The Key to Unlocking the Full Potential of the Internal Payments Market

Transcription

1 International Payment Summit 2010 Royal Lancaster Hotel, London Electronic and Mobile SEPA: The Key to Unlocking the Full Potential of the Internal Payments Market 9 March 2010 Harry Leinonen The views expressed are those of the author and do not necessarily reflect the views of the Bank of Finland. SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 1

2 Current SEPA credit transfer developments Source: ECB SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 2

3 Future SEPA credit transfer developments 100% 90% Swift Rapid Moderate Slow 80% 70% 60% 50% 40% 30% 20% 10% 0% SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 3

4 Speed factors Increasing Decreasing Clear info and dead-lines Consistent and supporting info Firm supported standards Common to all banks Readiness for change Little info and messy timing Conflicting info, moving targets Conflicting standards National, proprietary versions Lack of prerequisites Software availability&installation Missing software availability Positive customer incentives Negative customer incentives Concrete economic benefits Cost of change without benefits Need to capture customers interest versus other priorities SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 4

5 Clear deadlines Common final start-date for e-sepa customer transactions Common proposed final end-date for legacy transaction formats Good arguments for common end-date based on customer and economy-level benefits Political l end-date d backing is only possible based on customer benefits and unanimous industry support SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 5

6 Need for firm-supported esepa standards Payer Payee Sending Payer s Payee s Sending - credit transfers bank bank - e-invoices - sending direct - direct debits debit mandates - card payments - accepting e-invoices i Receiving Receiving - payment notifications - e-invoices - credit transfers - direct debits - direct debits - card payment info - card payments - statements of accounts - direct debit mandates - statements of accounts Common e-standards are basis for e-efficiency. Common ISO20022 standards with sufficient data. Common implementation via JAVA-libraries (reusable code). SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 6

7 Electronic payments are the main part and the growing part of EU non-cash payments Compound average = 89% SEPA is a de facto esepa undertaking SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 7

8 Non-cash electronic payments in EU-15 = 70 billions Non-cash paper payments in EU-15 = 9 billions Market share of e-payments in EU-15 SEPA efficiency gains achievable mainly in e-payments SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 8

9 Software houses need to implement the new standards for customers Customers buy, lease, outsource, use as a remote service their payment/cash management applications Almost completely dependent on external IT vendors Customers pay for all application updates and changes IT vendors interest will grow with common standards and growing markets Common testing facilities will support changeover The concrete objective: - same POS-terminal works throughout SEPA - same cash management software connects everywhere - same direct debit application functions in all countries - same e-invoicing solution for all EU invoices - same e/m-payment solution for e/m-commerce SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 9

10 Positive customer e-incentives and e-benefits Common e-standards t d d connecting to all banks in SEPA Receivers e-reference (ISO RF) available throughout SEPA e-mandates d t to automate t direct debits in Europe Common e-invoice service including cross-border usage Common card and card transaction standards including expanded transaction e-info in-line with e-invoices Common certified EFTPOS terminals and software e-payment solution for e-commerce e-discounts or lower e-tariffs on e-sepa services (compared to old legacy services) Positive customer benefits will promote rapid voluntary move to SEPA, forced deadlines without benefits will delay the move to near or after the deadline. SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 10

11 Mobile phone and m-payment - payment instrument of the future? Person-to-person In shops Ticketing Digitalised card info over-the-air (OTA) into phone Versitile m/e-id and encryption and back-up ((())) Enhanced NFC and RFID input Mobile = minipc for payments Up-to-date balance info Complete transaction records Autoreconciling Increased convenience, speed and security at lower costs SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 11

12 All kinds of accounts and issuers can use the same platform and technology Banking services (debit card, credit card, etc) Money remittance services Payment institution services TELCO billing services Central bank services (m-cash?) Parallel usage requires a trusted service manager (TSM) to administrate the security and identification environment Harry Leinonen SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 12

13 The m-payment infrastructure will require a complete set of common standards m-identificationm standards Payment transaction standards including remittance info Ticketing transaction standards Near-field-communication (NFC) and remote (OTA) communication standards SIM and/or security card standards etc Developing and implementing m-standards (msepa) will require even wider cooperation than for esepa SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 13

14 Necessary m-payment cooperation parties TELCOs Handset suppliers Merchants Consumers - Banks, card companies etc Inter- bank EFTPOS suppliers Development of new integrated services require a longer chain of cooperation than before SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 14

15 M-payments can - make card payments more efficient - improve e-commerce/web-payments - replace some cash payments but in general the total payment volumes will remain as before. Note! m-payments are improved e-payments SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 15

16 Conclusions esepa as the only viable SEPA - more attention needed Focus on completely common implemented standards for both e and m -versions ICT vendors are in key position for implementations Clear cost and fee benefits for customers are needed e-reference, e-invoices, e-mandates, e/m-payments and e-promoting tariffs Only a common bank-initiated push based on customer benefits can speed up SEPA implementation and unlock the full potential SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 16

17 Payments are a cost industry and not an amusement business. New options must outperform legacy services in costs and content andesepa is the road to future. SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 17

18 Thank you for your attention. Q&A SUOMEN PANKKI FINLANDS BANK BANK OF FINLAND 18