Lessons learned from 24/7 payments operations

Abstract

In the past seven years, a new type of the payment infrastructure (Immediate Payments) has been introduced alongside Real-Time Gross Settlement (RTGS) and Automated Clearing House (ACH) mechanisms. Historically, banks have responded to this development by creating ad hoc, single country solutions or by tactical changes to their existing payment platforms. This paper argues that a more strategic response is possible and is in fact the optimal approach for banks that operate in multiple countries. It shows that the drivers of adoptions are similar for RTGS and Immediate Payments, and it is therefore possible to use the historical diffusion patterns of RTGS to estimate the rate of adoption for this new infrastructure and that it is going to be a regular and frequent occurrence on the payment product roadmap of a global bank. The case studies will demonstrate that, although each country takes a unique approach, rooted in its history and market practices, significant commonalities have emerged. Global banks can take advantage of these commonalities to implement a generic multi-country payments solution that supports the common core, and then deal with a significantly smaller undertaking to implement country-specific variations when a particular country creates its own Immediate Payments infrastructure. Alternatively, single-country banks can defer the investment until their country expresses the intention to create such an infrastructure. Even purely domestic banks should take note that the common characteristics are well beyond the capabilities of their legacy payments platforms and that, in order to create new compelling value for their customer base, architecture modernisation will be an important component of the overall initiative.