Insights

The recent approval by the European Parliament of new regulations on instant payments marks a new turning point in the payments landscape within the European Union.

Andrea Saracini, Head of IT Payments - BCC Sistemi Informatici Gruppo ICCREA, and Odisseo di Michele, Business Development Manager of TAS, discuss about the impact of the new instant payment regulations, highlighting the implications for both Corporate and Retail banking customers.

Andrea Saracini emphasizes the importance of cost equalization between ordinary and instant payments and the need to ensure security through consistency checks and behavioral analysis. The use of the cloud is explored to ensure efficiency and scalability of infrastructures, and a future is outlined in which the digital euro will represent a natural evolution towards fully instant payments.

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TAS is assisting banks in analyzing the necessary steps to comply with the upcoming implementation of instant payments, set for 2025. The focus is on managing higher transaction volumes instantaneously and the need to enhance anti-fraud measures.

More data to analyze in real-time and new security measures to implement are the two main concerns for the financial sector, grappling with the recent directive on instant payments. "Instant payment is a service that allows the payer to execute a transaction that is immediately credited to the beneficiary's account," says Odisseo Di Michele, Business Development Manager at TAS. "With the new regulation that came into effect a few months ago, instant payments are now treated like regular transfers, with settlement on the next business day, now instant. This service must be available across all channels where customers typically place payment orders, applying the same price to both types of transfers."

The Surge in Instant Transfer Volumes

Given equal fees, consumers might favor instant transfers, leading to a surge in transaction volumes to be managed. "In 2023, an average of 25 to 30 million SCT payments were processed daily in the euro area, with a daily settlement of 80 to 100 billion," Di Michele notes. "Currently, instant payments average a couple of million transactions per day, with a value of a few million. The increase in instant payments could reach peaks requiring significant infrastructure upgrades, and using the cloud might be the right approach."

Handling Corporate Payments

Instant processing won't be limited to retail transactions but will also include corporate transactions. "The corporate segment will also be assured instant transfers at the same price, and payments will need to be processed as soon as they are received. This will change the banks' payment management paradigm," says Di Michele. "Today, corporate flows are received and processed in the evening; tomorrow, banks will need to split payment orders and see if there are instant payments to execute immediately."

Verifying the IBAN-Beneficiary Match

The new requirements impact not only transaction volumes but also security levels, which must be raised without compromising the instant nature of these payments. "The regulation introduces mandatory and free verification of the match between the IBAN and the beneficiary's name (first and last name, legal entity, or VAT number). This aspect represents the most challenging change," highlights Di Michele. "The check must be performed by the beneficiary's bank, requiring instant communication between the ordering and beneficiary banks, operational across the euro area. Technically, this is not easy to implement."

Bank and Payer Responsibilities in Instant Payments

If the IBAN check matches, the payment proceeds instantly. Otherwise, the process becomes more complex. "The bank must ask the payer if they want to proceed despite the mismatch. Without verification, in case of fraud, the bank must refund the amount," Di Michele explains. "To combat fraud, it is necessary to leverage AI to study suspicious behavioral patterns and enhance financial education to make users aware of the risks."

The Adaptation Timeline

By January 2025, banks that do not yet offer the service must be ready to ensure the receipt of instant payments and activate additional controls on financial restrictions to limit AML and fraud cases, as well as adjust pricing. "By October next year, it will be mandatory to offer instant payments among the transfer types on all touchpoints, along with verifying the IBAN-beneficiary match, which will extend to EMIs and payment institutions by 2027," concludes Di Michele. "We are currently supporting banks in the analysis phase, focusing on application adjustments. We see good opportunities to offer a high level of service through a cloud infrastructure, integrating the needed services and optimizing payment processes to comply with the new requirements."

Source: AziendaBanca "Dati e antifrode: i due driver per adeguarsi ai pagamenti instant."

English version of the article by TAS.

TAS announced the full operation of its services as a new Application Center in Italy.

The request by TAS to operate within the SITRAD (System for Telematic Data Transmission) as a standardized Application Center was approved by the CIPA Steering Committee on 24 May 2022.

From the following 1st July, TAS (in collaboration with Nexi Payments) began to provide a wide range of services related to domestic interbank applications through SITRAD, including Interbank Commercial Collections, Check Image Truncation and other fundamental interbank procedures such as Archive Alignment and Transferability, Portfolio Provisions, Transfers between Banks, Free Messages, Documented Operations and Interbank Charges Detection.

Starting from September 2023, TAS (in collaboration with Nexi Payments) has successfully activated the first banking group, Banco BPM, for the Check Image Truncation application, followed in April 2024 by the Crédit Agricole Italia group for the same application, while Banco BPM completed the activation of all services in the same month.

With the full commencement of operations as an Application Centre, TAS continues to demonstrate its commitment to providing cutting-edge solutions in the payments and financial services sector in Italy and beyond.

PierLuigi Bellinazzi, TAS Domestic ACH Manager, comments on this significant achievement: "Since the first days of my work at TAS way back in 1998, I have cultivated the ambition of seeing the company evolve into a Service Centre. Today I am therefore very proud, together with all our colleagues at TAS, to have become part of the small group of Italian Application Centers (Nexi Payments, BCC Sistemi Informatici, equensWorldLine and BANCOMAT). Thanks to our new status as an Application Center, we will be able to offer even more complete and attractive for services for Financial Institutions looking for solid and reliable partnerships in the field of financial operations."

The revolution of Financial Transfers across borders continues for an increasingly digitalized, fair, and efficient Europe.

The recent approval by the European Parliament of new regulations on instant payments marks a new turning point in the payments landscape within the European Union.

The recent provisions, which will come into effect 20 days after publication in the Official Journal of the EU, aim to ensure the promptness of money transfers between consumers' and businesses' accounts, representing a significant step towards greater financial efficiency and security.

With the new rules, all payment service providers must offer customers the possibility to make instant transfers that take no longer than ten seconds from approval, at any time and day. This will result in almost immediate liquidity for individuals and businesses, promising to significantly improve the daily operations of millions of Europeans. Additionally, the costs of instant payments must not exceed those of regular transfers.

The new regulation also outlines an efficient process for handling multiple orders of instant fund transfers sent in bundles to Payment Service Providers (PSPs), with particular attention to businesses in business-to-business (B2B) payments. When a Payment Service User (PSU) sends a package of instant fund transfer orders, the receiving PSP must immediately split the package, turning each order into individual transactions of instant credit transfer.

Furthermore, currently, payment and electronic money institutions are excluded from the definition of "entity" in Directive 98/26/EC, limiting their participation in instant euro transfers. The regulation aims to include them, allowing them to participate in Payment Systems and contribute to the adoption of instant fund transfers.

Another significant aspect of the regulation is the applicability of the new rules even in member countries that do not use the euro as the official currency, provided their bank accounts support regular euro transactions. This will ensure widespread sharing of the benefits of instant payments, further promoting economic integration among EU countries.

The new regulation emphasizes the importance of anti-fraud measures, requiring payment service providers to implement advanced fraud prevention systems and offering consumers tools to limit risks, such as the ability to set a maximum amount for instant transfers.

One of the main novelties is also the obligation for payment service providers to verify the correspondence of beneficiary names and IBANs for all transactions.

Additionally, the regulation ensures universal access to instant euro fund transfers for all Payment Service Users (PSUs). It states that there should be no disparities in the channels used to initiate instant payments compared to other types of fund transfers.

TAS's solution for Instant Payments fully covers compliance with the new regulation, with the possibility of adopting the platform modularly and as a service.

Thanks to ur long-standing relationships with most Italian banks, TAS has become a leader in Instant Payments solutions in Italy and has in-depth market knowledge and a unique ability to meet the needs of financial institutions in the product adoption journey.

With its expansion across Europe, TAS is well-positioned to drive innovation in the instant payments sector, offering a comprehensive, modular, and innovative solution that meets the needs of Italian and European banks.

Our commitment is indeed to be a true partner for banks, working closely with them to understand and meet their specific needs.

The modularity of the solution allows banks to choose only the necessary components and design a tailored architecture based on their specific requirements. Additionally, our solutions are based on a modern architecture designed to ensure complete service continuity, with real-time operations 24 hours a day.

Our offering model is based on a very flexible approach and can be implemented in the cloud, on-premises, or in SaaS mode, allowing for rapid and effective time to market.

Key features of TAS solution:

• Full compliance with SEPA Inst protocol requirements: complete processing time <10 sec., Timeout management.
• Cloud-native platform: for a turnkey offering with real-time 24 × 7 operations.
• Omni-channel: corporate portal, retail banking, back-office, etc.
• API interfaces: for payment initiation, reachability, and message requests.
• Message enhancement: message data enrichment through integration with core banking.
• Message screening: message verification through integration with screening systems (e.g., AML, Fraud, etc.).
• Message pairing and r-messages: Pairing of related messages and management of r-messages.
• "Four Eyes" principle: workflow can be defined with multilevel approval processes wherever necessary.
• Error alert: notifications can be sent in case of errors.
• Scalability and fault tolerance: the solution ensures full vertical and horizontal scalability.
• Certified full SWIFT message interface: the message network interface is a fully certified SWIFT application.

Contact our experts to find out how TAS can support you in implementing fast, effective, secure, and fully compliant solutions with the new regulations.

We continue to invest in innovation within the payment sector by introducing advanced artificial intelligence (AI) solutions aimed at significantly improving efficiency, security, and overall user experience.

Now available on our website is an intelligent chatbot named LIA, designed to respond to user inquiries quickly and efficiently. This is just one example of our innovation journey focused on two main areas: integrating advanced AI-based features into our products and optimizing internal processes through the effective implementation of AI.

Enhanced Security with "Fraud Protect"
Security in payment systems is an absolute necessity, especially in the digital context that poses continuous challenges and threats. "Fraud Protect," our fraud management solution, now incorporates advanced AI technologies to identify suspicious transaction patterns, significantly enhancing fraud prevention and anti-terrorism security. Additionally, the introduction of the intelligent chatbot "IVIC," which engages with users in potential risk situations, improves customer experience and helps reduce false positives.

Optimized Transaction Processing and Reconciliation
AI plays a crucial role in automating transaction processing and reconciliation processes. By reducing manual errors, we increase operational efficiency, ensuring greater accuracy in transactions. Predictive analysis plays a fundamental role in managing transaction peaks, allocating resources more efficiently. TAS's Banking Treasury product is evolving to implement AI-based predictive treasury models, capable of predicting liquidity needs in real-time, even on an intraday basis.

Global Impact of Artificial Intelligence in Payment Systems
We believe that the use of AI in the production process of payment systems has become essential and capable of influencing productivity, quality, and product innovation. From transaction processing to project management to customer support, AI is transforming every aspect of the process, opening new horizons in an ever-evolving industry. That's why we continuously invest in integrating new AI-based technologies into our products to stay ahead and ensure increasingly effective and secure payment solutions.

Milan, November 10^th, 2023 — TAS S.p.A., a leading company in Italy providing software and services for banking and financial applications, leading the eponymous group also present in Europe and America (the "TAS Group"), is pleased to announce the acquisition of 100% of the shares of Newsoft, headquartered in Lecce. This marks a significant step towards expanding TAS services and promoting innovation in Southern Italy.

Founded in 2004 by Prof. Rocco Solida, Newsoft is active in various sectors, including software production, research into new information management techniques, design and implementation of information systems, feasibility studies, industrial automation and robotics, personnel training and development, control and management system development, IT consulting, and data processing services.

Both companies express great satisfaction with this operation. "This acquisition provides us with the opportunity to broaden our scope and bring our expertise into new markets," declares Fabio Bravi, Head of M&A, Special Projects, and Corporate Developments at TAS. "We recognize the value and talent in Newsoft and commit to maintaining and further developing the legacy of innovation and technological expertise of Prof. Rocco Solida. The goal of this operation is to consolidate and strengthen TAS's presence in the Capital Markets and promote technological development in new areas. We are excited to work together with the Newsoft team and deliver cutting-edge solutions to our clients."

"We are pleased that the legacy of an excellent company like Newsoft is passing to a valuable group like TAS. We are confident that this synergy of expertise will maintain the spirit of innovation that has always characterized our company and will be able to bring additional development and expansion in a region with great potential like Southern Italy," comment Stefania Solida and Alessandra Solida, daughters of the founder of Newsoft.

The TAS Group received financial advisory assistance from KPMG and legal and labor assistance from Lexia Avvocati in this operation.

Newsoft received legal assistance from Attorney Luigi Colombo of Orrick and financial assistance from Lucciola & Partners in this operation.

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Milan, November 2^nd, 2023 - TAS SpA (hereinafter "TAS"), a leading company in the supply of software and services for banking and financial applications in Europe, is pleased to announce the appointment of Fabio Benasso as Chairman of the Group following a meeting of the Board of Directors held today.

Fabio Benasso began his career at Accenture in 1984 after graduating in Business and Economics from the University of Pavia. From 2006 to 2021, he served as the CEO of Accenture Italy and Geographic Unit Senior Managing Director for the IGEM Region, as well as a member of the Global Leadership Council of Accenture International BV. From 2013 to 2023, he was the Chairman of Accenture Italy, and from September 2021 to the end of August 2023, he served as Advisor to the Chair and CEO and a member of the Executive Committee of Accenture International BV.

He also held the position of CEO for Expo and CEO for Milan Post Expo, in addition to serving as Vice Chairman with Delegation for Simplification at Assolombarda Confindustria Milano Monza e Brianza. Until his departure from Accenture S.p.A., he was a member of the Board of Directors and the General Council. He held the position of a member of the General Council of Confindustria, was a member of the Board of Directors and the General Council of the Confindustria Digital Federation, and a member of the General Council of Anitec-Assinform. He was a member of the Board of Directors of the American Chamber of Commerce in Italy and served as Vice Chairman from 2018 to 2021. In 2014, he assumed the chair of the Sustainability Committee. Since the end of March 2022, he has been the Scientific Director of the LGH Foundation of the a2a Group. He has been the Chairman of FIA - Italian Accenture Foundation since March 2023.

Valentino Bravi, CEO of TAS, stated: "We are thrilled to welcome Fabio Benasso as the new Chairman of the TAS Board of Directors. His extraordinary managerial experience, gained in companies of great significance in both the Italian and international landscapes, makes him a key figure in guiding the TAS Group towards a future of innovation, technological leadership, and sustainability, all of which are areas we have been investing in during these years."

Giuseppe Franze, a member of the TAS Board of Directors and Partner of the Rivean Capital fund, said: "On behalf of the Board of Directors, I would like to welcome Fabio Benasso. Fabio has been a pioneer in the Italian ICT field, a partner at Accenture since 1996, and has taken it from a few thousand employees to one of the leading players in the Italian market with over 25,000 employees in Italy. Fabio's appointment is part of the broader growth path of the TAS Group, bringing expertise, vision, and leadership thanks to his extraordinary experience. With his entry, Rivean reaffirms its commitment to accelerating the development of TAS."

Fabio Benasso, Chairman of TAS, commented: "I am very pleased to take on this role at TAS and will leverage the experience I have gained over the years. I believe in the need to invest in technology and people, and to work towards a sustainable economy. In TAS, I see an environment where I can act in this direction, and I am happy to contribute to the development of projects in a critical and ever-evolving sector like payments, bringing growth and innovation to both the company and the country."

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Milan, September, 2023 - We are proud to be among the Top 100 in the IDC FinTech Rankings for the 15th consecutive year, as a global provider of innovative solutions in card management, digital payments, financial messaging and capital markets.

The IDC FinTech Rankings evaluates and categorizes the top IT vendors based on 2022 calendar year revenues and the percentage of revenues exclusively attributed to financial institutions, including banks, capital markets firms, and insurers or directly to fintech solution providers for hardware, software, and/or services.

The card issuing industry continues to evolve and adapt to changing consumer needs, technological advancements, and regulatory developments. Innovations such as digital wallets, virtual cards, and biometric authentication are reshaping the landscape of payment solutions. Card issuers are embracing these developments to enhance security, improve convenience, and deliver seamless user experiences. The future of card issuing holds in fact the promise of even more flexible, secure, and personalized payment options for consumers worldwide.

By understanding the significance and intricacies of card issuing, we would like to give a deeper appreciation for the convenience and opportunities that payment cards provide in our everyday lives. Whether it's debit cards, credit cards, or prepaid cards, these little plastic rectangles enable us to make purchases, access funds, and enjoy a myriad of financial services. Behind the scenes, a complex process known as card issuing takes place and, in this article, we'll demystify card issuing, shed light on its significance, and explore the key steps involved.

What is Card Issuing?

Card issuing refers to the process of creating and distributing payment cards to consumers, allowing them to access financial services and make transactions. The issuing entity, typically a bank or financial institution, produces and provides these cards to customers. Card issuing involves a series of steps, from application and approval to card production, personalization, and delivery. The ultimate goal is to provide users with a secure and convenient payment method that aligns with their financial needs.

The Significance of Card Issuing

Card issuing plays a pivotal role in the modern financial ecosystem, facilitating economic transactions and empowering individuals with greater financial flexibility. There are a few key reasons why card issuing is significant:

Payment Convenience: Cards offer unparalleled convenience, allowing users to make purchases both in-store and online, eliminating the need for carrying cash. With the rise of contactless payment technology, cards have become even more convenient, enabling swift and secure transactions with just a tap or wave.

Financial Inclusion: Card issuing promotes financial inclusion by providing individuals with access to banking and payment services, even if they don't have a traditional bank account. Prepaid cards, for example, can be a viable solution for the unbanked and underbanked populations, enabling them to manage their finances, receive payments, and participate in the digital economy.

Security and Fraud Protection: Card issuers prioritize security, implementing various measures to protect users from fraud and unauthorized transactions. Features such as EMV chips, PIN verification, and tokenization enhance security and reduce the risk of card-related fraud. Additionally, card issuers often offer liability protection to shield customers from unauthorized charges.

Consumer Benefits: Card issuing entities frequently offer a range of benefits and rewards to attract and retain customers. These may include cashback programs, travel rewards, purchase protection, extended warranties, and access to exclusive events. Such perks enhance the overall value proposition of cards and incentivize card usage.

The Card Issuing Process

Now, let's delve into the key steps involved in the card issuing process:

Application and Approval: Individuals apply for a payment card, typically through a bank or financial institution. The issuer evaluates the application based on the applicant's creditworthiness, income, and other relevant factors. Upon approval, the process moves forward.

Card Production: Once approved, the issuer proceeds with card production. Modern payment cards are made of durable plastic and can be embossed or printed with the cardholder's name and other essential details.

Personalization: To enhance security and customization, the card is personalized by encoding a unique magnetic stripe or embedding a chip. This allows the card to be associated with the user's specific account and enables secure authentication during transactions.

Activation: Before the card can be used, it needs to be activated. This can be done through various channels, such as online activation portals, automated phone systems, or by contacting the issuer's customer service.

Distribution: Once activated, the card is delivered to the cardholder. It can be sent by mail to the registered address or made available for pickup at a designated branch. The issuer ensures that appropriate measures are taken to safeguard the card during transit.

Usage and Management: Cardholders can now use their cards to make purchases, access funds, and enjoy the associated benefits. The issuer manages the cardholder's account, tracks transactions, sends periodic statements, and handles any customer service inquiries or issues.

As already anticipated, the card issuing industry continues to evolve and adapt to changing consumer needs, technological advancements, and regulatory developments. Besides the presence of plastic cards there are some notable trends and developments that the card issuing industry is already facing:

Digital Wallet Integration: Card issuers are increasingly integrating their payment cards into digital wallet platforms such as Apple Pay, Google Pay, and Samsung Pay. This allows users to add their cards to these mobile wallets for convenient and secure mobile and contactless payments.

Contactless Payments: The adoption of contactless payments has been on the rise, driven by the need for quick and hygienic transactions. Card issuers are issuing contactless-enabled cards with near field communication (NFC) technology, enabling users to make payments by simply tapping their cards on compatible payment terminals.

Virtual Cards: Virtual cards, which are card details issued without a physical card, have gained popularity. These cards are typically used for online or mobile transactions, providing added security and convenience. Virtual cards can be generated instantly, allowing users to make purchases without waiting for a physical card to arrive.

Open Banking and API Integration: With the emergence of open banking initiatives and application programming interfaces (APIs), card issuers are collaborating with third-party fintech companies to provide innovative financial services and experiences. This allows for seamless integration of card services with various applications, enabling users to manage their finances more effectively.

Rise of Prepaid Cards: Prepaid cards, which are loaded with funds in advance, are gaining popularity due to their flexibility and accessibility. They offer a viable payment solution for the unbanked and underbanked populations, as well as for budgeting and travel purposes.

TAS Card Issuing Platform: build a personalized card program

A modern card issuing platform is one that enables individuals to access financial services, make transactions, and participate in the digital economy. These trends reflect the ongoing efforts of TAS in the card issuing industry to enhance security, convenience, and customization while adapting to changing consumer preferences and the evolving digital landscape.

To meet the evolving needs of its clients, the TAS Card Issuing Platform encompasses a range of features and capabilities that are key factors to build a truly personalized card program.

This modern platform has strong card personalization capabilities allowing issuers to customize their card programs in terms of set up, basic data and personal information associated with cardholders, type of cards, hierarchies, limits, fees, rates etc. Thanks to these high configurability features, each card program is unique and aligned with the issuer's business needs and strategy.

Besides personalization, one of the major concerns of TAS clients is security. For this reason, TAS has continually invested in security measures to protect its clientsagainst fraud and unauthorized transactions. Through sophisticated algorithms, the card issuing platform monitors, investigates and report transactions of a suspicious or unusual nature to ensure reliability 24/7.

Some of the greatest innovations the TAS platform brings to its clients is the ability to issue physical, virtual, and tokenized cards which can be added to the cardholders digital wallets and make mobile and contactless payments using their smartphones or other digital devices. Furthermore, the platform supports additional security measures such as encryption, multi-factor authentication, and risk management tools to mitigate risks associated with card-based transactions.

To guarantee an even more flexible, secure, and personalized payments, here are some of the key features the TAS card issuing platform supports:

Open API: to facilitate integration with third-party applications and services to guarantee seamless connectivity and collaboration with other fintech solutions.

Real-time Transaction Monitoring: the platform offers real-time transaction monitoring capabilities, providing issuers with visibility into cardholder transactions, including spending patterns, geolocation, and suspicious activities.

Card Management and Lifecycle Services: this includes functionalities such as card activation, deactivation, blocking, reissuance, and replacement.

Analytics and Insights: this allows issuers to gain valuable insights into cardholder behaviour, spending patterns, and trends. Data-driven insights enable issuers to make informed decisions, optimize card programs, and enhance customer experiences.

Scalability and Flexibility: it supports the growth and expansion of card programs, accommodating varying card types, multiple currencies, and evolving business requirements. The TAS Card Issuing Platform can handle increasing transaction volumes and adapt to changing market dynamics.

These key features empower card issuers to deliver secure, innovative, and personalized payment solutions to their customers. By leveraging the modern TAS card issuing platform, issuers can streamline their operations, enhance cardholder experiences, and stay competitive in the rapidly evolving payment landscape.

To discover more, contact our experts and request a free demo.