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Podcast: Payment networks of the future


Mandating financial institutions connect to new payments infrastructure is one model central banks could adopt if looking to drive usage of certain systems.

Speaking on CB On Air’s latest podcast episode, Liz Oakes from Mastercard and Somya Patnaik of ACI Worldwide discussed the challenge of ensuring new payments systems are available to members of the public.

Patnaik noted that central banks in Brazil, Thailand and Malaysia had mandated certain requirements alongside the launch of new payments infrastructure. In one instance, this involved being ISO 20022-compliant before being allowed to connect to a new system.  

However, Oakes noted that merely mandating financial institutions to connect to systems does not necessarily mean those services will be passed on to a consumer.

“The fundamental question needs to be what drives a better outcome,” she says, drawing on Europe’s Payment Services Directive 2. PSD2 does not mandate technical connection but instead asks for assurances that services will be available to the consumer.  

Around the world, a number of central banks are engaging with new payments initiatives, whether that be on reducing the cost and improving the speed of cross-border payments, to whether central bank digital currencies may provide efficiency gains within the retail payment space.

One interesting debate is whether to grant non-banks access to existing infrastructure. The Bank of England has been one of the first central banks to allow non-bank payments service providers access to its real-time gross settlement system accounts.

“Non-bank access is critically important to the future of payment systems,” Oakes said. “The idea a new fintech would need to rely on the legacy infrastructure of an incumbent to gain access to the central bank’s payment system is flawed.”



00:00 Introductions

00:59 Driving payment system usage

03:35 Should connection be mandated?

10:55 Broadening access requirements

14:00 Ensuring an open ecosystem

15:30 Navigating the onboarding process

18:23 The impact of QR codes

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