‘The chief beneficiaries of real-time payments will be the customers’,
said Dr Michel Salmony, Equens, whereas the banks and Infrastructures
could be tying up too many valuable resources in getting the rails ready.
Taking UK as case in point, 3
rd
parties acting in the P2P space had
been the first to exploit instant with services such as mobile payments,
pay-day loans and e-commerce payments. Banks used it chiefly for
mobile P2P transfers with small use figures so far. The most disruptive
and innovative use could be in enabling corporates to displace cash and
gain access to ‘just-in-time’ payments. Other promising use cases could
be in instant loans, overdrafts and insurances, betting, all exploiting a
combination of instant and big data.
Mr Leo Lipis, Lipis Advisors, presented their mapping of real-time pay-
ments. 11 countries had real-time systems, and 8 would launch real-time
systems in 2016. Settlement methods varied, but all operated within one
currency and one jurisdiction. In SEPA, a real-time system was in the
design phase. All systems experienced growth and the drivers of growth
were the rise of mobile payments and customer expectations spilling
over to other products. He expected that real-time payments would
soon be common, just as there eventually would be a business case for
them.
Charles Damen, CEO of TransferTo, described how their hub connected
more than 400 mobile operators across the world and enabled fund
transfers between operators at a fraction of the cost of a usual cross
border payment. They targeted consumers wanting to remit small
funds cost effectively to recipients who had a
mobile phone but had no bank account.
Use options for recipients varied from simple
airtime top-up to paying bills from the mobile
account, paying at a POS or withdrawing
cash. In countries with low penetration of
bank accounts, mobile operators would offer
a variety of services using the phone number
as the account number, and disrupt cash based transfer services or
even displace cash. Clients would perceive transfers as real-time.
The hub would secure one-spot entry to any
destination, one KYC & compliance check-
point, one daily settlement for all pay-out
networks, along with FX service and ad-on
services. Financial institutions could use the
hub to expand reach, reduce transaction
costs and offer real-time payments.
The British FCA regulates TransferTo.
World-wide push for real-time payments
Mobile top-up as payment disruptor
Dr Michel Salmony, Equens
Money Balance:
KES 11.320.85
Type
1-To Pay BILL
2-To buyAirtime
3-To Send to a
friend
4-To pay at Store
5-To cash out
POS PAYMENTS
CASHOUT
P2PTRANSFER
BILLPAYMENTS
MOBILEAIRTIME
Mobile Money transfer is more convenient than cash transfer
Source:GSMA2014
1
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
WESTERNUNION
AGENT LOCATIONS
POSTOFFICES
COMMERCIALBANK
BRANCHES
ATMS
MOBILEMONEY
AGENTS
Money is spent directly from theMobile…
… or cash-out from the largest domestic agent network
500,000
501,000
524,000
1,376,000
2,260,000
Blockchain was mentioned often at the
community meeting. What is blockchain? Why
should we care? What are the expected use
cases?
Blockchain or ‘Distributed Ledger Technology’,
is the technology behind ‘math-based virtual
currencies, particularly Bitcoin’ (FATF defini-
tion). The technology attracts much interest
today:
•
It handles a decentralized ledger system (a
bit like a database) that can be coordinated
via Peer-2-Peer networks
•
Security and ownership are handled
without a central node. Ownership is
established via exchange of cryptographic
keys, acknowledged by multiple nodes in
the network
•
It promises rapid, inexpensive transfer of
assets between entities, which need not
know nor trust each other, and no interme-
diary is required
•
Crypto-currencies may be used with the
technology to exchange value, often with
an option to exchange to fiat currencies.
According to Lafferty, blockchain may enable
‘the Internet of Money’. It promises to deliver
instant, cheap, easily accessible, tamper-free
‘smart-agreements’. The technology receives
very high attention from the banking industry,
from regulators and from Fintechs – and users
have reported cases of disruptive, as well as
criminal nature, over the past months.
Disruption from new technology - blockchain
“Blockchain is not nec-
essarily disruptive in all
cases; in many industries,
the technology is a solution
searching for a problem”.
Credit Suisse, Blockchain
report, August 2016
4 Eurogiro News
