Why is Payments Modernisation necessary?
Most banks are in the process of investigating modernising their payment systems, which will allow them to accommodate the most recent ISO standards, but also to accommodate mobile payments, immediate payments and Fintech disruptors.
Modernisation of payment systems will happen on an evolutionary basis over the next years, and will facilitate achieving the following goals:
- Promotion of economic growth by improving the velocity of value
- Enhanced security resulting in fraud reduction
- Improved efficiency
- Better stability of the National Payment System
- More effective monitoring
- Reduced cost of operation, thereby facilitating financial inclusion
These goals are driven by emerging consumer and business requirements for speed, efficiency and the requirements for more data to be moved together with payments. Extra data contained in payments is particularly important when considering the modern requirements for Anti-Money-Laundering requirements. With the global reduction in the numbers of cheques and the exponential increase in the adoption of digital payments, it has become a lot more important to ensure that payments are secure in order to reduce or prevent fraud.
Payment modernisation is also becoming more important from a debit transaction perspective, where it may be necessary to provide mandates with payment requests, and to track these requests for a period of time to ensure effective collection of payments.
Payment innovation has for some time been happening outside of traditional banks, at MNO’s with mobile payments and at other Payment Service Providers, and banks are feeling the need to evolve their legacy systems in order to remain competitive and drive transaction volumes.