Recently in the Fintech industry the concept of Payment Institution is rapidly gaining attention as the main actor in the electronic payments revolution, even if the Payment Institutions are not allowed to make use of electronic currencies.
WHAT DOES PAYMENT INSTITUTION MEAN?
Payment Institution stands for legal subject presenting itself as a new kind of “financial mean”, different from traditional banks, authorised to offer “payment services” in a hybrid way: it can carry out commercial functions and offer other kinds of services.
Payment Institutions – which need to be part of a public registry – are controlled by Banca d’Italia, which publicly lists which payment services will be handled by which institution.
Activities of a payment institution can be divided in:
- deposits on current accounts
- withdrawal from current accounts
- payment operations execution
- payment operations with lines of credit
- acquisition and/or emission of payments methods
- Money remittances
- electronic payments
- collection and custody of data usage/policy
- payment systems management
- payment warranty
- exchange services.
WHAT ARE THE PECULIARITIES OF A PAYMENT INSTITUTION?
A payment institution differentiate itself for its ability to execute payment operations where the payee consent to carry out the transaction can be given through an electronic device and the payment can be executed by an operator of the system or communications network that acts excursively as middleman between the payment services user and the services provider.
WHAT ARE THE BENEFITS OF A PAYMENT INSTITUTION?
Opening a payment institution means to have a direct access to the CBI network and directly acquire data, which can then be exposed to users that possess a current account with internet banking.
WHAT ARE THE POSSIBLE CONNECTIONS WITH THE CORPORATE TREASURY?
Direct access to the CBI data may be able to make financial services extremely easier to scale, which may at the same time change it’s scope: from specialized consultancy service to single companies – aimed to the company financial department – to a precious “control system” of third party finances, which means companies can be financed by an institution that controls credit emission in a “tight” manner.
Opening a payment institution that is hybrid with a financial entity (for example a “factor”) may revolutionise both the payment system between companies as well as the founding options for the supply chain of company groups (reverse factoring on electronic invoices), taking advantage of the ongoing revolution in the electronic invoices between private parties.
Platforms for the electronic invoice management with “return receipts” are already being built.
These certify the compliance of the invoices and their registration in the payee management system, which will then make a “promise of payment” and execute the transfer within the due date.
Interlogica has already built a payment institution to kick-start new processes based on this revolutionary payment system between companies.