EBAday 2024: Turning European dialogue into solutions for the new payments era

Ehrmann introduced the theme - 'Orchestrating the Dialogue on Payments – The Collaborative Advantage' and praised the location of the event - Lisbon, Portugal - reiterating how the city and country has excelled with regards to digital transformation.

He stated that the challenge that European payments has to contend with now is how to take "SEPA into a new era of instant payment and digital transformation." This is an obstacle he thought was reflected in the event agenda.

Before introducing the rest of the conference, Ehrmann said: "When we come together at EBAday and beyond, share our experiences, identify common pain points, and discuss the best solutions for the ecosystem, we truly do orchestrate the dialogue on payments and ultimately turn dialogue into the practices and solutions of the new payments era."

Bank of Portugal’s national strategy for retail payments

EBAday host keynote speaker, Hélder Rosalino, member of the board, Banco de Portugal, described the central bank's strategic vision and key priorities, as defined in collaboration with stakeholders.

Rosalino said: "We have observed a huge reorganisation on the supply side of the payments market, with new players entering the market (fintechs and bigtechs), based in new business models and agile infrastructures, providing also non-financial services.

"We have also experienced the introduction of new technologies in payments, such as distributed ledger technology (DLT) and artificial intelligence (AI), that can be used in detecting anomalies and preventing fraud, in increasing the speed and security of transactions, and in improving the services provided to the consumer."

Rosalino also went on to describe Portugal’s journey to its current payment infrastructure: "This story is not new for any of us, but shows that the whole society and the payments ecosystem evolves fast and continuously."

He then outlined the four key priorities for the Bank of Portugal’s National Strategy for Retail Payments. These included promoting safety across payments, launching confirmation of payee and the bank’s own product SPIN to counteract fraud risks experienced an increasingly digitalised payments space.

In addition to this, instant credit transfers are to be favoured. Rosalio stated that this goal is shared by the adoption of instant payments via the Eurosystem and with European co-legislators. "This regulation will surely foster a wider adoption of this payment instrument in Europe, by ensuring its widespread availability, its competitive costs, and its increased security."

Ensuring an open and competitive market is also of paramount importance for Rosalino. He said that the central bank is ensuring a level playing field between all entities and removing barriers for new players into the market. Moreover, the Digital Euro project will "position the European Union at the forefront of advanced economies when it comes to central bank money."

The future of payments: innovation and collaboration

The first strategic roundtable of EBAday was moderated by Joy Macknight, journalist and editor, who was joined by Tsvetanka Nankova, global head of sales, institutional cash and trade finance, Deutsche Bank, and Michael Reinwald, head of financial institution group sales Europe, J.P. Morgan Payments.

"There will be more and more non-bank players in the payments market,” commented Reinwald. Nankova added to this outlook stating that “there will be more rails and new ways in which we are going to settle payments that will drive more efficiency, more transparency."

Macknight moved the conversation to discussing the future of B2B payments. Nankova stated that from all angles, all participants across the payments sector is focused on real-time digitally enabled payments, but from the perspective of treasury, she said: "we’re using AI to offer data driven multinational corporations such that they can forecast their cashflows, they can ultimately predict payment goals better."

Reinwald added his observation on this topic and said: "In the retail customer space, it was more about the shiny front end, the onboarding and the ease of usage. On the treasury side, it was more seamless operation and investability. Now these words actually converging to a degree."

Nankova continued: "The technology is really going to improve, and it's going to drive speed in terms of settlement, but protecting the financial system from risk fraud will always prevail." Looking to the future of collaborating as an industry, Reinwald said that the future of collaboration is "shifting a bit", which will be more in line with a few banks grouping together and innovating as one.

Nankova agreed with this point, stating that correspondent banking will continue and running payment transactions on blockchain is just "creating more islands, that is not what the industry needs. It needs more cooperation."