We met in London to hear from Tim Yudin of Payments UK as the trade association for payments, and Nick Davies of the Payment Strategy Forum, the forum set up by the UK’s Payments Systems Regulator (PSR) and includes Katherine Horrell FCT, of Centrica. Shaun Kennedy AMCT, of Affinity Water sits on one its End User group. It is to the latter’s draft strategy that the ACT has responded (our response links to the Strategy document).
The strategy follows a year of discussion and analysis to define the shortfalls, the “detriments”, their potential solutions and seeks to prioritise their development.
Long standing concerns over electronic payments have been aired:
These are essentially the two sides of the dilemma of electronic banking: how to ensure the value travels with enough data to update the consumer’s debt.
Add to this the new concept of Request to Pay (RtP): that consumers can be prompted to agree payment and can massage the payment date. This is a substantial difference amongst government and utility services providers who have long benefited from the UK’s significant use of cost- and IT resource-efficient Direct Debit (DD). We are told experience is that Finland’s adoption of RtP was near total. We are also told that RtP would be an option with potential to assist vulnerable consumers to manage their cash. Those with long experience of UK utility regulators and consumers may be hesitant: regulators tend to make the optional mandatory as they seek to maximise the range of payment methods; and we in the UK tend to be more anarchic than our Scandinavian neighbours.
The trend of the strategy is sound. We disagree with the prioritisation. The blended committee output of the strategy puts Assurance before Data whereas we would put the Data horse before the Assurance cart.
But once agreed the strategy’s implementation depends on resource. Tim Yudin tells us the pre-PSR implementation of CASS cost £750m: a big number and an indication of the amount of IT resource required to speed the moving of current accounts. We should be cautious such volumes of resource can be found as the UK digests Brexit, and the City digests MiFID2, and while we struggle with EMIR, KYC, and a myriad of process changes. Perhaps this offers more time for the thinking stage which we anyway recommended, and perhaps the march of Blockchain may yet offer simpler solutions.