Demystifying programmable money: How the next generation of payment solutions can be built with existing infrastructure

Abstract

As the conversation around programmable money has developed, many have argued that digital currencies built on distributed ledger technology — and the secure, automated, 24/7/365 and realtime environment this provides — are needed to unlock the solution. This paper, however, proposes an alternative way forward. Pointing to the various innovations developed and launched by the payments industry over the last decade, this paper argues that rather than waiting for digital currencies to reach maturity, it makes more sense to explore how existing payments tools can be used to create programmable money. Indeed, the paper suggests that by leveraging such recently delivered building blocks as instant payments, open-banking application programming interfaces and request to pay, the industry can create programmable money already — with the added benefit of faster time to market. Specifically, the paper contends that request to pay, and the underlying four-corner model that creates a level playing field for solution providers, is the best means to drive forward the programmable money journey.