Real-time payments become the new norm in Australia, with Europe set to follow suit

The rapid speeds of modern technology have created the expectation amongst consumers and businesses that payments need to be transferred instantaneously at the push of a button. Global infrastructure provider SWIFT made this a reality this week, with the launch of a real-time payments platform in Australia.

The New Payments Platform’s (NPP) financial architecture has been designed and constructed to transform how consumers, businesses, and governments transact with one another.

SWIFT has supported the evolution of payments systems around the world for more than 40 years. It played a key role in the design, build and delivery of the NPP and will continue to operate its infrastructure. This is the first step in SWIFT’s global instant payments strategy and illustrates a blueprint for what we can expect to arrive in Europe.

Instant payments are set to launch across Europe in 2018, alongside the launch of TARGET Instant Payment Settlement (TIPS), the euro real-time payments service commissioned by the Eurosystem. SWIFT’s new messaging service will harmonize the infrastructure throughout the continent and allow instant payments to be made in euros through both TIPS and EBA CLEARING’s RT-1 instant payments system.

Consumers, businesses and the broader economy are only beginning to see the possibilities with new services such as same-day delivery, just-in-time manufacturing, and instant payment apps. SWIFT currently connects 85 of the 149 High-Value Payments systems in the world, including CHAPS in the UK, TARGET2 in Europe and the SWIFT India Domestic Services. It also offers gateways to instant payments platforms in Hong Kong and in the US. All of this suggests the payments industry has only taken small steps towards reaching its full potential.

It is likely that real-time line-by-line settlement, open access infrastructure that empowers innovation via competition, and overlay services that provide value-added services are likely to become the norm.

This is a once in a generation opportunity to reinvent the payment process. While Europe awaits the arrival of instant payments in November 2018, it will be interesting to observe the changes in Australia that occur due to this new payment landscape.