Payments projects get written about in terms of platforms and dates. Working for the last nine months on such a project in the Western Balkans, that’s not what I’ll remember from it though. I remember people at the banks working late to hit a deadline few outside the industry will hear about, and the fact that a shopkeeper in Montenegro can now be paid in ten seconds on a Sunday because they did.
It all starts with what changes for the person holding the money. Someone sending money to family across town sees it arrive before they’ve put their phone away. Wages, rent, a supplier invoice, money between relatives, all of it settling in seconds at any hour, weekends included. When money is tight, getting paid on Friday night instead of Monday can be the difference between paying a bill on time and paying it late.
And cost matters as much as speed. Card networks take a cut of every transaction, and for a small merchant those fees add up to real money over a year which ends up in the price the customer pays. Traditional bank transfers often carry a charge too, enough that people think twice before making a small one. When moving money is cheap, people stop reaching for cash to dodge them and small amounts start to move on payment rails that never would have before.
Because the bigger shift underneath that is indeed cash. A lot of daily life in these economies still runs on banknotes, and cash is not free. It gets lost and stolen. It has to be counted, guarded, moved, banked. It leaves no record, which shuts people out of credit they might otherwise qualify for and keeps a large part of the economy invisible to the institutions meant to serve it. An instant transfer that is quick, cheap and works on a basic phone gives people a reason to leave the cash behind that has nothing to do with being told to. It’s simply better. Every payment that moves from an envelope of notes to an instant transfer is a small step out of the informal economy and into a system where a person has eventually access to more than just payments.
We worked with the Central Bank of Montenegro on their TIPS Clone deployment, on the platform Banca d’Italia operates. All eleven banks in the country came onto it and it went live. Putting eleven institutions of different sizes onto one shared platform on one timeline is mostly a coordination job, and the central bank kept the schedule firm while giving the banks room and support to make it. We’re helping in Kosovo as well, where the market is preparing to go live in a few months.
But keep in mind that the go-live is one day and the work behind it is months. Integration teams testing message flows again and again. Operations people writing procedures for cases that come up twice a year. Compliance reading the same article of the regulation for the tenth time to be sure. Project managers holding it together on top of their normal jobs. Most of these people weren’t told they were building financial inclusion. They were told to hit a date, and they did, because they’re good at their jobs. The central banks carried the other half, taking pressure from every side and keeping a whole market pointed the same way. Many of the hard calls don’t show up in the announcement. Where to set the transaction limit, for one: too low and the system is useless on day one, too high and you’re carrying risk the market can’t hold yet, and someone has to do the benchmarking to find the number.
It’s worth spending a bit of time on how hard that coordination is. A market goes live all at once or it doesn’t really go live. A payment system where only some of the banks have joined is hard to rely on, because you can’t be sure the person you’re paying can receive. So every bank has to be ready on the same day, and each arrives at that day from a different place. A large bank with a modern core system and a big project team sits alongside a small one with older technology and a few people already stretched. They have different budgets, different priorities, different appetites for the risk of going first. Left alone, each would pick its own pace. Getting them to the same line on the same date takes someone with the authority to hold it and the judgement to know when to push and when to support. That someone is the central bank.
And let’s not forget that instant payments is also the layer everything else stands on. On its own it moves money fast. But it also makes the next set of services possible, the ones that turn a fast transfer into something people actually reach for instead of cash. Verification of payee, so you know the money is going where you think before you send it. Proxy and alias, so you can pay to a phone number in your contact list instead of copying an IBAN. Request to Pay, so instead of sending a bill and waiting, you send a request the other person approves with a tap. QR codes, so the smallest merchant, a market stall, a taxi, a farmer, can take a digital payment with nothing more than a printed code. Each of these overlay services chips away further at the reasons people still prefer cash, and none of them work without fast reliable settlement underneath.
By transposing the EU regulation closely and building on the same platform Europe runs, these countries haven’t only modernised their own systems. They’ve made themselves ready to connect to the European payments area. For economies that see their future with the EU, that is not a technical detail. I went into this thinking about regulation, coordination of a community, and payment system architecture, and came out thinking mostly about people. The rails are there. The overlay services that sit on them, and the cash they’ll displace, are the part I’m looking forward to.
