The changing payments landscape

Transcription

1 The changing payments landscape The impact of PSD2, instant payments & open banking Evelien Witlox, Global Head of Payments & Cards, ING 19 February 2018 Commercial Banking

2 Technology and Regulation will significantly change the banking landscape in the coming years Technolog y Regulation PAYER Channel Bank account Bank account Channel PAYEE Payment process CLEARIN G Customer expectations 2

3 Payments Services Directive 2 (PSD2) access to account is opening up bank accounts for third parties Before PSD2 access to account After PSD2 Customers Customers Bank domain Online and mobile Online and mobile Third parties Bank accounts Bank accounts 3

4 discussiions EURO-zone Planned LIVE Non EURO-zone Planned LIVE Instant Payments is gaining momentum across Europe 4 UK Poland Denmark Sweden Switzerland Hungary Romania Czech Italy Spain Belgium Netherlands Most other Euro countries Local only solutions Voluntary rulebook for SEPA Instant Credit Transfer (SCT-INT) available; supported by 585 banks Most clearing and Settlement providers planning to be ready by End 2017 ECB s TARGET Instant Payments Settlement (TIPS) to go live in Nov 18 Countries moving at different speeds resulting in an initially fragmented landscape, but ultimately to one European Instant Payments solution?

5 PSD2 and Instant Payments could temporarily lead to the reestablishment of national payment schemes and (eid) solutions France NL Sweden Denmark Italy UK Some examples where we see new national brands arise or established brands are enforced without being interoperable on an European level Spain Germany Belgium Bizum 5

6 Internet & tech giants have moved into payments and other (beyond) banking services Already offer payments Consumer payments E-commerce & Retail Control the user interface Hardware devices Communication & messaging Offer value added services Artificial intelligence Digital media & entertainment 6

7 Consequence: The payments landscape is delayering and integrating Before and beyond Banks the only payments services provider New services on top of core payments New payment experience, competition in each layer Banks Service layer Service layer Mobile Digital fulfillment layer ACH Cards Three party card schem es Internet Payment instrument layer D D ACH CT Car d Infrastructure layer Three party card schem es Regulation AC H ACH upgrade Payment instrument layer Infrastructure layer ACH Instant ACH Card Banks core systems Banks / Payment institutions core systems Banks / Payment institutions core systems 7

8 The responsibility and accountability of players getting blurred Buyer Seller TPPs & intermediate schemes Card schemes Buyer s bank SCT Instant SCT SDD Seller s bank 8

9 Separation of responsibility and accountability has to be done right to avoid incidents and efficiency issues Both in rail and energy, separation of infrastructure and service provider has resulted in Lack of long term investments focus on own business only Slower resolution of problems communication issues due to an additional interface ( ) Britain s network is 40% less efficient than those in other European countries ( ) Communication and planning are poor Train Operating Companies have no incentive to buy rolling stock that minimises damage to rails And when work overruns and trains are delayed, firms sue each other rather than helping passengers the Economist, December 8, 2016 Dutch railways saw a ~40% increase in irregularities after separating rail network and train operations ( ) liberalisation of the market resulted in the separation of power generation and transmission and distribution (T&D) business. ( ) an additional interface which can adversely impact communication and coordination activities between operators on both sides ( ) (..) missing incentives to invest in reliable, and therefore well maintained, infrastructures. Allianz study on Power Black out risks, November 2011 Source: The economist, Allianz, prorail, Pressenza, the daily mail 9

10 Ultimately, two separate roles will emerge in the payments landscape: the service provider and the commodity supplier Service layer Digital fulfillment layer Payment instrument layer The train service provider product aggregator/market place Core value: User experience Business model: focus on value (based pricing) The rails commodity supplier product as a service Infrastructure layer ACH Instant ACH Card Banks / Payment institutions core systems Core value: reliability, predictability Business model: economies of scale, focus on efficiency 10

11 PSD2 will be a mayor driver towards open banking 3 rd parties on ING platforms ING on platforms of 3 rd parties Customers new platforms across ecosystems 11