The Instant Payment Card: Initiating a SEPA Credit Transfer at the Point of Sale

The Smart Payment Association presents its vision of the European Instant Payment Card in a Position Paper

By initiating instant payments at the POS using a (digital) card, consumers would not only enjoy the fluidity, convenience and familiarity of conventional payments, they’d have more choice in how they pay. Merchants would be able to leverage existing POS infrastructures, while banks would benefit from reach and co-existence with today’s card schemes.

The principle is straightforward. An Instant Payment Card, or digital card in a mobile wallet, would be issued by the bank and used by the consumer at the POS. For the physical card, a contactless interaction could be offered. For mobile wallets, the customer verification method could be handled on the phone, using the supported biometric modalities. In short, in exactly the same way consumers pay today with conventional payments. 

Behind the scenes, under the proposed system, the terminal would connect on-line to a dedicated platform operated by a service provider – which could also serve the role of a PISP as described in PSD2. The PISP would then identifies the bank that issued the card and send, through Open APIs, a payment initiation request. This would be processed by the bank, and a confirmation sent to the PISP and then the customer. 

The (digital) Instant Payment Cards used at the POS would comply with the Strong Customer Authentication mandate described in the RTS, combining the possession factor with a knowledge or inherence factor. The instant payment application could be combined, in a (digital) card, with existing card scheme applications such as conventional contact and contactless payment. This would give consumers the convenience of a single card with multiple ways to pay. 

The Instant Payment Card would not be restricted to proximity payments at the POS. Indeed, the EMV standard provides for a means of authentication of the customer which can be extended to e-commerce use cases. For example, an Instant Payment Card based mobile wallet could be used to authenticate the customer remotely. 

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