Nick Caplan, chairman of Faster Payments, sat down with us to discuss real-time payments integration and technology considerations. Watch the video to hear his perspectives.
This is Elton Kane for Finextra at Sibos and I’m here speaking to Nick Caplan, Chairman of Faster Payments.
Nick, what do you think are the biggest drivers for real-time payments right now?
NC: I think there’s one really simple driver and that is the Millennials. Everybody wants things real-time, they want things now and so it’s all about the power of now.
What must a strategic plan for real-time payments include?
NC: It needs three component parts. The first, you’ve got to have real clarity over what your customer proposition is, why you want to be real-time and what that means. The second part is clarity on your model. That’s both the technical model and your settlement model and I’d like to come back to that at some point. And the third part is you really need to make sure you understand how you’re going to make it truly 24x7 and what that means for your business and your business processes. It’s not just about the central infrastructure, you need to be 24x7 too.
Can you talk a little bit more about the model and the types of participants involved in real-time payments?
NC: Yes, so we spend a lot of time trying to build up the economic models for these people. The first is as an aggregator, you’ve got a mechanism whereby you can provide the technology capability to organizations, to the PSPs—the payment service providers—and that’s really important because these organizations give you access to the technology. It means you can completely separate it from the clearing and settlement, and you can therefore have a different settlement provider, or of course you can be the settlement provider for yourself.
And what valuable lessons would you highlight if you’re the kind of organization that’s getting involved in implementing real-time payments?
NC: I think the issue of 24x7, having to be able to service everything all of the time is really important, but underneath that you’ve got to be clear on what your economic model looks like and how you’re going to use your technology. And we spend a lot of time trying to make sure we build the financial models for people so that they understand both what that pure cost model looks like, but also at what point your volumes get there to make it worthwhile.
And what benefits do you think can be realized from implementing real-time payments?
NC: The big benefits are you can finally start to be a player in a real-time marketplace, even when you’re not one of the directly attaching organizations, one of those big originating banks. It means that everybody’s got the benefit of being able to offer a 24x7 real-time capability. And that opens up all sorts of really innovative opportunities. I’m a user of Apple Pay, and one of the things that I get is now a real-time notification every time I use my payment card. Wow, why can’t I have that on all my payments?
Given the range of opportunities that real-time payments provides, what other innovations do you think are going to be on the horizon?
NC: I think the innovations are going to start to drive down what other things you can connect into this. How do I link my payments into a much broader experience and so what is this going to look like ultimately in terms of the capabilities I can do, in terms of the invoicing, how I get re-payments when things go wrong, how do I just extend that overall experience for everybody?
So it’s not just the payments initiation itself, it becomes part of a wider experience.
NC: Absolutely not, payments is just a part of the food chain and it needs to be a part of the totality. The first thing is there’s some transaction that’s happened and the next is there’s a payment, these things need to get integrated together clearly and making it real-time enables that to happen.
Ok thanks for your time Nick, that’s great.
NC: Great pleasure.
And thank you for watching.