インスタント決済の未来は？

This week saw an announcement that many of us expected and had been looking out for – news that the Bank for International Settlements is to move toward live implementation of Project Nexus. And it rather created a "compare and contrast" moment on two very different outlooks on the near-term fuure of instant payments.

Nexus will see links between the real-time payment systems in India, Malaysia, the Philippines, Singapore and Thailand. In effect, any one in any of those countries will be able to send a real-time payment to any one in those countries.

Nexus is designed to standardise the way domestic instant payment systems connect to each other. Rather than every country creating custom connections for every new country to which it connects (so pairs of connections), participants only need to make one connection, to Nexus. This single connection allows the system to then reach all other countries in the network. This is more than just technical interoperability though as it also sets out the necessary rules around business processes by creating a scheme. Indeed, the next stage will be central banks and the system operators working towards establishing a new entity, the Nexus Scheme Organisation (NSO), which will be wholly owned by participating banks and responsible for managing the Nexus scheme. This is no small feat – indeed, the technical interoperability was almost certainly the easy part to the process.

Compare and contrast this to the US.

The US has has two instant payment systems, but which are not interoperable with each other. At Nacha Smarter Payments in Miami, there was a panel that included TCH, Nacha and the Fed Payments system. Mark Gould runs payment systems for the Fed and he was asked explicitly about interoperability between FedNow and RTP from TCH.

His answer was: “FedNow actually, in a routing sense, is, day one, interoperable with RTP. We have some of the biggest banks in the country on both platforms. They today route payments to one system or the other.”

There was an audible gasp from the audience (measured in the thousands), as well as a fair bit of laughter. Including from his fellow panellists. Nacha CEO Jane Larimer tried to give him a second chance, to clarify his answer, but he didn’t take it: “really, step one is we’ve got to build the network”.

Everyone understands that the Fed and TCH are arch enemies. Yet at some point the Fed needs to think about its customers, not its competitors. The way to build the network is to increase the reach, yet the Fed is forcing banks to choose between the networks, which reduces the reach.

Within the next 3 years, it is feasible that Nexus and others will connect most of the major instant payment systems globally. Nexus has already run a plot to connect to TIPS, the system that all European banks have to connect to.

The question then becomes whether the US will suffer as a result as it continues to lag.