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Channelling their ‘inner Barbie’

Issue 527 | 12 September 2023

Sep 12, 2023

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Welcome to this week’s new subscribers and a huge thank you to those that recommended Payments:Unpacked to a friend this week - these recommendations are having a huge impact on subscriber numbers!

This week we are pleased to welcome Numeral who are our latest newsletter sponsor.

Today’s Payments:Unpacked is brought to you by Numeral

Numeral is the bank orchestration platform designed for fintechs and financial institutions building advanced payment flows on top of their banking partners.

Click here to learn how to access Bacs, FPS and SEPA and automate your payments with the partner banks of your choice.

Channelling their ‘inner Barbie’

UK Finance has been updating the market on environmental work within the cash industry - here’s a couple of highlights:

Channelling their ‘inner Barbie’ on the theme of “plastic is fantastic” (or not), the Coventry Building Society ran a pilot scheme with its cash handling partner G4S to remove small plastic coin bags from their branch deposits. Following positive feedback, the building society is working to roll this out more widely, with an estimated saving of over a quarter of a million single use plastic sachets each year.
Cash in Transit providers have been using the latest in telematics data to ensure that vehicles are not left idling while collections and deliveries are made. This has already significantly reduced their fuel consumption and the associated level of emissions. Electric vehicles are also being introduced to cover local urban routes and reduce the environmental impact of cash even further.
Barclays have reduced their use of paper by over 60 per cent since 2020 by simply removing their staff’s ability to print unless they can demonstrate a specific need to do so. This has highlighted a number of opportunities for doing things differently and has encouraged internal compliance departments to modernise their thinking around what constitutes an acceptable audit trail.
HSBC has been trialling plastic card recycling machines in selected branches - feeding the machine with your expired bank cards results in a very satisfying “munchy” noise and is a worthwhile way to spend a few minutes. The shredded cards are handled securely and recycled into plastic pellets which can then be reused.

So what? The key point to remember here is that we can’t do everything - but we can all do something.

Making law a reality – the Financial Services and Markets Act 2023

In a recent Thought Piece Chris Hemsley, the PSR's Managing Director, reflects on the changes ushered in as a result of the Financial Services and Markets Act 2023.

The Act is a landmark piece of legislation for financial regulation in the UK and includes a number of provisions that address issues raised by the PSR. It will help regulators ensure they have the tools they need to effectively regulate in a complex, ever changing sector. From a PSR perspective, the legislation moves the dial on payments regulation – there’s a lot in the Act that will increase flexibility and better reflect the future of payments. It also provides a mechanism to simplify the regulatory requirements.
Chris Hemsley, Managing Director, PSR.

Chris’ article covers:

Authorised push payment (APP) scams
Protecting access to cash
Provisions that relate to the government’s plan to develop a regime to regulate stablecoins and the cryptoasset sector.
Enabling regulators to simplify their regulatory remit, by repealing retained EU law and incorporating important aspects of it into existing domestic framework.

More: Making law a reality – the Financial Services and Markets Act 2023.

Merchants need to up their chargeback game to reduce revenue loss

Chargebacks are a pain point for merchants which can sap revenue, cause reputational damage and in extreme cases lead to the loss of processing privilege. Yet their existence underpins consumers’ confidence in using their cards, providing recourse against fraud and unscrupulous sellers.

Since the acceleration of the shift to e-commerce brought about by the pandemic, more consumers have become aware of their rights and the chargeback process. This understanding, though, is often imperfect, leading to many chargebacks filed erroneously which merchants end up on the hook for.

It’s not just the financial impact that takes its toll, there is a lot of unseen time and admin on the side of the business that goes into these disputes/claims.
Violeta Stevens, managing director of Union Hand Roasted Coffee.

Mastercard estimates the cost of chargebacks will reach $1 billion in 2023, with merchants bearing most of the cost. The company, along with fellow payment titan Visa, has made changes to try to reduce merchants’ chargeback woes – but there’s plenty merchants themselves can do to minimise the amount of errant chargebacks coming their way in the first place, and to deal with the ones they do receive in a more efficient manner.

More: Merchants need to up their chargeback game to reduce revenue loss.

Payment rails in numbers

This week premium subscribers also received “payment rails in numbers” - here’s an extract covering the latest cheque numbers…

In the 12 months to the end of July 2023 we see that:

Cheque volumes have decreased by 15% (12 months to June decreased by 16%)
Cheque values have decreased by 8% (12 months to June decreased by 9%)

Whilst Faster Payments is experiencing double digit value growth the paper cheque continues to suffer double digit decline – the volume of cheques processed has now decreased by 15% over the last 12 months.

Cheque volumes total just over 1% of the total volumes processed by Pay.UK’s schemes (Bacs and Faster Payments) and continued decline in this share is expected as actual volumes decrease and growth continues elsewhere, particularly with Faster Payments.

Will Big Tech Truly Transform Payments?

Dr. Ruth Wandhöfer recently conducted a fireside chat with Jason Maude, Chief Technology Advocate, Starling Bank to talk about payments and big tech.

This fireside chat delivers market insight including: