When a person receives a check and has to wait for two-four days for its clearance, that’s not a good scenario. Many say that they have gotten used to it, but the younger generation is living a fast-paced life; millennials are challenging the status quo. There is a rising need for immediacy in payments whether it is banks, businesses, or even peer-to-peer. Solutions are available in some parts of the world for immediate transfer of funds. We have been tracking real-time payment systems launched across the world on an ongoing basis and have had discussions with people who built them. I thought of sharing it in the form of a timeline infographic to understand the trends.
People and businesses worldwide want payment systems that can achieve the desired speed of transactions, minimize the cost of transactions, reduce risks of fraud and bring satisfaction of service across different channels. That’s where real-time payments come into the picture. It has already been implemented in some countries and the US is not on the list.
Below is an infographic showing a timeline of countries adopting real-time payments:
1973: Zengin (operates 08:30-16:40)
Japan was the first country in the world to implement real-time payments.
Switzerland was the first country in the Europe to implement real-time payments.
1992: TIC-RTGS (operates 08:30-17:30)
Turkey was the second country in Europe to implement real-time payments.
Taiwan was the second the country in Asia to implement real-time payments.
2000: Greiðsluveitan (operates 09:00-16:30)
Iceland was the third country in Europe to implement real-time payments.
South Korea was the third country in Asia to implement real-time payments.
2002: SITRAF (operates 07:30-17:00)
Brazil was the first country in South America and among the BRIC nations to implement real-time payments.
Mexico was the first country from North America to implement real-time payments.
South Africa was the first African country to implement real-time payments.
Chile was the second country in South America to implement real-time payments.
The UK was the fourth country in Europe to implement real-time payments.
In 2010, China introduced real-time payments.
In 2010, India introduced real-time payments.
2011: NIP (operates 08:00-17:00)
In 2011, Nigeria introduced real-time payments.
2012: Elixir Express
Poland implemented real-time payments in 2012.
Sweden implemented real-time payments in 2012.
Denmark implemented real-time payments in 2014.
In March 2014, Singapore introduced real-time payments.
Countries like Singapore and the UK have this service free of charge. Even countries like Nigeria and India are offering such real-time payment services.
In the US, we don’t have something which people enjoy in many countries across the world and that is an opportunity to build free real-time payments for any amount.
NACHA, the electronic payments association, has recently proposed a solution to provide a new, efficient and ubiquitous capability to expedite the processing of ACH transactions. With the new rule, the same-day processing of virtually any ACH payment can be enabled. But it will take some time for the rule to become fully effective. Same Day ACH would become effective over three phases during September 2016 as follows:
- In Phase 1, ACH credit transactions will be eligible for same-day processing, supporting use cases such as hourly payroll, person-to-person (P2P) payments and same-day bill pay.
- In Phase 2, Same-day ACH debits will be added, allowing for a wide variety of consumer bill payment use cases like utility, mortgage, loan and credit card payments.
- Phase 3 introduces faster ACH credit fund availability requirements for RDFIs (receiving depository financial institution); funds from Same-day ACH credit transactions will need to be available to customers by 5:00 PM RDFI local time.
Phase 1 is scheduled to begin September 23, 2016.
In Australia, the service is in its implementation phase.
(article by Amit/LTP)