The payments landscape continues to evolve and this blog shares some of the topics that caught my attention during the last month. If you think I’ve missed anything important, do As please send an email to technical@treasurers.com.
Bank of England CHAPS replacement
The Bank of England will upgrade its CHAPS high value payment system in a process that started in February 2019. The RTGS Renewal Programme is being delivered in multiple transition states to minimise risk and is expected to run until 2025.
On 30 July 2020 the Bank announced it had selected Accenture to be its technology delivery partner.
More details on the renewal programme can be found here.
Confirmation of Payee (CoP)
CoP is a way of giving end-users of payment systems greater assurance that they are sending their payments to the intended recipient. It is an ‘account name checking service’ that can help avoid payments being accidentally misdirected.
The Payment Systems Regulator set 31 March as the deadline for implementation for the 9 largest banks in the UK representing around 90% of bank transfers.
Pay.uk recently announced that CoP requests had exceeded 1 million per day.
Open Banking
Following the issue of the final roadmap by the Competition and Markets Authority (CMA) in the UK in May, UK Finance in conjunction with Accenture issued a report. The report outlined the following five recommendations for a proposed model to support the future provision of Open Banking Services following the closure of the Implementation Roadmap:
WhatsApp Pay in Brazil
WhatsApp Pay is an in-app payment system allowing users to send money securely within a digital wallet. At the beginning of the year, Facebook announced plans to undergo testing in India, Indonesia, Mexico and Brazil.
As the second largest market for the messaging service, it was no surprise when Facebook announced the launch of its payment service in Brazil in June. However, a few weeks later the regulator suspended services citing concerns over competition. By partnering with the largest card acquirer (with a reputed 41% market share) there were worries that an estimated increase in market share by 10% could create a dominant monopoly – against the interests of consumers.
Instant Payments from the US Federal Reserve
The Federal Reserve announced details of its new interbank settlement service with clearing functionality to support instant payments in the United States that would be available at all times on all days. The Federal Reserve Register includes more details of the functionality of the FedNow Service which is planned to be launched by 2024.
Threshold for SEPA Instant Credit Transfers rises
The European Payments Council announced that the ceiling on instant transfers had been increased from €15,000 to €100,000. This makes the service more useful for many business users.
Mastercard continues to invest in Open Banking
Mastercard announced the acquisition of Finicity – a company providing real-time financial data and insights access using open banking tools. The company is a data aggregator which uses next generation application programming interfaces and clear consumer approvals to help financial institutions to streamline loan and mortgage processes and provide rapid account-based payment initiation and personal financial management solutions.
This follows on from the acquisition of Plaid by Visa earlier in the year as both organisations improve their technology infrastructure to enable them to offer more products that take advantage of open banking.
Apple purchases Mobeewave
Mobeewave allows businesses to use their smartphone as a payment terminal and this acquisition extends Apple’s involvement in the payment ecosystem by allowing the iPhone to become a mobile payment terminal. The increasing use of contactless payments (especially during the pandemic) has increased demand for card readers – especially those that do not require an additional physical device.
