* The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.
Over the past years, payment schemes have evolved and a new Instant Credit Transfer ( Inst) scheme was introduced, to facilitate daily payment situations for Europeans. Fast, secure and immediate payments act as a springboard for innovation- mobile, e-invoicing payments solutions are all enabled by them. So what have these changes meant for businesses and how can they benefit from them? We interviewed Massimo Battistella, Chairman of the European Association of Corporate Treasurers (EACT) Payments Commission to hear the voice of companies in the European payment landscape.
From a corporate perspective, what has changed in the payment schemes over the last few years and how should they further evolve?
From a corporate perspective, apart from the introduction of the Inst scheme, the major enhancements achieved are the standardisation of payment initiation and, recently, the introduction of the Extended Remittance Information ( ) option in the Credit Transfer ( ) Rulebook.
The future evolution should cover the standardisation of bank reporting, the introduction of refund functionalities and of Request-to-Pay (RTP) in the schemes and the extension of formats of payment initiation to non-Euro payments.
How can businesses benefit from Instant Payments? How do you see corporate take-up?
In many business models instant payments could replace existing payment against delivery solutions, improving process digitalisation, and combined with RTP originated by the beneficiary, could be used in the place of cash and cheques or in credit collections.
Also, in business models where digital goods are sold, instant payments could effectively and efficiently replace guarantee-based payments.
In order to enhance corporate interest towards the Inst, wider adoption by payment service providers ( ) is required together with availability of payment solutions, embracing payee and payers, where RTP delivery, payment initiation and payment reconciliation could be managed using standardised interfaces to monitor and integrate all steps within payees and payers enterprise resource planning (ERP) and treasury systems.
As a co-chair of the multi-stakeholder group on E-invoice Presentment and Payment (EIPP), what could you say about the role of Request to Pay?
RTP, a set of messages already existing in the ISO 20022 standard, with the ongoing improvements recently requested by and based on the analysis provided by the multi-stakeholder group on EIPP, will have a significant impact on the development of a pan-European EIPP eco-system.
This will allow payees and payers to exchange documents (invoices) and execute the related payments using and Inst via electronic channels in a seamless, fast, secure and trusted way.
It will enable reachability of European for EIPP services and could evolve to become a pan-European alternative to the use of the Direct Debit ( ) in business models where any single repetitive or one-off payment related to the delivery of an invoice should be approved by the payer.
The standardised ISO RTP could also be used in other business cases, not limited to e-invoicing, such as payments at Point of Sale (POS) with e-receipt delivery, instant payments for digital products delivery, payments upon goods delivery, e-commerce payments, creditor initiated recovery payments of overdue or pending amounts.
Furthermore, a solution combining RTP with Inst operating within an eco-system of , possibly with associated credit facilities for the payer, could be at the base of a pan-European payment scheme, using POS and mobile devices to deliver e-receipts and initiate Inst for payments at the counter. Such a solution could represent a valid and cheaper alternative to existing card based schemes with their complex settlement and guarantee mechanisms, that were built in a time in which immediate communication, seamless trust management and instant payments were not available.
Generally speaking, how do you see the future payment needs of companies in an increasingly digital, mobile and immediate economy?
Businesses target full digitalisation in payments, from payment origination to payment reconciliation and this requires that information essential to manage all the payment flow steps is present in the payment.
Companies have asked for years for improvements in the space for the structured remittance information in the payment message and the availability of pan-European unique entity identifiers (UEI) to ensure the secured and trusted counterparty identification that we deem essential in payments.
While the first issue has finally been addressed, with the new Extended Remittance Information option inserted in the 2018 version of the Rulebook, for the latter, unfortunately, a solution has not been identified yet and we hope that the topic will receive the appropriate attention and could be inserted in the next Euro Retail Payments Board ( ) workplan.
Since from a corporate perspective full digitalisation and real time payments imply full integration of all systems involved, there is a need to enhance integration among ’ systems and Corporate ERPs, using common and standardised basic interfaces at pan-European level and avoiding proliferation of Application Programming Interfaces ( ). The current fragmentation in payment initiation solutions that are proliferating in for Consumers payments cannot be replicated for Corporate payments, in to Business payments nor especially in account reporting.
Also in this case, while payment initiation standardisation has been achieved in schemes, pan-European harmonisation in bank reporting has not been addressed yet, and we hope that a pan-European standardised basic bank reporting solution, based on ISO 20022 standard, will be made available to businesses.
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