Instant transfer is still little used in France. Why ?
There are many reasons. First of all, both the issuing bank and the beneficiary bank must support the instant payment protocol. The European Commission is working in this direction. This wants to make mandatory, in June 2023, the ability to issue and receive instant transfers, for all banking establishments in the Union. This is still not the case today. Second reason: some banks still offer instant transfers at a cost of 1 euro for the payer. However, when we use, for example, a card, we do not pay to pay. Therefore, we are faced with a use barrier.
Do the banks resist?
Banking institutions earn money through card commissions. However, from the moment that the instant and free transfer for the user becomes general, it is very likely that it will end up replacing card payments. For banks, the problem is twofold. They don’t know how to make money from instant transfer. So there is a question of profitability.
Moving to the uses side, how can Open Banking facilitate the democratization of instant payments?
Open Banking gives regulated third parties the ability to interact with all European bank servers in a secure manner. This makes it possible to initiate operations, in particular transfers. Therefore, the role of Open Banking companies is to act as an interface between the bank, the merchant and the payer. The goal is to streamline all the necessary exchanges in the context of a purchase in both the BtoC and BtoB fields. Bridge, as a pioneer of Open Banking, therefore acts as a reference intermediary that allows standardizing the connection with all banks and creates the solutions that will correspond to the different use cases. Therefore, it is a key role. For example, Bridge markets a solution that allows a person to pay via instant transfer directly from the merchant’s website. Therefore, there is no interruption in the purchase process, which is essential.
How to generalize the use of instant transfers in people’s daily lives?
This is indeed the case. Especially since instant transfer makes it possible to answer many problems. For example, that of “KOcartes”, situations in which the card payment does not pass, which are mainly due to maximum limits, while the account is being replenished. Therefore, this causes the merchant to lose a sale. On the other hand, through an instant transfer, the latter receives the funds immediately, which is a key advantage in terms of cash management. On the consumer side, the experience is simple, fast and secure (integrated payment interface on the merchant’s site). 100% automated, all information is preloaded. Just take a look and proceed to checkout.
How do you see the progress of democratization?
Conventional transfers, checks and bank cards (in the case of “KOcartes”) will be replaced by instant transfers at no charge to the payer. Merchants who have to deal with these issues are in the process of implementing it. Consumers (and payers in general) are currently discovering this extremely fluid, simple and secure payment method at the same time. This facilitates rapid adoption. Instant transfer will quickly establish itself as an additional means of payment. It will also be possible to pay by instant transfer in physical stores.
However, we return to the position of the banks on the subject…
It is regulatory pressure that will drive banks to adopt instant transfers. This is what is currently happening at the level of the European Commission which, I believe, will be very strict in terms of the application of the regulation regarding instant payments. In this context, banking establishments will no longer be able to drag their feet.
This content was produced with SCRIBEO. The BFMBUSINESS editorial team was not involved in the production of this content.
Source: BFM TV
