nearly all countries within the EU and also from other jurisdictions. The payments processing platform is available to users “independent” of their country of origin.

The SatoshiPay team claims:

“Payments arrived at the publishers’ accounts within seconds, with fees and affiliate share already deducted. VAT is redirected to separate blockchain accounts at the same time. As blockchain natives, we take these sort of real-time split payments almost for granted, but for publishers this removes a large accounting and manual payment processing burden.”

(Note: for more details about SatoshiPay’s future plans and other info, check here.)

Source

Aug 07 2020

US Federal Reserve Is Focused on Launching FedNow for Real-Time Digital Payments and Settlements

The US Federal Reserve, which is the central banking system of the country, has reportedly been working on a new real-time payment and settlement system, called FedNow.

Governor Lael Brainard claims that the Fed plans to have FedNow fully operational as soon as possible. Brainard notes that the COVID-19 outbreak and resulting challenges have proven or shown that it’s vital that US residents have immediate and convenient access to funds.

She remarked:

“The COVID-19 pandemic is taking a tremendous toll on communities across America, especially households and small businesses with the least liquid resources to weather the storm. Emergency relief payments authorized in the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, provided a vital lifeline for many households. The rapid expenditure of the COVID emergency relief payments highlights the critical urgency of immediate access to funds for the many households and businesses managing cash-flow constraints.”

It’s been around a year since FedNow was proposed, which will basically serve as a new and improved payment system. The US has reportedly not made major updates to its payments networks since the past four decades.

Brainard reveals that the Fed has made “substantial strides” towards developing the FedNow system. There are more than 100 people actively working on the initiative.

Although the official launch date might not be until a few years from now, the Fed is taking a phased or step-by-step approach to developing the network. This will ensure that important features are properly developed, and make it to the market “expeditiously” with extra capabilities being incorporated after the foundation has been established.

Brainard stated that there would be updates made to the US’ core interbank clearing and settlement capabilities. She added that FedNow would incorporate other important features such as tools to detect potentially fraudulent transactions or activity.

The FedNow service will also adhere to the ISO 20022 message standard, in order to ensure interoperability with the Clearing House’s RTP network, which is a private sector alternative to the payments network.

There will also be features that allow people to use their email addresses and phone numbers to conduct digital payments. These add-ons will be made at a later time, due to certain legal and security issues.

Brainard said that the Coronavirus crisis shows how important it is to be able to make instant payments. The Federal Reserve led processing of payments to US households was quite slow, because it relied mostly on using traditional methods such as issuing cheques, direct debits, and prepaid cards.

Brainard noted:

“By contrast, the ability to disburse funds via instant payments could have helped reduce the strain for those who needed the funds quickly in order to meet financial obligations.”

She emphasized the importance of the role that the Fed can play in supporting innovations in the payments sector, which may include the responsible adoption of appropriate Fintech solutions.

However, the governor expressed doubts or reservations about the controversial, Facebook-led Libra project. She said that Libra gives rise to “fundamental questions about legal and regulatory safeguards, financial stability, and the appropriate role of private money.”

Brainard added:

“The promise of the FedNow Service is that it will provide a modern payment infrastructure for the future, bringing the benefits of instant payments to communities across America and improving the way households, businesses, and government agencies make payments for many years to come.”

Source