BearingPoint helps you reshape your business model. We support you in introducing payment innovations into your payment systems and processes to become more efficient, lower costs, and increase STP rates (straight-through processing).

In the sharing economy (pay-as-you-go) and the internet of things world, a growing number of business models are based on real-time transactions. Additionally, transactions are becoming smaller and more frequent.

Supporting the evolution of the European economy, the European institutions are following overarching trends:

  • Standardization of technology to decrease costs and support integration and competition
  • Independence of critical European infrastructure to ensure financial stability
  • New real-time technologies to enable a prosperous development of the European economy
  • Protection of the interests of European citizens by guaranteeing data security and fair competition

In this changing world, European banks have to evolve their service and product offering to remain competitive, and that is reflected by numerous initiatives and projects which accelerate the developments in the European payment landscape:

  • TARGET 2 consolidation (T2) and SWIFT ISO migration
  • Request to pay (RTP)
  • European Payments Initiative (EPI)
  • Central Bank Digital Currency (CBDC)
  • Open banking/ API banking

We support you in rethinking value-adding services, increasing efficiency, and ensuring compliance by introducing payment innovations to your organization.

Initiative Purpose Challenges

TARGET 2 consolidation (T2) and SWIFT ISO migration
  • The TARGET 2 migration to ISO 20022, using MX messages, is planned for November 2022.
  • Therefore, SWIFT is migrating to MX formats at the same time.
  • The goal is to meet the market demand with a new real-time gross settlement (RTGS) called T2 and thereby optimizing liquidity management across all TARGET services, including Target2-Securities (T2S) and Target instant payment services (TIPS).
  • Be ready on day one, as migration is planned as a big bang.
  • Test your system landscape to ensure zero-mistake adoption.
  • Automation of straight through processing (STP) is the key.

Request to pay (RTP)
  • The RTP service by EBA Clearing will go-live in alignment with the launch of the EPC SEPA Request to Pay Scheme.
  • RTP aims at enabling the presentment of the payment date to the payee enabling end-to-end payment transactions using the SEPA Instant Credit Transfer (SCT Inst).
  • Capture process efficiency gains.
  • Create demand and acceptance.
  • Integrate solutions into existing ecosystems.

European payments Initiative (EPI)
  • European banks announced the launch of the European Payments Initiative.
  • EPI aims at creating a unified payment solution for consumers and merchants across Europe.
  • Ambition is to leverage the SEPA Instant Credit Transfer (SCT Inst) to become new pan-European standard of payments in all types of payment transactions.
  • Offer a cost-efficient solution regarding existing payment schemes.
  • Overcome reach and long-term problem.
  • Migration and integration into existing customers' habits.

Central Bank Digital Currency (CBDC)
  • A central bank issued digital Euro will be historic innovation in money, challenging and altering structure of financial system.
  • A stable coin as digital form money just like cash but instead claim on private bank instead claim on central bank emitted liability.
  • Create acceptance.
  • Offer wallet solutions.
  • Extend usage.
  • Pay-per-use business cases for internet things (IoT).

Open banking/API banking
  • Using an open API infrastructure enables third-party providers to build applications and services around the financial institution.
  • Banks are evolving into financial service platforms, implementing banking as a service (BaaS) concepts.
  • The aim of open banking is to enable the bank account owners to use their banking data across banks and third-party service providers (TSP).
  • Create banking ecosystems.
  • Ensure connectivity between players.
  • Capture efficiencies in new Know Your Customer (KYC) processes.
  • Rethink value-added services like financing, financial management, and alternative product offerings.

 

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