Worldline - 2019 Universal Registration Document
THE PAYMENT INDUSTRY Non-card based payments
Non-card based payments B.2
There are a variety of non-card based payments that are increasingly popular. Such methods will continue to grow and have transformative potential. Such methods include:
Credit Transfers B.2.1
Other Alternative Payment B.2.4 Instruments
A credit transfer is a form of account-to-account payment order which it submitted by the payer to his financial institution. The amount on the order is then debited from the payer’s account and credited to the payee’s account.
There are a number of so-called “alternative payment methods” which are becoming increasingly popular, particularly in the remote commerce landscape. Some methods are nothing more than overlay methods that rely on the existing rails, others, such as cryptocurrencies, challenge existing rails. OBeP B.2.4.1 Online Banking ePayments was initially designed to address eCommerce payments as an alternative to cards. During the online checkout process, the merchant redirects the consumer to their banking online banking site where they login and authorize a credit transfer with the given amount to the merchant. Once confirmed the consumer is redirected back to the merchant site. The Payment Service Directive 2 (PSD2) has opened up this potential type of payment method by requiring banks to provide APIs to access accounts and thus enabling a new classification of Payment Initiation Service Providers. Please refer to Section C.4.1 for more details. The most successful example for ObEP is iDeal in the Netherlands. Digital Wallet B.2.4.2 A digital wallet has the ability to store payment information for a variety of different payments methods. One of the most globally well-known is PayPal. Cryptocurrency B.2.4.3 2019 has seen a great deal of discussion around cryptocurrencies, particularly since the announcement of the Facebook-driven global initiative Libra. The simplest description of a cryptocurrency is that it is a digital currency which uses cryptography to secure the online transactions. Cryptocurrencies, work using a technology called blockchain, a decentralized digital ledger spread across many computers that manages and records transactions.
Direct Debit B.2.2
A direct debit is based on a prior mandate which authorizes the payee’s service provider to collect amounts from the payer’s account at a specific frequency. It is most commonly used for regular bills such as utilities.
Instant Payments B.2.3
Instant or real-time payments are defined by the Euro Retail Payments Board (ERPB) as electronic retail payment solutions that are available 24/7/365. Account-to-account instant payments require the immediate or close-to-immediate interbank clearing and settlement of the transaction so that the payer is debited immediately and the payee is credited immediately. Throughout the world, the number of real-time payment initiatives of one form or another has grown substantially over recent years and will continue to increase. In Europe, The EPC’s (European Payment Council) SEPA Instant Credit Transfer scheme is now operational and although optional, it is expected that it will change payments as more and more new use cases appear. As in the card example, such methods depend on mechanisms to issue, accept, clear and settle the payment instrument. Many Financial Services providers also choose to outsource the processing of these payments to third party processors such as Worldline. Worldline was among the first CSMs (Clearing & Settlement Mechanism) to support this. Instant Payments have many advantages over cash and cheques and are thus ideally suited to replace these instruments. Also, driven by mobile applications, they have the potential to take market share from the debit card longer term. The key drivers will be ubiquity, interoperability, enhanced user experience and price.
Universal Registration Document 2019
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