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January 3, 2019

SEPA Instant Credit Transfer: scoring an instant hit for payments

By Douglas Blakey

Javier Santamaría has chaired the European Payments Council since June 2012, having been actively involved since its creation in 2002. To mark the first anniversary of the SEPA Instant Credit Transfer Scheme, he talks to Douglas Blakey about the challenges and progress to date

So far so good for the SEPA Instant Credit Transfer Scheme as it celebrates its first year. This is the faster payments service in Europe enabling customers to transfer up to €15,000 between accounts within 10 seconds.

What started as a journey with some 600 PSPs from eight European countries has become, only 12 months on, an instant hit. But as Javier Santamaría is keen to stress, the journey is just beginning, and he has ambitious plans for the future – and as EPI goes to print, Santamaría has been re-elected to serve as EPC chair for a further two years.

He tells EPI: “The main goal of the SCT Inst scheme was, and still is, to offer a pan- European instant payment scheme which could make daily payment situations more convenient in an increasingly digital and immediate world.

“In only one year the scheme has become a success story, but it doesn’t stop here. The EPC remains convinced that market forces will help to reach a critical mass by late 2020.”

Take-up hits 50% of PSPs

In terms of the metrics by which Santamaría is judging the success of the scheme, he highlights take-up by European Payment Service Providers (PSPs). To date, some 2,042 PSPs in 16 countries have joined the SEPA Instant Credit transfer scheme.

“We are delighted to have almost 50% of European PSPs participating in the scheme, and this successful deployment is the best measure of the scheme’s early success.

“At the beginning, the PSPs willing to adhere to the scheme from its beginning had to achieve considerable changes in just one year. This meant investing heavily in IT systems to make them real-time and available 24/7/365.

“It also meant establishing back-up arrangements for them, upgrading their operational and risk-management processes such as fraud detection, their clearing and settlement arrangements, and developing and promoting this new service to their customers. These are the challenges to be met by any PSP implementing SCT Inst.”

Notwithstanding the challenges that PSPs face, overall, the roll-out is taking place according to expectations. Also, the smooth transition to instant payments can be explained by the fact that the scheme is based on international open standards.

Santamaría explains: “The data formats rely on ISO 20022, with which PSPs and clearing and settlement mechanisms were used to working after the implementation of the first SEPA credit transfer and direct debit schemes. Moreover, the scheme has not encountered any obstacle,s even considering the size and diversity of the European region.”

The timetable at launch was ambitious. Several European countries had been planning their own solutions, and there was a risk that national schemes would have stopped at national borders, creating a fragmented European landscape. In late 2014, the European Retail Payments Board, a high-level body chaired by the European Central Bank, identified the need for a pan-European euro instant payment solution.

SEPA Instant Credit Transfer

SEPA Instant Credit Transfer

Expansion to 36 countries

Publication of the SCT Inst rulebook followed in November 2016. A key requirement was the need for the checks performed by the beneficiary’s PSP and the clearing and settlement of the transaction to take place within 10 seconds.

As expected, in the beginning the geographical scope of SCT Inst will progressively span over 34 European countries – soon to be 36. These is the 28 EU Member States, plus Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino.

Looking ahead, Santamaría adds: “I am very pleased to have been re-elected as chair of the EPC. The present times are characterised by the confluence of several key drivers for change in the payments market, such as a move to real-time payments, the growth of the use of mobile, wearable and connected devices, and the importance of data and regulations – in particular, PSD2.

“I am honoured to undertake this new challenge in such a context, and I am excited about what the next chapter holds for us.” He concludes in characteristically upbeat fashion: “I remain convinced that market forces will help us reach SCT Inst ubiquity in the euro area by 2020.”


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