The Instant Credit Transfer ( Inst) scheme has been operational for just a few days, yet the nearly 600 payment service providers () who now offer Inst-based services have been working hard for the last year to make these services a reality. With 86 on board, Spain is one of the most advanced of the eight European countries who already participate in the scheme. We asked Beatriz Kissler, Scheme Management Board member representing the Spanish scheme participants, to share the lessons Spain has learnt while implementing the scheme.
Q. Can you tell us more about the landscape of instant payments in Spain, now that the scheme has been implemented?
The Spanish banking community understood that the deployment of Inst was critical if banks wanted to play a relevant role in shaping the future of financial services. Banks covering over ninety-eight percent of the market share decided to set up a project that would facilitate the adoption of Inst by connecting financial entities with Clearing who used Iberpay (the local automated clearing house) as a technical service provider.
As a result, entities covering a market share of more than sixty-five percent were already prepared to both issue and receive payments by the launch on 21 November, while a further ten percent were operating as receivers. Scheme adoption by nearly one hundred percent of these banks is expected by late February 2018.
No conversations about increasing the maximum transaction amount or reducing execution time have yet been initiated, but this will probably happen in the near future once the clear benefits of using Inst have been experienced by all actors performing in the market.
Q. How have you explained the new Inst-based services that CaixaBank offers to your customers?
The initial meetings to present Inst to corporates have begun to take place. Extensive communication to CaixaBank’s customer base, in particular SMEs and merchants, is currently being planned and will reach the public soon, now that the scheme is launched.
Q. What channels can CaixaBank customers use to make instant payments?
CaixaBank’s customers can initiate instant payments through all the channels we offer: internet and mobile banking and also physically at every branch of the bank.
Q. How do you see the growth of CaixaBank’s Inst-based services and their extension? Do you think instant payments will become the new normal, replacing standard credit transfers ()?
At CaixaBank we firmly believe that instant payments are more than just ‘another kind of transfer’ and that they go far beyond being a mere substitute for current .
We are sure that they will be widely adopted by the market in the medium term for many different purposes in a way that creates a new business model for the banking sector in Europe.
Also, complete deployment of the revised Payment Services Directive will most probably boost its use, as we are quite convinced that it will be expanded for use by third party service providers () as THE WAY to initiate payments.
Moreover, we are perfectly aware that Inst provides clear benefits to customers, who will appreciate these facilities once they begin using them. So we foresee that more and more services using these features will soon be in demand.
In parallel, we are deeply analysing many potential uses, like substitution for cash and supply chain-related payments and, furthermore, minor tax payments or person-to-person () transfers. The more we think about it, the wider the scope for Inst.
Q. Finally, as one of the pioneers of Inst, what advice would you give to from other countries who are planning to adopt the scheme?
Perhaps the main one would be prioritising and planning for all the details of the deployment. On the other hand don’t restrict yourself to the short term and think that Inst is just a new way of executing payments. That would otherwise mean overlooking the main reasons to extend Inst to as many parts of the business as possible.
From our perspective, the experience of cooperating with the Spanish banking community, with clear support from our national central bank (Banco de España), has proven effective, and is probably the best course of action when adopting Inst. Being able to provide Inst from the earliest opportunity to as many banking customers as possible makes sense.
Finally, at the European level we have to bear in mind that the enhanced capabilities provided by Inst can be a good way to prepare our industry to address the competitive challenges of the future. If we do not proactively adapt to Inst, we will be obliged to do so sooner or later anyway, when it will probably be too late. Do we want that scenario?
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