Welcome to issue 84 of Payments:Unpacked (you may have noticed a new name for 2021), get to grips with the UK’s retail payments landscape with former Bacs CEO, Mike Chambers - exclusive payment insights, hot topic briefings and fundamentals unpacked.

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2021 Predictions

Last week I featured a series of 2021 Twitter prediction polls from influential payments leaders - the 2021 payment predictions were:

“Open Banking Variable Recurring Payments will come to market in 2021 with consumer protection being a key feature.”

Faith Reynolds

“Will the UK government receive 10 million tax payments by Open Banking in 2021?”

Simon Lyons

“Who will win the mobile wallet and smart bank account wars in 2021?”

Brett King

“Cash fights back: The 2020 gains in adoption of digital consumer payments are wiped out as 2021 sees a surge in cash payments.”

Chris Gledhill

“In 2021, the market for CBDC's will be bigger than Bitcoin.”

Chris Skinner

“In 2021 we'll pass the level of 1.5 billion successful Open Banking API calls per month in the UK.”

Paul Loberman

“The accelerating demise of the bank branch along with the decline in cash will remove one of the few remaining reasons to bank with a traditional bank leading to an upsurge in interest in banks that have been built as digital from the core.”

Jonathan Jensen

“Payments will become increasingly concerned about its impact on society and work harder than ever to ensure inclusion, diversity and openness.”

Tony Craddock

You’ll find the poll results at:

2021 Payment Prediction Poll Votes

Request to Pay (RtP) - the silent revolution?

Robert Krakau asks is Request-to-Pay the revolution in payments?

His conclusion is that:

….RtP is certainly not one that comes with a big bang and offers ready-made solutions immediately.

Some refer to it as "the missing piece" of the payment puzzle - I think it is more as there is enough potential in Request-to-Pay to have a profound impact on payments and the position of its participants in the years to come.

And if you take a closer look at individual countries - this "silent revolution" is already taking place, right now. 

More: Request to Pay (RtP) - the silent revolution?

The road ahead for RTGS Replacement & Message Standards

Sean Devaney, Vice President, Banking and Financial Markets, CGI, speaks during EBAday 2020 about the RTGS replacement programme, what the Bank of England is doing about the delays that SWIFT has announced to the ISO20022 roll out for international payments and what should they & the member banks be focused on.

How do we spend the ‘pound in our pocket’ today?

Over 50 years ago (November 1967) the then Prime Minister, Harold Wilson, was facing a crisis and was defending his decision to devalue the pound saying it will tackle the "root cause" of Britain's economic problems.

Much has happened to our pound (and country) over the last 50 years since the then Prime Minster Harold Wilson said:

It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.

Prime Minister Harold Wilson

This trip down memory lane led me to think about how we spend the ‘pound on our pocket’ that Harold Wilson was so keen to defend.

Read: The pound in your pocket.

Fintech insights chewable in under 30 seconds

This week I came across #FINCUTS by Tanya and her chewable insight on ‘from paper to paperless, bank to neobank - a journey of 400 years’ by Tanya Thourani.

Source: Tanya Thourani.

Retail payments movers and shakers

Each month Premium subscribers receive a briefing which focuses on the latest round up of volumes and values of retail payments in the UK.

Here’s a snapshot of the latest volume and values for Faster Payments:

In the 12 months to the end of November 2020 we see that:

• Single Immediate Payments have increased by 24% (12 months to October 23%)

• Total Faster Payment volumes have increased by 17% (12 months to October 16%)

• Total Faster Payment values have increased by 8% (12 months to October 7%)

The trend continues such that monthly volumes remain above pre-Covid levels despite the probable impact from the second national lockdown in November; the total number of Faster Payments processed in November 2019 was 213,369,000 compared to 263,070,000 in November 2020.

Click here to subscribe to the premium edition and access the latest retail payments movers and shakers:

Retail payments movers and shakers

Check cashing in the US

Venmo has rolled out a feature that lets some customers cash paper cheques - including government stimulus cheques - within its app.

Available to "select" customers, the Cash a Check feature will allow people to cash printed, payroll and government cheques directly from the Venmo app. Customers take a picture of the cheque and send to their account for review using the Venmo app, after which the money is deposited in their account, within minutes.

Eventually, Venmo will charge a one per cent fee on any government or payroll check cashed in the app with a pre-printed signature, with a minimum fee of $5.00. For other cheques, including hand-signed payroll and government checks, there will be a five per cent cashing fee, with a $5.00 minimum.

More: Venmo introduces cheque cashing feature.

Based on the above the UK’s image cheque clearing service (ICS) compares favourably.

Cheque imaging is the process that enables images of cheques to be exchanged between banks and building societies, through the Image Clearing System, for clearing and payment across the UK, including Northern Ireland. 

ICS allows a customer to either pay-in normally at their branch or send in an image of the cheque (via a mobile banking app) to their bank (if their bank offers that service). The bank then either creates its own cheque image or uses the customer’s, and sends the image via ICS to the paying bank, for security, administrative and sufficient balance checks, after which the paying bank sends the money to the payee bank. Typically, the ICS has enabled cheque processing to reduce from 6 days to be absolutely certain that the cheque won’t bounce to 23.59 the next weekday after paying in a cheque.

Mote: UK’s image cheque clearing.

Read, subscribe and share

Getting to grips with the UK’s retail payments landscape can seem a complex and daunting task.

The Payments:Unpacked newsletter from Mike Chambers at Northey Point explores a wide range of the UK’s payment news including: Open Banking, Request to Pay, Direct Debit, Confirmation of Payee, Bacs, CHAPS, Faster Payments, LINK, cash, cards and cheques and unpacks the eco-system that supports the operation of these systemically important payment systems.

The newsletter is an independent and informed insight into the UK’s payments landscape – exclusive payment insights, hot topic briefings and fundamentals unpacked.

Join the rapidly growing number of subscribers and navigate the UK’s payments landscape with former Bacs CEO Mike Chambers.

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And finally

In early 2020 we saw the UK’s contactless payment limit rise to £45. Over the last couple of days there has been lots of media coverage on whether the UK’s contactless card limit ought to be increased to £100. This idea certainly found favour with a Twitter poll I ran:

Thanks

Mike