On the face of it, looking for “highlights” in the payment space in 2017 compared to what to look forward to in 2018 is a tough ask as nothing really took hold and went mainstream for individuals or businesses to get excited about and adopt.
Taking a step back though, 2017 could be looked back upon as the year of green shoots that will benefit end users in 2018 and beyond. After years of talking about improving how money moves, we actually saw some ACTION.
It was a year of soft launches, preparation and collaboration as opposed to one of wholesale change, but we have seen a glimpse of the future. SWIFT’s gpi and its Tracker is live with a handful of banks offering it to clients. We’ve seen a number of Blockchain/DLT/Crypto collaborations and proofs of concepts and SEPA Instant went live in November.
All of these have the potential to improve the speed and transparency of cross-border payments going forward, providing there’s wider adoption, and that’s where 2017 was a tough year to ask banks to invest time in these new capabilities and roll them out at launch.
The vast majority of European banks are concentrating resources on other regulatory initiatives such as PSD2, MiFID2, Open Banking, Ringfencing and GDPR before giving these new capabilities to their clients. Against this backdrop, Asian and American banks have been better adopters and further down the track when it comes to improving cross-border payments.
Meanwhile, European banks have had to concentrate on making their data lakes available to third parties, including allowing third parties to initiate payments from their customer’s accounts.
A head start for European banks
Whilst this gives non-European banks a head start, other regulators are watching Europe with increasing interest so they may have to play catch up in the future.
Despite the headway made, the talking’s not stopped, a number of central banks and regulators are looking at DLT and their own crypto or digital currencies.
SWIFT continue to engage their members on how to improve. Others such as Ripple continue to build their network and put pressure on the traditional rails. Local and regional regulators, payment infrastructures and competition authorities continue to consult and press for more open access to non-banks and fintechs to shake up payments and banking, a good example coming from the Canadian Competition Bureau in November.
SWIFT gpi becomes mainstream
For 2018, we expect to see SWIFT gpi to become more mainstream for Corporate Cross Border payments and SEPA Instant to get more traction. It will be interesting to see what decision the Monetary Authority of Singapore decide at the conclusion of its “Project Ubin” which includes looking into a digital SGD and how other central banks react.
With regards to PSD2, without the SCA RTS coming into force until Q2 2019, the benefits of PISP access will be muted in 2018 but watched with interest as banks start providing access to TPPs and how this changes the landscape.
There are some interesting moves in the mobile wallet space that could get interesting if they start linking up.
It’s probably still too soon to see Blockchain/DLT going mainstream in 2018, but we hope for a good harvest from the 2017 shoots in 2018 and beyond.
Mark Hewlett is Wholesale Banking Relationship Director at Ebury