BIS CPMI report highlights rapid development of retail fast payments and implications for real-time gross settlement systems

• New BIS CPMI report reviews recent developments in retail fast payment systems (FPS) based on a survey of BIS CPMI member jurisdictions.
• FPS can have significant implications for the operations and services of real-time gross settlement (RTGS) systems, including potential modifications to their access criteria and operating hours.
• While differences in approaches remain, central banks tend to play important roles in facilitating FPS operations.

The implementation of retail FPS across the globe is continuing at a rapid pace, with significant implications for incumbent RTGS systems, according to a report published today by the Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI).

Developments in retail fast payments and implications for RTGS systems takes stock of recent developments in retail FPS, discusses the implications for RTGS systems and examines the role of central banks in these systems.

Based on a survey of CPMI member jurisdictions, the report highlights the following findings and implications:

• global implementation of fast payments is continuing at a rapid pace;
• the use of a given FPS (ie adoption rate) is generally low in the early stages of its implementation, although some recent FPS have been more rapid in their take-up;
• FPS can have significant implications for the operations and services of RTGS systems in the same jurisdiction, such as the modification of access criteria and extension of operating hours;
• FPS are increasingly settling obligations between banks and, where relevant, non-bank FPS participants on a gross (ie payment-by-payment) basis in real time;
• most jurisdictions have either adopted or are moving towards ISO 20022 as the messaging format for their FPS; and
• while differences in approaches remain, central banks tend to play important roles in facilitating the operations of FPS.

The report also highlights that designing, implementing and operating an FPS is complex. Challenges include ensuring high system availability (eg during nights and weekends) and reliability requirements.

The insights from this study may be relevant for jurisdictions considering whether to implement a new FPS, or modify an existing arrangement and, more generally, for further enhancing cross-border payments.

The Bank for international Settlements' CPMI is an international standard setter that promotes, monitors and makes recommendations about the safety and efficiency of payment, clearing, settlement and related arrangements, thereby supporting financial stability and the wider economy.