Real Time Payments or Faster Payments are set to drive the most significant transformation in the global payment landscape, as customers expect convenience and security as well as rapid, instantaneous processing of all their transactions. Real Time Payments are the new normal. As of late 2017, Central banks across geographies have joined the global real-time payments movement to align with market demands. Businesses and consumers across different geographies have expressed a demand for faster digital payments and could benefit from the prompt visibility of payment status and faster availability of good funds. Uncertainty in payment timing and delay of funds receipt can be costly to consumers and businesses as they manage their account balances from day to day. So, the new focus of the Central Banks / Networks around the globe is to implement an instant/faster payment platform with a mobile first strategy.
Many central banks had implemented instant payment systems in the past. With a changing payment landscape and market demand they face the following challenges:
- Adoption for the retail consumer is very low with complicated payment mechanism
- Need to remember and transmit the entire account number, compromising security
- Not built for modern smartphone and app based mobile payments generation
- No provision for innovation and difficult to integrate
- Does not support data rich ISO 20022 protocols, hindering interoperability
To mitigate these challenges, a Digital Overlay Service Layer on top of the existing instant payment system enables higher adoption of the instant payment with security and convenience. The overlay layer fosters innovation and building of new use cases for P2P, P2M and B2B payments.