“The news of an expanded Instant Transfer service comes at a time when Venmo is seeing increased competition from rivals, including Square’s Cash App and the bank-operated Venmo challenger, Zelle. Thanks to its built-in customer base and integrations with U.S. banking apps, Zelle reported $44 billion sent on 171 million transactions in Q2 2019, making it the largest peer-to-peer payment app in the U.S. by a wide margin. Venmo’s payment volume in Q2, meanwhile, was $24 billion . However, with more than 40 million active accounts, Venmo has more users than some of the U.S.’s bigger banks. And it’s still growing.”

“Any real-time payment can be slowed down by friction at the receiving bank if it is not online or not properly equipped to handle faster payments. This was the case for ABN Amro, one of the largest banks in the Netherlands, which needed fiber optic connections to handle instant payments up to 15,000 euros ($18,455 U.S.) in less than 10 seconds at any time of any day.”

“One challenge is simply the legacy infrastructure on which most financial services companies today are built. Companies that provide ERP systems like SAP or Oracle have built their systems in a batch processing world and need to also become real-time. “You’ve never needed real-time accounting, but now that you’re doing more in a digital world, real-time capability is table stakes,” said Christopher Ward, PNC Bank’s head of treasury management product management. “The experience for the consumer is going to drive change in the way companies embrace RTP.””

“The system has a “unique” architecture, she told a conference in Sydney. First, the structure is decentralised, rather than being based around a central hub. Payment institutions create “gateways”, which then exchange messages with other gateways. This means there is no central point of failure.”

“If you build real-time payments in the U.S., will anyone notice? The complicated machinations that make payments happen behind the scenes seem like something the average American doesn’t know or think much about. But Louise Clynes, group vice president of money movement products and digital channel management at SunTrust Banks, one of the early adopters of The Clearing House’s Real Time Payments system, which launched in November, says people do care.”

“From next month, Australians will be able to transfer money from one person to another in near real-time, using an email address or phone number, rather than the traditional BSB or account number process. Financial institutions in Australia have already begun sending payments across the New Payments Platform (NPP), testing the technology before its public launch in February.”

“However, the plucky little initiative has grabbed the headlines one again with the roll-out of the SEPA Credit Transfer Instant scheme (SCT Inst) in late November. The scheme, created by the European Payments Council (EPC), became operational at 585 payment services providers in eight European countries: Austria, Estonia, Germany, Italy, Latvia, Lithuania, the Netherlands and Spain. The scheme allows the electronic transfer of money – currently up to €15,000 – progressively across Europe in less than ten seconds, at any time and on any day of the year, including weekends and holidays. The transactions covered by the scheme must be denominated in euros.”

“Sky Betting and Gaming has partnered with Barclays to offer customers a service that will immediately pay out money to their debit cards when withdrawing winnings. The ‘Fast Withdrawals’ payment system, developed in partnership with Vocalink, is an innovation in the betting sector, where gamblers currently have to wait up to five days to pocket their winnings.”

“For Alibaba and Tencent, the payoff isn’t just the transaction fees they make from merchants, typically 0.6%. It’s also the consumer data collected, which can transform their apps into marketing platforms for an expanding array of services, from bike sharing to travel.”

“It’s one of the most important pieces of public infrastructure so far this century, but most people haven’t heard of it. It’s called the New Payments Platform or NPP and, after several years in the making, it’s finally going live soon after Australia Day. When it does, you’ll be able to make “real-time” electronic payments to other Australian bank accounts – meaning the funds arrive within minutes. You won’t even need to know the recipient’s BSB and account number, just an email address, mobile number or their “PayID”.

“A new “real-time payment” system that could help consumers avoid late payments and penalties was officially launched last month and will be rolled out by the banking industry over the next three years. Some banking customers will start to see a payment option pop up for what’s called “RTP” as they pay bills electronically from their online bank accounts. Faster bill payments are just one offshoot of this new system developed to serve a variety of banking and business payment needs.”

“Payment innovation runs at multiple speeds. Changes in how a payment is initiated happen almost every day. Payments infrastructure change is a lot slower. But it’s happening. Nudged forward by the Federal Reserve’s Faster Payment Task Force, we are seeing the launch of the first entirely new payment system in decades. Called Real Time Payments (RTP) the new system switched its first real-time payment on November 13, 2017.”

“The European Payments Council is introducing the Sepa Instant Credit Transfer (SCT Inst) scheme in response to concerns that the emergence of new domestic platforms, such as the UK’s Faster Payments, might end up creating a fragmented market in Europe, similar to what existed in regular payments in the past. Under the SCT Inst blueprint, people and corporations will be able to transfer up to EUR15,000 within 10 seconds, 24/7/365, across borders between accounts in any of 34 Sepa countries. PSPs willing to increase the amount limit and transaction speed can bilaterally or multilaterally agree to do so.”

“This system has a number of widespread use cases, including e-invoicing, bill pay, and consumer payments. The first banks to test the offering are BNY Mellon and US Bank, with Citi, JPMorgan Chase, and SunTrust expected to follow. RTP is expected to be used by the country’s largest banks by the end of next year, with ubiquity following in 2020, giving the system a big reach.”

“An organization of 25 U.S. banks this week started the first new payment clearance and settlement system for the United States in more than 40 years, offering the prospect that businesses and individuals will be able to better track their funds minute-by-minute and use fewer paper checks. The inaugural transaction came late at 4:59:40 p.m. (20:59:40 GMT) on Monday in a test when Bank of New York Mellon and U.S. Bancorp and moved a nominal $3.50 between different accounts owned by a single client at the two institutions, according to BNY Mellon.”

“Vocalink, a Mastercard company, supports The Clearing House (TCH) today in the launch of RTP®, its transformative real-time payment system in the U.S., which empowers consumers and businesses to send and receive immediate payments domestically. Financial processes that used to take days can now be concluded in seconds. Two banks – U.S. Bank and BNY Mellon – have completed the first live transactions.”

“As the banking industry moves closer to adopting a faster payments system, bank executives have begun to think through the impact it will have on clients and banks themselves. Commercial banking clients are likely to reap the biggest and most immediate benefits from the change, bank executives say, noting that real-time settlements will help businesses trim expenses. Consider the mounds of paper checks and invoices that could be eliminated — not to mention the costs associated with high-cost wire transfers.”

“Payments Network Malaysia (PayNet), the national financial market infrastructure provider, will build Malaysia’s real-time retail payments platform (RPP) using ACI Worldwide’s UP Immediate Payments solution. RPP is an initiative to modernise the country’s infrastructure to all participants in the ecosystem, including banks, institutions, businesses, consumers and the government.”

“The new payments platform or NPP is a $1 billion project to deliver real-time payments between customers of different banks, and the company to run the system says it will be rolled out to the public after Australia Day next year.”