A Payments Nirvana is an absolute endgame for payments

Posted on 12th September 2022

Fast and instant transactions are already widespread. But in this Q&A with Payments Expert, Barry O’Sullivan explains how they’re just getting started.

A Payments Nirvana is an absolute endgame for payments -  Barry O'Sullivan

Barry O’Sullivan, Head of Payments Infrastructure at OpenPayd, has described this ‘Payments Nirvana’ and spoke of its accelerating realisation.

Payment Expert: To start off, could you tell us a little bit more about rail-agnosticism and its potential as a vital tool for the future of payments?

Barry O’Sullivan: There are two schools of thought when it comes to the future of payments. One view is that eventually we will have just one global payment rail processing every payment from anywhere around the world. The other is that a ‘one rail to rule them all’ approach is never going to work. Instead, we should be focussing on improving the connectivity between different payment rails, so that no matter which rail a business or customer wants to use, the experience is exactly the same. 

This second approach is rail-agnosticism. Ultimately, people are always going to have different payment preferences. But the underlying payment rail they use shouldn’t affect their user experience. Matching that instantaneous experience between different rails will certainly accelerate global commerce and change the way we think about cross-border payments. 

PE: Can you speak on the acceleration of a ‘Payments Nirvana’, what it means for businesses, customers and the obstacles it may present to prevent this?

BO: A ‘Payments Nirvana’ is something we talk about a lot at OpenPayd; a state where every payment is frictionless and instant. Imagine a situation in which you could send money to a friend in Brazil using your preferred currency, and they receive it instantly in BRL. Or buy a product from India using crypto, with the business receiving the funds in real-time in rupees. 

This is the absolute end game for payments, and we are slowly getting closer to it. Over 65 countries now offer real-time local payments. However, as well as building more real-time payment rails across the world, we also need infrastructure that allows these rails to connect with one-another and offer the same experience to the user as their domestic payment rails.

This is obviously no small feat. Regulation needs to be agreed internationally, and technically speaking, delivering high-speed currency transfers to those end users 24/7 requires highly robust financial infrastructure – that is precisely what we’re building at OpenPayd. 

There’s a long road ahead of us, but the destination is definitely worth pursuing.

PE: Are you aware of companies who already have rail-agnostic payment systems and how has it benefited their cross-border, multi-currency payments services?

BO: In terms of a company being fully rail-agnostic, I don’t think we’re there yet. However, there are plenty of examples of us moving in that direction. 

For example, when OpenPayd partnered with Bitfinex, we were able to give their customers access to our network of global rails and licences. We introduced SEPA Instant payments for euro-denominated deposits and withdrawals, giving their European customers more ways to purchase crypto and withdraw their fiat in real-time. This radically cut the cost and time involved for Bitfinex customers to top up their accounts. That project is just a glimpse of the ultimate vision of Payments Nirvana – but we can go much further.  

PE: How has SEPA payments bolstered the cross-payment process in Europe and are there any current issues with the service considering the current economic downturn across a host of European countries?

BO: Payments is all about speed. Everyone wants to get paid faster, and those sending funds don’t want to wait days for transactions to settle. It has gone past something customers want – they expect it. Thanks to SEPA Instant, that’s now a reality across much of Europe. 

However, the benefits of real-time payments actually go beyond this. Research from FIS’s most recent Flavors of Fast, found that 85% of gig economy workers would work more often if they were paid instantly. Another interesting case in The Netherlands has shown that real-time payments can be used for healthcare insurance disbursements, promptly sending payouts to those in need of funds. 

What SEPA Instant brings is improved infrastructure. No matter the current economic health of individual countries or even the entire continent, payments are stronger because of it. 

PE: OpenPayd’s partnership with Bitfinex suggests that digital assets/cryptocurrencies are playing a more prominent role. Is there an alternative definition to a ‘Payments Nirvana’ where crypto currencies become the new currency for fiat-to-crypto payments?

BO: The vision of Payments Nirvana is that people should be able to send and receive money in multiple ways. Cards, bank transfers, and yes blockchain-based payments too. So in short, no, crypto rails will not displace other means of cross-border payment. Instead, they’ll become another convenient option to choose from. The challenge is still the need for interoperability between fiat and crypto.

Blockchain is truly game changing, but it will be just one element of a modern, rails-agnostic payments infrastructure.

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