As the dust settles on 2016, which was a seismic year in so many ways, the financial services industry can look ahead to what 2017 might bring. For the payments sector, the past year saw a number of noteworthy developments in Europe.
Among them was the publication by the European Payments Council of the first rulebook for the Single Euro Payments Area Instant Credit Transfer initiative. Known as SCT Inst, the optional scheme will facilitate real-time payments of up to €15,000 ($15,990) across more than 30 European countries. The first transactions are due to take place in November 2017.
In the UK, the final quarter of 2016 saw the Payments Strategy Forum announce the most radical changes to the payments system since the 1960s. The strategy, which is designed to give consumers more control and combat fraud, will be gradually executed over the coming years up to 2020.
So can we expect to see more headline announcements like this in 2017? In a speech at the French Payments Committee conference in Paris this month, Yves Mersch, member of the executive board of the European Central Bank, said 2017 will be “a decisive year for innovative retail payment services”.
He referred specifically to person-to-person (P2P) mobile payments. It’s possible that, by the end of this year, European consumers will be able to transfer money to another individual using only the recipient’s phone number.
Mr Mersch said: “Aligned with the timeline for the implementation of the instant payment scheme, the Eurosystem expects the launch of a standardised look-up service that allows P2P mobile payments using the mobile phone number of the payee as a proxy for the IBAN [international bank account number].
“This service should be launched by the end of 2017 and should not be restricted to national IBANs.”
Against the backdrop of the revised Payment Services Directive, these changes paint a picture of a European payments industry that is increasingly dynamic, flexible and competitive.
The sector will offer exciting prospects for fintechs in the years to come, which in turn will open up new collaboration opportunities for established financial institutions.