A modern alternative to direct debit

Issue 200 | 8 November 2021

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PayTo: A modern (Australian) alternative to direct debit

PayTo can be used for recurring payments, addressing many of the pain points experienced today to deliver improved outcomes for businesses.

PayTo is being developed by NPP Australia and the financial services industry and is planned to commence rolling out from mid 2022.

Power to the People: How Open Banking is Transforming how we Access and Manage our Money

If you’re looking to learn more about open banking and how to apply it within your business to reduce pain and enhance customer experience, then check out The Payments Association’s Open Banking Guidebook ‘Power to the People: How Open Banking is Transforming how we Access and Manage our Money’.

Download a copy here: https://bit.ly/3wjrvJw

The guide brings to life lots of use cases within the space where you can find examples of open banking products and solutions serving consumers, serving SMEs and micro-businesses and sometimes all those in payments value chain. You can also discover the impact that open banking is having in different markets around the world, outlining the position that North America, Latin America, Australia and New Zealand and Asia are taking.

To click or not to click...

Pay by link is growing in use within the financial services industry, as banks and other financial services companies adopt the mechanism in their apps to service growing demands for mobile payments.  But does that make sense when it encourages payers to click on links?

Chaired by former Cabinet Office Cyber Security Lead Phil Cracknell, and titled ‘To click or not to click,’ in this 60-minute roundtable, the floor has been given over the floor to the information security industry. Also invited is Katia Gonzalez of BICS—a notable speaker and knowledge expert on the subject—to offer her perspectives. Panellists will be debating the growing trend of using pay by link solutions in mobile payments apps and what organisations should be thinking about as they battle to keep mobile bill payments safe for payers.

Join an Expert Panel Discussion Sponsored by Answer Pay at 1pm GMT on the 23rd November 2021.

Register now at answerpay.uk/to-click-or-not-to-click-webinar

VRPs and Sweeping

In late July, the CMA mandated the UK’s nine largest banks to implement Variable Recurring Payments (VRPs) for sweeping. This means that customers will be entitled to make automatic transfers of money between accounts using open banking-powered services.

Open Banking Excellence have published a piece featuring a conversation with Todd Clyde over at Token.

Here’s the first question Todd covered: What is the significance of the green light for the OBIE to mandate sweeping through VRPs?

The green light for the OBIE to mandate sweeping through Variable Recurring Payments (VRPs) marked a significant milestone for A2A payments. VRPs have the potential to offer a more secure, faster and cost-effective alternative to direct debit and card-on-file payments, which represent a massive slice of overall online payments. Suppose you think about VRPs and sweeping as giving consumers the ability to programme rules for their payments. In that case, VRPs and sweeping could also open up new forms of financial automation for PSPs, banks and merchants.

Looking at sweeping specifically, as the OBIE have rightly highlighted, sweeping can also deliver significant benefits to society. In the UK alone, around 11 million people don’t save regularly or have little savings. Sweeping could help start savings habits by making saving smarter and more effortless. It can also help both consumers and SMEs make their money work harder. I think we can all agree this makes VRPs and sweeping that much more exciting.


New Payments Architecture

Form3 have introduced a new mini-series with UK Finance tackling the upcoming New Payments Architecture and take a deeper dive into ISO20022 with the help of Baringa Partners.

Joss Wilbraham (Enterprise Programme Director, Form3) is joined by Jana Mackintosh​ (Managing Director, Payments & Innovation UK Finance) & Ben Matthews (Partner, Baringa).

Listen here: https://lnkd.in/dvx6JJPU

Open Banking Future Entity

The UK's Competition and Markets Authority (CMA) has released an update regarding the Future Entity for the Open Banking Implementation Entity (OBIE).

The CMA will provide a more detailed update late 2021 / early 2022 - key points:

  • Purpose: The CMA believes Open Banking Ltd should be kept intact because it is important that it delivers on its full potential as a key driver of competition in retail banking.

  • Regulatory collaboration and oversight: Future oversight could be shared with the FCA and the PSR, both playing a key role alongside the CMA.

  • Stakeholder interests: The Future Entity must sufficiently and fairly represent and take account of all relevant industry participants and end-users, including consumer and smaller business interests.

  • Leadership: The Board of the Future Entity must be independent and accountable and this should be reflected in the roles and composition of the Board.

  • Governance: The Future Entity must adhere to high standards of corporate governance and transparency

  • Reporting: The Board of the Future Entity should provide regular and transparent reporting to regulators

  • Monitoring: There is a continuing need for rigorous ongoing monitoring of Open Banking standards and compliance with the ongoing obligations under the CMA Order.

  • Funding: The CMA supports the design and implementation of a more broadly-based and sustainable funding model, particularly in respect of ‘membership’ contributions. They acknowledge that there are different funding models available for example this could entail securing financial contributions from TPPs, enabling commercial revenues for Directory Services, and potentially even a sector-wide levy.

  • Transition: Robust arrangements must be in place to protect the future of Open Banking before the transition from the current OBIE to the Future Entity can take place and this is an important consideration for the current Board of OBIE.

More: Open Banking Future Entity

Cash Locator

LINK have made a very small but significant change to the LINK Scheme website. The map which helps you find cash access is no longer the ATM Locator, it's now the "Cash Locator".

The change is because Cashback at the Till may be coming to you area soon - a new way of accessing #cash at certain retailers. It's a great new service to support LINK’s mission of protecting cash access across the country, and thinking creatively about how to do that. LINK state that ATMs will remain the main way people access cash, but for some communities this will be a massive benefit.

More: Cash Locator.

PSR issues new access to cash directive to Link

LINK’s mission to ensure free and easy access to cash as the UK's primary cash machine network operator will remain under the purview of the Payment Systems Regulator, following a positive review of its performance by the watchdog.

The new ruling, which requires Link to have in place policies, measures and reporting obligations to ensure the maintenance of a broad geographic coverage of free-to-use ATMs in the UK, replaces a previous Direction which expires in January.

Over five million people in the UK still rely on cash, which is under pressure from the rise of contactless payments card and the steady withdrawal of banks and cash machines from towns and cities.

The PSR says:

Our priority...is to support the ATM network and ensure that UK’s cash system remains sustainable, resilient and accessible to those who need it.

As well as supporting free access to cash, the watchdog wants LINK to consider ways to improve the resilience of ATM replacement procedures and transparency in its commissioning of new machines. Any changes to its policies and procedures must be notified to the PSR, which will retain the power to raise objections.

The draft directive is out for consultation, with feedback requested by 16 November.

More: PSR issues new access to cash directive to Link

In brief


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