The Payments Crossroad: Payment tracking, instant payments and new integrations

The Payments Crossroad: Payment tracking, instant payments and new integrations

Even though, working in the payments industry, we all have an overall understanding of how payments work, many of us still have this unexplainable anxiety when we make a bank payment and have to wait a few days with zero update for its complete execution. This month, we explore the many reasons why you should track your payments in realtime.

Also in this newsletter: the close-to-final timeline for instant payments in Europe, the history and future of the European settlement infrastructure and a lot of new bank integrations and features for Numeral, including Swift payments.


Why we should all track payments in realtime

It’s always a relief when your card payment is confirmed. And your lunch place/coffee shop/grocery store most likely wouldn’t let you leave before the confirmation appears on the card terminal.

Similarly, it always feels good to receive instant confirmation when you send a payment to a friend on Cash App or Revolut — and even more to see the money instantly credited to your account when your friend told you they were paying you.

We expect realtime information about what is going on for every small payment in our life. Isn’t it only fair to expect the same level of information for more critical ones? Whether sending the money to pay for a newly acquired home or receiving a salary or an insurance claim?

This month, we’re talking bank payment tracking.


What is payment tracking?

Before we deep dive, let’s align on a common definition. This newsletter discusses tracking bank payments: SEPA credit transfer, Bacs direct debit, FPS immediate payment…

Payment tracking consists of obtaining information about the payment lifecycle, from its initiation to its final execution — or to the step at which it fails.

For SEPA instant payments, your bank will let you know if a payment succeeded or failed within a few seconds. First, it’s the law. Second, the opposite would somewhat diminish the value of this payment method.

However, a non-instant payment can take up to 2 to 3 business days to be completely executed (i.e. for the money to be credited to the receiving bank account). That’s plenty of time to worry, especially if we’re talking about a house payment.

And that’s when you send or receive payments directly with a bank, and everything goes well.

A payment or electronic money institution (PI or EMI) working with a partner bank will first need to get this data from the bank and process it in its systems before reproducing it to its end customer.

Also, payments can fail at various steps:

  • in the systems of the PI/EMI before even reaching the sending bank
  • at the sending bank
  • at the receiving bank

And for various reasons such as:

  • incorrect information (e.g. wrong receiving account number)
  • payment blocked for fraud or compliance reasons
  • closed receiving account
  • technical issues

For Swift payments, add a couple of days for the payment to complete its lifecycle and a few intermediaries the payment goes through and can fail or be stuck at.

Given all these parameters, we can refine our definition of payment tracking. It consists of knowing:

  • At which step is a payment
  • If a payment has been successfully executed
  • If a payment has failed: know that it has failed, at which step, and why

Ok, that sounds super interesting, but what can I concretely do with this information?


The many reasons why you should track payments

Tracking payments is trendy, so you shouldn’t miss out.

Looking at Stripe’s or Adyen’s documentation, the ability for merchants to track where their payouts are seems to be a common question, which answer is built-in the companies’ platforms.

Cross-border payment companies like?Wise?and?iBanFirst?made payment tracking key capabilities of their products. And, of course,?Swift?offers a dedicated product to track cross-border payments.

More seriously, there are excellent reasons payment companies thoroughly track payments and pass on this information to their customers.


Increase customer trust and support team productivity

As we’ve covered in the introduction, we, as consumers and more and more businesses, are getting more used to receiving realtime tracking information about the payments we make. We are increasingly expecting this kind of experience from any payment product.

When your customers don’t have information on the status of an unusually long payment or detailed information about a failed payment and start to legitimately worry, they will contact your support team to get the information.

It will create an additional load for your support team. The issue compounds if your support team isn’t itself equipped with the tools to retrieve the status of a given payment instantly.

Without proper, automated tracking of payments, customer support teams have to dive deep into various data sources, including internal systems, bank account statements, and payment status reports, to understand the issue. If they don’t have direct access to this data, it will create long, painful and expensive back-and-forths between your customer support, engineering, and finance teams as well as partner banks.

This leads to very long support ticket resolution time when, again, customers expect realtime visibility on a service as critical as payments. In addition to eroding customer trust, it represents a massive loss of time for your support teams.


Resolve recurring incidents faster and prevent them

Knowing a payment is encountering an issue enables you to start solving this specific issue for this particular payment. Knowing dozens of payments encounter the same issue enables you to start investigating the root cause of this issue. Doing so in realtime enables you to take immediate action to prevent further payments from failing. For instance, if they identify that a partner bank's systems are unavailable, they can decide to momentarily reroute payments to another partner bank. Or if multiple payments fail because of incorrect address format or beneficiary IBAN, payment operations teams can work with product teams to enforce the verification of these payment information when filled out by customers before initiating the payment.


Optimise liquidity management

More accurate and realtime payment tracking enables fintech companies to know the funds that will be credited or debited from their accounts before receiving end-of-day account statements.

They can, therefore, manage the balances on their different bank accounts more precisely, for instance, by hour instead of day, and operate with smaller margins.

It frees precious liquidity for fintech companies, enabling them to, for instance, move funds from their settlement account to their interest-bearing safeguarding account faster or make more cash available to extend loans as soon as instalment payments are confirmed for credit companies.


Yes, it is hard to track payments in realtime

Going into your internal payment systems logs and identifying stuck payments is probably relatively easy. Retrieving a given payment status report XML file from one of your banks and identifying a rejected payment with a specific?reason code?is also relatively easy.

The complexity of tracking payments in realtime for payment companies is performing these operations and more automatically, proactively, across many internal systems and banks, and tying the retrieved information to each individual payment to update their status throughout their lifecycles.

While not forgetting about the right interfaces to expose this data internally to your support and operation teams, and externally to your customers.

More on that in this article. And yes, Numeral can help you with payment tracking.



The Crossroad

Stripe’s engineering marvel of a payment tracking system

While at Numeral, we would be more than happy to support Stripe in tracking their payments and more; they didn’t wait for us to do so. In a recent blog, they detail the money movement tracking requirements of a business like Stripe, the constraints they have to deal with over their sophisticated banking and partner infrastructure, the key metrics they’re monitoring and the system they built to do so.

Our favourite quote: “While we aspire to an orderly ideal, at Stripe scale, that’s impossible—instead, we built a system that keeps these imperfections manageable and bounded.” As a company building integrations with dozens of banks, we couldn’t agree more.

Find the article here.


The close-to-final timeline for instant payments in Europe

On February 7, 2024, the European Parliament voted the long-awaited?Text on Instant payments in Euro. This vote gives us a more precise timeline of the application of the different elements of this text. Considering a publication in the Official Journal of the European Union in the next few weeks, here is what to expect based on the timelines mentioned in the text:


December 2024:

  • Banks of EU and Eurozone countries are required to support receiving SEPA instant payment
  • Banks, PIs and EMIs of EU and Eurozone countries can't charge more for SEPA instant payments than regular SEPA payments
  • Banks, PIs and EMIs of all EU countries are required to screen entities and individuals against EU sanction lists at least once a day, as opposed to doing so at each payment previously
  • Banks, PIs and EMIs of all EU countries are required to screen their customer bases immediately after an update of the EU sanction lists

September 2025:

  • Banks of EU and Eurozone countries are required to support sending SEPA instant payments
  • Banks, PIs and EMIs of EU and Eurozone countries are required to support IBAN name verification on all credit transfers

December 2026:

  • Banks of EU non-Eurozone countries are required to support receiving SEPA?instant payments

March 2027:

  • PIs and EMIs of EU and Eurozone countries are required to support sending and receiving SEPA instant payments
  • PIs and EMIs of EU non-Eurozone countries are required to support receiving SEPA instant payments

June 2027

  • Banks, PIs and EMIs of EU non-Eurozone countries are required to support sending SEPA instant payments
  • Banks, PIs and EMIs of EU non-Eurozone countries are required to support IBAN name verification on all credit transfers


The complex user experience of open banking

A group 5 of French open banking companies mandated an independent firm to study the success rate of open banking payment initiation and account information access requests over more than 1 million requests.

The results: 47% of payment initiation requests are rejected due to 84% to the lack of answer from the customer in the required timing.

The study points to the complex user experience a customer has to go through to authorise a payment initiation request on its bank account, a complex user experience resulting from the implementation of reinforced security measures on these requests by the banks.

More in the complete report here.


The history and future of the European settlement infrastructure

While we all follow their publications for the latest tiny signals about interest rates, the European Central Bank also produces excellent content on critical market infrastructures it oversees.

The latest example covers the potential use of distributed ledger technology for settlements in central bank money. Using a distributed ledger for clearing between parties, such a system would enable instant clearing for all transactions (including securities) and, therefore, instant settlement via existing systems.

More here.


Latest news from Numeral

  • More global, more local: we now enable customers to send and receive Swift payments via their partner banks to extend reachability to the 200+ countries not covered by local SEPA, Bacs, FPS, and other local schemes.
  • Our bank coverage keeps expanding throughout Europe. We are happy to announce that our integrations with LHV, Banking Circle, CENTROlink, and Intesa Sanpaolo are now generally available for all customers.
  • While we want to automate as many workflows as possible for our customers, there is no such thing as 100% automated payment operations. So we keep improving our dashboard, so finance and operations teams can manage the rest. Better visibility on liquidity, faster workflows with bulk actions, improved payment file uploads and more improvements?here.
  • When you run payment operations at scale, reconciliations must follow. In?this article, we break down how Numeral automates reconciliations.

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