Instant payments in focus as P27 nears testing with Swish banks
Instant payments are at the top of P27’s agenda. And more than a dozen banks connected to Swedish instant payments solution Swish are set to test the Nordic payments platform by the end of the year.
“We’re doing everything we can to realise our vision and ambition,” says Customer Relations Director Jacob Groth.
After nearly two years of painstaking implementation, P27 will soon be ready to transition from working with prospective participants to actual customers.
First in line are 13 banks connected to Get Swish AB, the dominant instant payment solution in Sweden.
“We are currently onboarding and testing with real customers, and that’s very exciting,” he says.
The current timeline calls for SEK instant preparations to be finalised during the second half of 2022, followed by SEK batch preparations to be finalised in early 2023.
‘An important milestone’
Groth calls the commencement of testing an “important milestone” in P27’s journey toward creating a cross-border, cross-currency payment platform in the Nordics.
“It’s always exciting for any new company to take on your very first customers,” he says.
It’s no accident that banks connected to Swish, which is used by more than 90 percent of the Swedish population, are at the vanguard of P27’s march toward processing the platform’s first transactions.
In a second white paper released in June, P27 highlights the growing importance of instant payments and the need to ensure systemic resilience moving forward
“A modern instant payments infrastructure distributed across data centers in the Nordic countries will significantly improve the resilience and security of retail banking systems in the region,” P27 writes in the white paper, entitled The payments enabler for the Nordics.
Harmonizing payments in the Nordics
While Swedish banks may be the first to join P27’s platform, their Danish counterparts aren’t far behind. Like in Sweden, a transformation committee has already been set up in Denmark to facilitate the transition towards P27.
The Danish central bank’s move to include the Danish krona in the European Central Bank’s real-time settlement system TIPS, followed by a sector decision to move to P27, was another important milestone for P27.
One common clearing system in Denmark, Finland, and Sweden, as well as instant settlement in TIPS, will harmonize the way payments are made across the Nordics, Groth explains.
“Even if the journey is now a bit longer than we first anticipated, it’s still a very nice fit,” he says.
“We now have central banks in the region moving in the same direction. That type of alignment will make it easier for us to leverage our vision of an integrated Nordic payments region.”
The move will allow banks to start aligning their processes and how they manage their liquidity to an even greater degree.
“Rather than having multiple systems to support the same processes, you can now have one system supporting those processes across multiple currencies, which is a huge benefit,” says Groth.
An integrated payment region
P27 will also level the playing field between large and small banks in the region.
“We want to democratize access to new services and capabilities by making it easier for smaller banks to have the same reach as larger banks,” he explains.
Propelled by Nordic central bank alignment around TIPS and the growth in instant payments, P27 will be able to offer Nordic banks full reachability across the eurozone.
In addition, P27 will make it possible for banks in Germany or the Netherlands to settle payments in Nordic currencies.
“This will enhance the value of the Nordics as an integrated payment region where it’s easier to do business – a region that will be most easily accessible by connecting to P27,” says Groth.