MAGYAR NEMZETI BANK
3.3 Development of innovative payment services based on the central infrastructure Developing innovative payment solutions based on the basic service is essential, because these will allow customers to conveniently initiate instant credit transfers in all payment situations. Although the basic infrastructure allows credit transfers to be continuously available and executed rapidly, similar to cash payments, in order to make instant credit transfer a relevant alternative to cash in all payment situations, convenient and simple innovative payment solutions are needed. In practice, this means for example the development of mobile applications that are user-friendly and allow payments to be made with only a couple of clicks, the scanning of a QR code or the use of NFC data transfer technology (a solution similar to the contactless technology available in the case of payment cards). Interoperability between the developed solutions is also important, so that they can be used in all payment situations. This can help to avoid situations where consumers need to download, install and use different applications in different payment situations, which may easily discourage even users who are open to digital solutions. The MNB is facilitating the development of innovative payment solutions based on the instant payment system by drafting guidelines on the instant payment processes. The benefits of the instant payment system can be fully utilised if based on this, widely used innovative payment solutions become available to households and companies. To that end, the MNB is drafting a guideline on the main payment processes of instant payments to help developers on the market to better understand the potential uses of instant payments. The guideline will provide market participants with a detailed description on the steps of the payment processes used in different payment situations (P2P money transfers, bill payments, purchases at physical acceptance points, purchases at online acceptance points) as well as on the tasks of the participating players. The development of innovative services is also facilitated by the Hungarian QR code standard that is being developed by the MNB. A crucial element in the instant payment process is that payers and payees need to be able to identify each other to initiate a request to pay or an instant credit transfer. The quickest and most convenient way for this is if the parties share information with each
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PAYMENT SYSTEMS REPORT • JULY 2019
other through an automated data transfer method. Among other solutions, QR codes, with the help of which already several (mobile) payment services are available all over the world, can be used for this. As in the case of Hungarian instant payments the law stipulates that data entry methods, thus also QR codes, need to be readily interpretable to everyone, the development of proprietary data entry solutions cannot provide a competitive edge; at the same time, the emergence of many different solutions signals a growing demand for additional development for market participants. For example, in the case of mobile payment applications, the payment solutions need to be prepared to handle various different data entry methods to ensure an adequate market share. In line with the demands of market participants, this situation is managed by the development of a Hungarian QR code standard under the guidance of the MNB, which may greatly facilitate the creation of widely used payment solutions based on instant payment. Several market participants have already started developing innovative services related to the instant payment system. The MNB, as the professional leader of the project aimed at the Hungarian introduction of instant payments, continuously monitors not only the progress of banks’ internal IT developments, but also the development of innovative payment solutions. A detailed questionnaire focusing on the latter topic was sent to account-servicing payment service providers, based on which several actors in the Hungarian banking sector plan to provide innovative payment services after the system is launched. Other important features of the central infrastructure include openness and interoperability, which, from a service development perspective, means, among other things, that non-bank payment service providers and retailers can both join. This means that a payment ecosystem may emerge related to the instant payment infrastructure that can be directly joined by not only account-servicing payment service providers but also payment initiation service providers and retailers. The MNB very much expects payment service providers to develop innovative services to provide access for their customers to instant payments. If payment service providers strive to fulfil only the minimum requirement in
