An article in Euromoney tackles topics around the adoption of faster payments in the EU for corporate payments. It makes some informed observations about the environment for these transactions and key factors that are slowing the adoption of faster payments or real time payments. Some factors are unique to the UK such as the impact of Brexit, unique to the EU including compliance with PSD2. Other factors are more universal to business operations and can provide some insight into how U.S. businesses may ingest real time payments into their operations. The key point; it’s going to take a while:
The move away from batch processing to real time will not happen with a “Big Bang” though, cautions Domenico Scaffidi, ACI Worldwide’s principal solution consultant for immediate payments. “We need to remember that most banks have a legacy infrastructure in place that is in some cases 30 or even 40 years old, so to move to a real-time payments environment will take at least three to five years in most cases,” he says. Arn Knol, a director in the corporates team of treasury consultancy Zanders, agrees that the process will take time, noting that while there are considerable benefits to be achieved on the receivables side, the most notable limitation regarding real-time updates is that the underlying systems that holds these transactions would need to support this. “So far, we have not seen the major accounting systems moving towards real-time processing,” he continues. “As such, we expect that processes like intra-day clearing of accounts receivable transactions will remain mostly a manual process for now.
A good report on business pain-points in faster payment adoption from Bottomline Technologies is included in this article and can be found here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group