Building a real-time gross settlement system, or how to innovate in faster payments

Wednesday 4 December 2019 08:03 CET | Editor: Andra Constantinovici | Interview

Falk Rieker, Global Head of IBU Banking at SAP sat down with The Paypers, to talk about the RTGS platform, which will run on the SAP Payment Engine application

Accenture, SAP SE and R3 are collaborating and co-innovating to build a real-time gross settlement system that will enable faster, more efficient, reliable and secure payments between banks and customer. The RTGS platform will be serving as the central hub for payment initiation, processing, clearing and settlement, alongside R3’s Corda platform and Accenture’s blockchain capabilities.

Could you please tell our readers more details about SAP SE’s platform and who are the main actors in the payments value chain that will benefit from Accenture, SAP and R3’s new settlement system? 

The latest real-time gross settlement (RTGS) prototype from SAP, Accenture and R3 was created with both banks and the customer in mind to improve today’s digital banking experience. In the co-innovation project, SAP brings to the table its Payment Engine application, which serves as the central hub for payment initiation, processing, clearing and settlement.  

As today’s current payment settlement infrastructure is quite complex for most customers, this collaboration has created a more flexible way for new payment technologies to integrate into current banking formats through distributed ledger technology (DLT) and currency tokens. We believe we are creating a more efficient and more secure banking experience for customers by linking these tokens to payment systems. 

What are some of the advantages that Accenture, SAP and R3’s new settlement system brings to central banks handling high-value transactions? 

As more customers show a willingness to adopt digital payment options, banks have seen a need to adapt to these new forms of payments where there’s potential for customers to transfer funds at higher values because of the ease of use. 

The seamless integration between conventional and token-based payments brings a major advantage, which is R3’s specialty in the partnership. In addition, the Corda product allows these higher-value transactions to take place more privately using smart contracts and reducing transaction and record-keeping costs. 

What is the current overview of the progress that blockchain tech has made in real-time payments and how does SAP contribute in this picture? 

We live in a world where real-time, electric and digital payment options are drawing customers in as a quick, efficient – and what customers expect as – a safe banking option between their favorite payment applications and their banks. 

SAP sought out to create a platform that would allow these larger transactions to be completed at more efficient and secure rates. SAP has chosen to partner with R3 and Accenture, as both have proven to be leaders in the blockchain field and are committed to creating frictionless experiences for customers across financial services industries. 

The payment platform plans to allow for integration and interoperability between DLT-based and classic government-issued payments and settlements. How is the harmonization between these two systems achieved and what kind of challenges did you face in building this infrastructure? 

Currency tokens have proven to make this co-innovation a reality for bankers. These tokens facilitate end-to-end settlement between DLT-based and classic government-issued payments and settlements. The currency tokens are used in preference to digital currencies in the design as they serve as a proxy for central bank fiat currency and use cryptography to increase security and authenticity.  

“As digital currencies gather momentum, the need for interoperability between conventional and token-based systems is key in meeting the promises of tokenization,” said Cathy Minter, chief revenue officer at R3. How can token-based systems solve the main pain-points in online payments right now? 

The largest pain-point, from my perspective, that we are witnessing from customers today is the fear of either their bank accounts or online banking applications getting hacked. Privacy and security are a main concern for 2020, and when banks partner with SAP, we work to ensure customers that their funds are safe.  

About Falk Rieker

Falk Rieker, Global Vice President and Global IBU Head for Banking at SAP, is a senior level financial services professional and SAP veteran with over 20 years’ experience connecting bankers with the technology they need to succeed in the workplace. In his current role, Mr. Rieker is responsible for leading the banking solution strategy and solution management teams at SAP. He is part of SAP’s Global Leadership Team for banking and responsibilities include the definition and support of solution and go-to-market strategy, roll-in and roll-out of new solutions and releases, co-innovation with software partners to complement the solution portfolio, pre- and post-sales support of customer projects as well as the support of press, analyst and marketing events. 

About SAP

As the Experience Company powered by the Intelligent Enterprise, SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP® system. Our machine learning, Internet of Things, and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. Our end-to-end suite of applications and services enable more than 437,000 business and public customers to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. 

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Keywords: Falk Rieker, SAP, R3, Corda, Accenture, real-time gross settlemen, RTGS platform, payment engine application, fintehc, settlement system, payments , \b2b payments, Corda platform, blockchain
Categories: Banking & Fintech
Countries: Germany
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