Sunday, 30 July 2017

POST Push! Push! Push!

Many years ago, I worked on a couple of projects looking at the future of payments. My conclusion, and that of my colleagues, was that the payment systems of the future would very likely be push rather than pull. The reasoning is quite straightforward: push payments are simpler and cheaper (pull payments, such as Direct Debit in the UK, are a hack to get around a lack of connectivity) and if there is a need for more complex instrument or services then they should be a layer on top of a cheap, fast and transparent push infrastructure. Earlier this year, the UK’s new payments infrastructure was set out

The UK's Payment Strategy Forum has delivered a blueprint for the future of the nation's payment system, setting out design and implementation approaches for the construction of a new 'National Payments Architecture'.

From PSF lays down blueprint for new UK payments architecture

I was naturally very excited to see what this new architecture would be, and one of the key phrases that I was looking out for was “push payments”. This is because many years ago I worked on a couple of projects looking at the future of payments that featured these exclusively. My conclusion, and that of my colleagues, was that the mass-market payment systems of the future would very likely be push-only rather than push and pull. The reasoning is quite straightforward: push payments are simpler and cheaper (pull payments, such as Direct Debit in the UK, are a hack to get around a lack of connectivity) and if there is a need for more complex instrument or services then they should be a layer on top of a cheap, fast and transparent push infrastructure. As I wrote back in 2014…

pull payments are a relic from the bygone past when consumers did not have devices and there was no network to connect them to

From Push payments are a win-win (and a lose) | Consult Hyperion

Therefore, I have made the transition to push (or “the push for push”) an input to the process of creating payment organisation strategies for some time. Hence I was very interested to read in the blueprint referred to above, the Payment Strategy Forum’s “Blueprint for the Future of UK Payments” (July 2017), that…

In summary, we concluded that a push only model offers many advantages but recognise that for some in the industry, changes will be required to enable them to deliver existing pull based payments products, such as Direct Debits.

This is as it should be. The era of III (instant, invisible and irrevocable) payments is here and not only in the UK. Countries around the world are firing up their faster payment networks and in Europe the SEPA Instant Payments scheme goes live in November. 

The EPC’s SCT Inst scheme will enable interoperable euro credit transfers in SEPA for transactions of up to €15,000 initially to be available on the payee’s account within ten seconds.

From SEPA INSTANT CREDIT TRANSFERS ARRIVE - Payments Cards & Mobile

There is a big picture here: the steady transition to ubiquitous, low-cost, account-to-account credit transfers as a platform for other payment services (if they are required). As this infrastructure becomes more sophisticated (because of, for example, the shift to ISO 20022 XML and the exploitation of enhanced data transport)

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