Five years on: The UK’s retail payment infrastructure

Issue 175 | 23 September 2021

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Five years on: The UK’s retail payment infrastructure

Earlier today we published an insightful and timely Point of View on the challenges of renewing the UK’s payments infrastructure by Phil Kenworthy, Director of Payment Systems Consultancy Ltd, and previously a CEO of CHAPS Scheme and a member of the Access to Cash Review.

Find out what Phil has got to say about the challenges of renewing the UK’s payments infrastructure here: Phil’s New Payment Architecture Point of View.

A "national security threat" - APP fraud losses overtake card crime

Losses to authorised push payments fraud topped card fraud for the first time in H1 2021, acccording to new figures from UK Finance.

In previous years the largest fraud losses have been unauthorised frauds mainly committed using payment cards. This year, however, criminals focused their activity on APP fraud, in which a customer is tricked into authorising a payment to an account controlled by a criminal.

As a result, UK Finance recorded a 71% increase in APP fraud during the first half of 2021 and, for the first time, the amount of money stolen through APP fraud overtook card fraud losses. All told, authorised push payment (APP) fraud losses in the first half stood at £355.3 million, compared to £261.7 million in losses from card crime.

UK Finance is calling on the Government to step in with a co-ordinated plan using the recently passed Online Safety Bill, to address the issue, which it describes as a "national security threat".

The banking and finance industry invests billions in advanced systems to try and stop fraud happening in the first place, but criminals are exploiting weaknesses outside of banks’ control to trick customers into making payments directly to them.

Criminals continue to target customers with a variety of scams, often via online platforms, and it is only through coordinated action that we will be able to really make progress in addressing the problem.

Katy Worobec, managing director of economic crime at UK Finance.



ATM Tracker

Last week (19 September 2021) the volume of ATM transactions:

  • Decreased by 1% when compared to the previous week in 2021.

  • Decreased by 3% when compared to the equivalent week in 2020.

  • Decreased by 36% when compared to the equivalent week in 2019.


A key addition to modern-era digital payments?

This week we featured a guest blog by Lee McNabb, Head of Strategy and Research at Nat West.

Direct Debits were created in 1964 to make collecting payments from ice cream vendors easier. Given the state of technology and UK roads (there was only one motorway!), considerable time was required to shuttle paper between processing centres, hence the 3-day processing cycle, which over 50 years later still persists.

To be clear the Direct Debit “innovation” has proven to be a useful tool, representing a familiar and trusted way for consumers to pay regular variable bills and businesses to manage:

  • Over 4.5 billion Direct Debit payments are made each year and are used by 90% of UK adults

  • They allow users to ‘set-up and forget’

  • Direct Debits allow amounts to vary with no-fault refunds built in

For businesses, they’re very cost effective and they like the binary outcomes, even if they don’t like the part where a payment fails; although reconciliation files quickly show who paid and who didn’t.


  • Over a million people in the “gig economy” have irregular income patterns

  • A third of UK workers say they live “pay cheque to pay cheque to make ends meet”

  • Over 40% of Direct Debit users have paid charges for bounced payments

And ironically businesses don’t like them for making payments, preferring to retain control over when they’re debited.

Lee’s blog focusses on Request to Pay as a key addition to modern-era digital payments:

  • Moving from ‘order and pay’ to ‘pull and approve’

In contrast to the Direct Debit ‘order and pay’ approach, “Request to Pay” is a ‘pull and approve’ approach, where a business or an individual raises a request, which is approved by the payer before the payment is released… It’s all about choice and flexibility.

  • When customers change, you need to think about changing too.

With over a million people working in the gig economy, where income and payment patterns vary from month to month, greater flexibility than that offered by Direct Debits is required.

  • A (new) key part of the future Ecosystem for Digital Payments?

Request to Pay offers both payers and billers the control and ease of processing they get with Direct Debits while also providing payers with the flexibility and control of their money that they’ve been used to with manual bill payments. It can also be used as a seamless way of requesting what you are owed from friends and family, and linked with Open Banking, can mitigate some real-life customer pain points.

The triggering of real time payment messages for single or ad hoc payments offers payers receiving the payment requests:

  • Control: pay when you can afford to with secure messages to your smart device

  • Trust: requests arrive securely in your app from those you expect to pay

  • Flexibility: could become the way we settle payments between family and friends.


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In brief:

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Sanoke Viswanathan, Chase UK CEO.

Partner connections


Longer read - Let’s finally address push payment fraud

This week’s longer read is a blog by Andrew Smith, CTO & Founding Member at and ClearBank.

Another year and another increase in the cases of push payment fraud. Things are getting so bad now that, apparently, the surge in fraud attacks on consumers has become a “national security threat”.

The Covid pandemic had many more of us shopping online, making online investments, utilising open banking capabilities and basically, moving to a more digital world of payments. Fraud figures last year (2020) were pretty record breaking, that is until you see the figures for the first half of 2021. Criminals manged to dupe us consumers out of some £754m ($1.03b) over the first half of 2021! That is a ridiculous amount of money.

The big issue, well area of growth, is what we call Push Payment fraud – which is basically where consumers are tricked into making a real payment from their bank account directly to a fraudster. This type of fraud is up 71% which puts it ahead now of card-based fraud. Now while everyone is digging out Google, Amazon, Facebook, EBay etc for not doing enough, the simple fact is that the financial services industry doesn’t do enough at all. The banking infrastructure pretty much works on sticky tape and plasters, which makes it all too easy for fraudsters to get around and trick.

Andrew goes on to consider:

  • Confirmation of payee (“Don’t get me started on this”)

  • Understand invoice finance fraud

  • Putting the cost onto the banks

  • Identity to Identity payments

And concludes by stating that solving push payment fraud is possible!


Thanks for reading!