Going Paperless creating an integrated payment ecosystem

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Clarence Wells
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1 Going Paperless creating an integrated payment ecosystem Andrew Lai Head, Payment Market Infrastructures SWIFT, South Asia 15 th Malaysian ing Summit Kuala Lumpur, 20 th May 2011

2 Topics Current situation & challenges Key success factors for interoperability New initiatives and services 15th Malaysian ing Summit 20th May

3 SWIFT Today A co-operative organisation serving the financial industry COMMUNITY A provider of highly secure financial messaging services PLATFORM The financial standardisation body STANDARDS General SWIFT statistics: 9,790 live users 209 countries Multiple participant types 17.2m average daily traffic MarYTD 19.0 m peak day 31 st March % availability 15th Malaysian ing Summit 20th May 2011

General SWIFT statistics: 9,790 live users 209 countries Multiple participant types 17.

4 Setting the context SWIFT in the domestic payments ecosystem Central 15th Malaysian ing Summit 20th May

5 Setting the context SWIFT s core focus in the inter space Acquiring and Authorisation EFTPOS/ATM Mobile/Internet Clearing and Settlement Central Direct Credits Direct Debits

6 Current situation for retail PMIs Mainly netting - large volumes of retail payments with low to medium individual value Low priority payments settlement on D+1 Payments and collections for salaries, pensions, bills, retail payments Domestic or regional market players, involving mainly s but also corporates Different type of payment instruments: credit transfer, direct debit, cards, cheques Proprietary or standard formats defined at the level of the clearing community Various clearing models: bilateral, multilateral or through a centralised system (ACH ) 15th Malaysian ing Summit 20th May

also corporates Different type of payment instruments: credit transfer, direct debit, cards, cheques Proprietary or standard formats defined at the

7 Challenges for retail PMIs Market initiatives - business and technical standardisation such as SEPA, IPF and more recently ASEAN 2015 Lack of scalability and interoperability in retail payments platforms Payment systems need to diversify revenue with new valueadded services and process in-sourcing Geographical expansion - to capture volumes and achieve economies of scale Increased demand for near real-time or immediate payment 15th Malaysian ing Summit 20th May

diversify revenue with new valueadded services and process in-sourcing Geographical expansion - to capture volumes

8 Key success factors for interoperability Interoperability

9 Standards - the key to interoperability What are Standards? - Data / formats / messages - Technology - Systems - Network - Security - Market Practices 15th Malaysian ing Summit 20th May

10 The Interoperability concept MyMappings MyStandards Distributor investor Validation Mappings Store Transfer Agent Reference Data Third Party Services Custodian Regional Global CSD Corporate Set of services that can be invoked to transform, validate and enhance messages 15th Malaysian ing Summit 20th May

Custodian Regional Global CSD Corporate Set of services that can be invoked

11 Service Framework Harmonised operational rules usage of parameters within a Closed User Group Harmonised market practises Detailed usage of standards Specific business rules: settlement cut-off times maximum transactions per files etc 15th Malaysian ing Summit 20th May

of standards Specific business rules: settlement cut-off times

12 New developments and services

13 New developments More standardisation New services ISO migration plan for LVP systems New messages for SEPA SDD e-mandates management ISO20022 for card payments New standards to Modify and Verify Party and Account Identification Information 15th Malaysian ing Summit 20th May 2011 Multi-lateral netting platform for ACHs SDD e-mandates management platform Mobile payments and electronic payments forums Personal digital identity (3SKey) E-invoicing initiative 13

Identification Information 15th Malaysian ing Summit 20th May 2011 Multi-lateral netting platform for ACHs SDD

14 Thank you Andrew Lai SWIFT

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