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In recent years, fast payment systems have been actively developed in many countries. In our country, this service appeared immediately in the most convenient and simple version for users.
What is SBP and how they changed
According to the World Bank, fast payment systems (FPS) are now operating in more than 60 countries. Several other states are planning to launch them in the near future.
The basic principle of such systems is to work in real time or close to it. The services are available 24 hours a day, 7 days a week. Such systems have helped to get away from the usual three to five working days for consumers and businesses, which were previously required for the transfer. The client receives the money faster than the bank itself: the system simply informs the credit institution that the transaction is completed.
The first prototypes of such solutions appeared in the second half of the 1973th century. For example, in Japan, the Zengin System was launched in 2010. It was quite different from modern fast payment systems: transactions took a long time and took place only during business hours. Implementation of round-the-clock instant transfers was possible only in the XNUMXs after the next system update.
In fact, real SBPs only emerged in the XNUMXst century, when Japan, Mexico and several other countries modernized their payment systems, and Hong Kong, Poland and Australia developed new ones.
The most obvious progress in the development of the SBP occurred in the last five years. “Most countries started to implement SBPs after seeing the success of the first movers and appreciating the benefits that the systems bring,” the World Bank notes.
As technology improved, the service became more convenient and accessible. Early versions of the FPS in many countries only allowed payments to be made using a bank account. This made transfers tedious and not very secure. Users had to share full account details in order to start the operation.
However, then simpler identifiers appeared – first of all, mobile phone numbers. They are linked in the system to bank details. Therefore, it is enough for the user to register once in order to make transactions using only a phone number.
How modern fast payment systems work
- Faster Payments (UK)
Launched in 2008 at the initiative of the Bank of England. Supports b2b, b2c, c2b and p2p payments.
Since 2014, Faster Payments has been running a free c2c service Paym, which allows individuals to transfer money from one bank account to another using a phone number.
- Faster Payment System (Hong Kong)
Launched in 2018 to meet the growing market demand for efficient retail payment services. Inside the service, money can be sent to a phone number or email address.
Initially, the system included p2p and c2b payments. In December 2020, the c2g format was launched: now you can pay state duties and fees through FPS.
- Target Instant Payment Settlement, TIPS (Еврозона)
It has been operating since 2018, it provides for payments on p2p, c2b, b2c and b2b models.
So far, payments through TIPS can only be made in euros. In 2022, the service is planned to be integrated with the Swedish financial system, as a result, it will be possible to transfer money in kroons.
How SBP works in our country
In our country, the Fast Payment System was launched at the beginning of 2019 and immediately in an advanced version – the identifier in it is the mobile phone number linked to the bank account. SBP launched the Bank of our country.
The domestic SBP complies with international security standards and the exchange of electronic messages between organizations in the financial industry, emphasize its creators.
As of May 2021, the SBP includes 210 banks, including 12 largest credit institutions such as Sberbank, Alfa-bank or VTB. In the system, you can make payments between your accounts in different banks, as well as send money to another individual, receive a transfer, pay for goods or services using a QR code.
Transfers between individuals remain the most popular option. According to the National Payment Card System (NSPK), which acts as the clearing center of the SBP, today this service is used by 20 million people. Since launch, they have made 220,75 million transfers totaling ₽1,48 trillion. The number and volume of transfers for the six months from October 2020 to March 2021 increased by about four times compared to the previous half of the year.
How to use SBP
- Connect to the system
SBP is integrated into the applications of participating banks. Open your banking application, find the “Settings” section and the “Agreements” or “Contacts and transfers” subsection. Check the box next to “Fast Payment System”.
- Make transfers
In the bank’s mobile application, select “Transfer via SBP” or “Transfer by phone number / via SPB” and mark the account from which the money will be debited. Select the contact you want to send funds to, as well as the recipient’s bank and the transfer amount. Funds will arrive within minutes.
In addition to speed, users are attracted by the possibility of saving. Transfers up to ₽100 thousand per month in the SBP are free. Above the limit, the commission can be 0,5%, but not more than ₽1,5 thousand. Users do not need to enter any account numbers or other details. It is enough to know the recipient’s phone number.
In what situations are quick transfers between individuals useful?
- Transfer money to another bank to pay off a loan
If you receive a salary in one bank and pay a mortgage in another, using the SBP you can transfer funds every month without losses and commissions.
- Borrow or pay back
On the one hand, you do not need to mess with receipts. On the other hand, the fact of the transfer is recorded in the system, and the sender can at any time confirm that he really transferred the funds. This will help eliminate disputes.
- Help loved ones with large purchases
Since the operation takes only a few minutes, such transfers do not need to be planned in advance. That is, with the help of SBP, you can support loved ones even in unforeseen situations.
- Split the bill at a restaurant with friends or colleagues
If someone from the company has discounts in a bar or restaurant, it is more profitable to pay the bill from one card. And to pay among themselves – with the help of SBP.
How fast transfers grew into a pandemic
Against the background of the coronavirus and the imposed restrictions, instant online transfers have become even more relevant and popular. The pandemic has once again highlighted the need for fast, cost-effective and ubiquitous digital payments, say World Bank experts.
In many countries developing FPS, these systems have shown unprecedented growth in the volume and number of transfers. Real-time transactions in six countries more than doubled from the previous year, according to data from FIS, a technology solutions company for merchants and banks. For example, in Australia the growth was 214%, in the Philippines – 309%, in Poland – 208%.
India, where the number of transactions grew by 213%, set a world record in this way. About 41 million transactions per day were carried out in its fast payment system. This is almost 15 times more than in 2018. FIS experts attribute this coverage and dynamics to the fact that in the second most populous country in the world, smartphones have already become a common payment tool, and the SBP itself includes many additional options.
However, the record figures are not limited to Asian countries with huge populations. In the UK, where one of the first next-generation FPS, Faster Payments, operates, users made 2020 billion payments in pandemic 2,9. This is the highest figure in 12 years of system operation.
How SBP will develop further
The experience of countries with the most advanced financial systems shows that the FPS is not an intermediate stage of development and not a pandemic trend, but an important part of the financial infrastructure. For example, in Sweden, which is considered the most “cashless” society in the world, the Swish system has been successfully operating since 2012. The idea of the service was born from the desire to provide a convenient service for people who are used to chipping in for joint dinners.
Today, the Swish app, which powers the SBP, has been installed by 7,8 million Swedes in a country of about 10 million. It is readily used for online shopping: it is the most popular online payment method among people from 18 to 40 years old. However, the original function – settlement between individuals – continues to gain popularity and acquire new opportunities. For example, last year the application introduced a function that allows you to remind friends and acquaintances to pay.
For now, most SBPs in the world remain domestic. But the Nordic countries, including Sweden, are gradually mastering payments between different states. A similar project has been implemented in the Eurozone since 2018, although it was much easier to launch international transfers there: all participants use one common currency.
But despite the difficulties with multicurrency settlements, cross-border payments will develop and stimulate the use of FPS, FIS is confident. At the same time, transfers between individuals will also retain their importance, and the function of paying using the service will become one of the drivers for the spread of the SBP. In our country, this service is already gaining popularity.