Instant Payments: 50 Million Customers Can Transfer in Seconds

"The Sparkbaden-Finanzgruppe is the first group of institutes in Germany to offer real-time transfers," said Helmut Schleweis, president of the German Association of Savings and Deposit Funds. Savings Banks (DSGV). Instant money transfers are also called "instant payments".

"Our customers can use it to transfer money in seconds – easily and securely." Fast account-to-account transfers in Europe have been technically possible since November. Until now, only HypoVereinsbank (HVB) offered real-time bank transfers in Germany.

Experts expect innovation to stimulate modern payment traffic.

What is meant by "real time"? Collect the transfers and then work in batches. In addition, orders that customers spend online are usually only executed with a delay. With instant payments, providers promise that money will be transferred from one account to the other within ten seconds. The Bundesbank states: "Payment service providers that offer instant transfers must be available 24 hours a day every day of the year to pay for these payments."

Since when are instant payments made?

November 21, 2017, the "SCT Inst" called fast transfers possible. On the same day, HVB, which belongs to the Italian group Unicredit, tested the system. "When we processed our first transaction from Germany to Italy in 2.5 seconds, we were already proud," recalls Gerhard Bystricky, Head of Product Development for Payment Transactions at HVB. "Even today, more than 95 percent of instant payments are made in less than three seconds." Since November 27, HVB customers can order real-time referrals through regular online banking.

What have the customers? payments in real time?

"The big advantage of Instant Payments is that, unlike a traditional paper transfer or online transfer, you know directly if the money has arrived. Because the receiving bank has to issue a confirmation ", says Ernst Stahl of the University of Regensburg, who has done research on the subject several times. For example, anyone who sells his old car privately must take into account the risk that the buyer will not pay. If the transaction was processed by real-time payment, the seller would have direct badurance that the money is in his account.

Even those who buy online have the advantage that the more the trader has money, the faster the goods will be sent. Steel expert also sees great potential for business: a freight forwarder can apply for a payment before the truck is unloaded, especially among new customers abroad. However, until now, it applies an upper limit of 15,000 euros for instant payments payments

Which German banks are still with?

In Germany, HVB has long been alone on the ground, because participation is voluntary for the banks. Thus, the use of instant payments has been limited: For real-time payments only work if the recipient's bank offers them. As of July 10, the approximately 50 million customers of the 385 savings banks in Germany can now use it.

Is the entry into the savings bank market a breakthrough?

"This is a very important step for the German market. Oliver Hommel Expert. "But for a real breakthrough in instant payments, other banks and banking groups should follow suit." Banks Volksbank and Raiffeisen want to create the technical conditions by the end of November, and their clients should start in 2019. "We are confident that in the long run, that is to say in five to ten years, instant payments will completely replace the normal transfer, as this makes no sense for the institutions of the world." 39, offer two parallel systems, "says Hommel. Aus?

There is still room for improvement. According to an overview of EBA Clearing from June, 22 institutions in 12 countries currently offer instant payments. If you include institutes that have clearly positioned themselves to participate in the process, you will arrive at nearly 1100 payment service providers in 15 countries. The Single Euro Payments Area (SEPA), which aims to standardize and speed up cross-border credit transfers, direct debits and card payments, comprises 34 countries with a total of 4,200 payment service providers: in addition to the 28 Member States: Iceland, Liechtenstein, Norway, Switzerland and Monaco. and San Marino.

Does the new service cost anything?

It depends on the account model. Some Sparkbade estimates 50 cents per transaction – which "is not conducive to the whole issue of instant payments, of course," says the steel expert

What happens in case real-time transfer problems? The researchers around the steel: "In case of involuntary or accidental transfer – as happens, for example, in a hacker attack or phishing – the transaction can not be canceled and the amount transferred is lost." Banks provide with Instant Payments As with a traditional transfer, it is possible to recover an amount transferred by mistake. "If an incorrect amount is typed, the money is gone at the moment.In such a case, however, the customer can make a normal payment call," says Bystricky, employee of HVB.