The systemic importance of high-value payments to banks’ operations and offering – and, by extension, the global economy – means they are almost always a key priority when exploring a new payments product or initiative.
So, what are the specific considerations and challenges that high-value payments present? And what capabilities must payments processing solutions possess to ensure secure and seamless transactions?
At its core, a high-value payment is exactly what it says on the tin: A transaction involving a large amount of money. But it’s not just the dollar figure that matters. With higher value come higher stakes. If something goes wrong, the consequences can be huge for the bank, the businesses involved, and wider economic participants.
Consequently, banks must take a different approach to processing high-value transactions. Much like a priceless painting is handled with far more care when moved compared with an average package, additional processes and controls are put in place:
Given these additional requirements, when building or choosing a payments processing platform for handling high-value payments, banks might wonder: Does it require a completely different system?
Surprisingly, not always. For example, processing a domestic RTGS payment is not that different from processing a fast, no-limit payment (except for the extra checks and possible manual steps for the RTGS transaction).
When it comes to cross-border high-value payments, however, things do get complex and the way the payment is cleared and settled becomes critically important.
Consider a traditional SWIFT payment. The processing solution needs to support all the right reference data for routing the transaction, plus functionality for matching transactions and reconciling accounts. And when dealing with digital currencies and distributed ledgers, integration with the platforms that issue digital currencies, ones that distribute these and customer digital currency wallets becomes essential.
As such, a payments processing solution is required that is agnostic of the clearing and settlement mechanism, one that can be integrated with existing RTGS and CBPR+ rails used in production today but can also easily integrate with newer payments rails that may become more prevalent in future years.
While these specific considerations for supporting high-value payments must be addressed, it is important that banks do not fall into the trap of thinking in silos. Historically, individual processing flows and solutions have been built for different types of payments. But in today’s fast-moving payments world, we are seeing increasing convergence due to advances across the underlying market infrastructure.
This means that looking ahead, the real differentiator for banks is not just in supporting high-value payments – it’s about offering a seamless, secure, and adaptable experience for every kind of transaction. No matter what kind of payment, or whether it is millions or just a few bucks, the right platform should make it seem effortless.
But enabling this experience cannot be achieved through complex and fragmented legacy systems. It demands a single, modern solution that:
While modern payments processing solutions can bolster banks’ capability to enable secure and seamless high-value payments, the benefits extend much further across the organisation. As the ecosystem has evolved, there is now a clear and compelling opportunity to sustainably and progressively move towards a single, consolidated payments infrastructure that supports any payment, anytime, anywhere. This promises to enhance service quality, promote innovation and bolster resiliency, as well as significantly reducing costs.
At Icon, we are committed to enabling this sustainable approach to payments transformation. We used our extensive experience designing and implementing state-of-the art payments systems to pioneer the Icon Payment Framework (IPF).
IPF is an internationally proven payments development framework trusted by an ever-growing list of Tier 1 banks across the globe to build their high-value, real-time and batch-based payments processing solutions. It gives banks the technology and processes to independently accelerate the transformation of their payments infrastructure, allowing them to build, test and deploy payments processing solutions much faster, while staying in total control of timelines and costs.
Want to learn more? Meet us at the Payments Canada Summit to discuss how we can support your payments modernisation journey.