The demand and adoption of alternative payment types over the past few years has been dramatic, driven by consumer requirements for more secure, easier to use and privacy compliant functions. A new form of Bank sponsored alternative payment type has started to emerge around the world which has been designed to meet these consumer demands and consumer adoption in many of these countries offering the payment type has been very strong validating the need for the payment type.
The new payment type sponsored by banks leverages the existing banking infrastructure, including online consumer authentication, cash management services, and settlement services. An online transaction commences at a merchant site where a consumer chooses the products or services that they wish to purchase. The consumer then identifies their existing bank from a list of participating Financial Institutions and is then redirected to the banks site where the consumer authenticates their identity using their existing online banking credentials. The consumer is then presented with details of their merchant transaction and confirms an instruction to the bank to make a payment to the nominated merchant.
It has been identified that a key component of these networks is absent and that is global interoperability of national networks – allowing a consumer in one country on one network to purchase goods or services from a merchant in another country on another network. It is the Council’s objective to enable interoperability between similar international networks where council members agree a set of international operating standards.