PSD2 & Instant Payment Basics – Instant Payments over the world

Trending topics | 23.04.2019

IPSD2 BASICS and Instant Payment

Instant Payments have a huge growth potential around the world. Many countries have already implemented real-time/instant payment schemes, and it is becoming the normal way to proceed for payments.

In November 2017, the European Payment Council (EPC) has launched the first pan-European payment scheme called the SCT Inst (SEPA Credit Transfer Inst) to level-up its payment services. SCT Inst is designed for P2P, B2C and B2B payments.

According to the EPC, there are 2000+ European banks that have implemented the SCT Inst scheme, thus allowing the issuing and reception of Instant Payments.

SCT Inst will only take off on the condition that it is combined with Payment Initiation Services, which was introduced by the PSD2 (Payments Services Directive 2). Indeed, the combination of both services will create a new payment experience for end-users, providing both convenience and speed. Check our infographic to get all the basics about PSD2 & Instant Payments.

SEPA zone

Name of the Instant Payment scheme: SCT Inst

Creation date: November 2017

Average speed: 10 seconds

Service availability: 24/7/365

Max amount allowed per transaction: 15,000€ . However, some countries can change this amount and increase it.

Instant payment Europe

In this article, let’s take a trip around the globe to look at countries that have already implemented Instant Payments.

Brazil

Name of the Instant Payment scheme: SITRAF – Funds Transfer System

Creation date: 2002

Average speed: Less than 1 minute

Service availability:  7:30 – 17:30

Daily volumes / value in 2018:  1.7 million transactions  / BRL 12.8 billion ~ €2.9 billion

Max amount allowed per transactionBRL 1 million  ~ €225,000

Instant Payment Brazil

SITRAF is the first Instant Payment system on the American continent and is accompanying Brazil’s quick development by offering a facilitated way to move money.

Japan

Name of the Instant Payment scheme: Zengin System

Creation date: 1973

Average speed: Real time

Service availability: 24/7

Daily volumes / value in 2018 : 6.7 million transactions / ¥ 12.1 trillions ~ €950 billion

Max amount allowed per transaction: ¥ 100 million ~ €800,000

Instant Payment Japan

Created 45 years ago, Zengin System is a well-established and mature service in Japan. It covers a wide range of use cases, and is the de-facto way to send money from account to account.

United Kingdom

Name of the Instant Payment scheme:  Faster Payments

Creation date: 2008

Average speed: almost immediately

Service availability: 24/7/365

Daily volumes / value in 2018 : 5 million transactions /£4 billion ~ €4.6 billion

Max amount allowed per transaction: £250,000 ~ €290,000 (Limits depend on banks).

Instant Payment UK

 

The UK Faster Payments is addressing a lot of use cases already, as P2P payment is used for splitting bills, small payments to merchants and B2B payments. The UK is putting a lot of effort into Faster Payments, hoping to have the scheme surpass its traditional equivalent, as it would greatly ease money movements domestically.

South Africa

Name of the Instant Payment scheme: Real-Time Clearing (RTC

Creation date: 2006

Average speed: Within 60 seconds

Service availability: 24/7

Daily volumes / value in 2016 : 42,000 transactions / ZAR 690 million ~ €44 million

Max amount allowed per transaction:  ZAR 5 million ~ €316,000 during business hours
ZAR 250,000 ~ €15,800 outside business hours

Instant Payment Africa

 

With RTC, Instant Payments can be initiated through multiple channels, which has increased the adoption rate in South Africa. It is possible to benefit from Instant Payments when reaching out to a bank branch, calling over the phone and through online purchases.

India

Name of the Instant Payment scheme:  Immediate Payment Service (IMPS)

Creation date: 2010

Average speed: Real time

Service availability: 24/7

Daily volumes / value in 2018: 2.8 million transactions / INR 24 million ~ €300,000

Max amount allowed per transaction: INR 200,000 ~ €2,500

Instant Payment India

 

In India, the use of smartphones as a payment facilitator is a great advantage that encouraged the wide adoption of Instant Payments in the country. As with many developing countries that adopted Instant Payments before their developed counterparts, users played a large role in the launching of the scheme.

Sources:
FIS 2018 Flavors of Fast Report
European Payments Council – SCT INST Scheme  ERPB Meeting
Instant payment schemes- The future of payments?
European Payments Council – Overview SEPA Scheme Participants
SITRAF
Zengin System
Faster Payments
Payments Association of South Africa
Immediate Payment Service

Continue reading

PSD2 & Instant Payment Basics – Strong Customer Authentication (SCA)

PSD2 & Instant Payment Basics: Infographic

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