SCT Inst – A case of pragmatism over political ideals?
Blog published on LinkedIn: David Chance SVP, Product Strategy
Demand for instant payment capability across Europe is being driven by market demand rather than political demands to standardize the payment experience in line with the Euro currency.
As such, instant payment systems are being developed that reflect specific market demands and needs of member states rather than a compromised ‘fits all’ solution that can be rolled out across the whole of the Eurozone.
Domestic and regional market infrastructures are focusing on providing services that meet these market demands, whether ensuring that merchants receive good value for funds over weekends in the Netherlands, or that people can easily transfer funds between themselves via their mobile phones in Spain.
The SCT Inst rulebook, provides a regulatory framework at the level of ‘lowest common denominator’, allowing market infrastructures to deploy very different services, and not just around speed and transaction amounts, but also supporting a wide range of additional messages that support the whole interaction between users.
The political goal of ubiquity will only be met when these market infrastructures can interoperate with the deployment of ECB TIPS solution.
Banks therefore need a payment solution that allows them to support multiple instant and non-instant market infrastructures, with the routing based on the business needs of the service being provided. The solution also needs to be agile to allow the development and release of new products as the bank’s market rapidly evolves both domestically and across European borders.