Welcome to issue 140 of Payments:Unpacked, get to grips with the UK’s retail payments landscape with Mike Chambers - exclusive payment insights, hot topic briefings and fundamentals unpacked.
In this week’s edition we consider payment notification distractions, digital budgeting, trust and challenge the old adage that ‘a payment is a payment is a payment’.
I’m 24, stop notifying me every time I buy an iced coffee
An interesting perspective from Olivia Minnock (Liv on Money):
Every time I make a purchase, half a dozen apps clamour to tell me what I just bought and how much I spent on it. I am not sure where they think I was throughout the transaction.
Liv on Money
More:
Want to stick to your budget? Open six bank accounts
Do I need six bank accounts? (Or maybe challenger bank ‘spaces’ or ‘pots’)?
Superb article by Victoria Devine at The Guardian recently published an excellent digital alternative to physical cash based budgeting.
More:
Trust and Tipping Point
Processing 4.5 billion transactions a year the UK’s Direct Debit system is firmly established as a key part of our payments system. In a guest blog we consider how the UK’s Direct Debit system has inspired innovative thinking in the UAE as we feature a guest blog written by Ummair Butt and published by the Emirates Institute for Banking and Financial Studies.
More:
Podcast: There’s an old adage that ‘a payment is a payment is a payment’.
In our podcast we consider Request to Pay from the perspective of a Payment Service Provider (PSP). As Request to Pay gains traction here in the UK should PSP’s adopt a lead or lag strategy?
The podcast is a thought piece originally delivered by Mike Chambers at the Answer Pay webinar “Request to Pay: Lead or Lag? on the 22 June 2021.
Podcast: Request to Pay: Lead or Lag?
Blog: There’s an old adage that ‘a payment is a payment is a payment’.
A new dawn for payments
Victoria Cleland at the Bank of England says the payments industry must work together to build a payments infrastructure for future generations.
There are 12 months to go until the Bank of England move to using a new, global standard for payments messaging, ISO 20022.
Victoria was speaking at City Week, a gathering of the international financial services community. She set out the role of our Real Time Gross Settlement (RTGS) system and our vision for the future.
More:
Request to Pay’s Grand Tour
We are often asked about the parallel developments of the UK and European flavours of Request to Pay and how they might work together. Following the launch of the European version on June 15th, Answer Pay thought it an ideal time to signpost the bigger differences.
More:
You’ll find the blog here: Request to Pay’s Grand Tour.
Consult Hyperion blog: Where Request to Pay (and SEPA R2P) have come from.
Access to cash should be a Universal Service Obligation says Age UK
Age UK is calling on the Government to designate access to cash as a Universal Services Obligation for financial instiutions, much like the supply of electricity and drinking water to consumer homes.
With bank branches and free-to-use ATMs rapidly disappearing from the high street, Age UK warns that being cut off from cash and banking services is tantamount to being excluded from society and leaves older people more vulnerable to financial scams and rip-off artists.
The charity estimates that around 2.4 million people aged 65 and over in the UK rely on cash to a great extent in their day-to-day life - representing around one in five (21 per cent) of all older people.
More:
Access to cash should be a Universal Service Obligation says Age UK
Shrap aims to replace coins with chargecard and app
A new change card and app designed to replace coins by start-up Shrap has started real life trials - with the first two pilots now underway in Rochford in Essex and Denny in Scotland as part of the UK's Community Access to Cash Pilots.
With a significant reduction in cash use - particularly during the Coronavirus pandemic - the cost of maintaining the infrastructure to sort, transport and distribute cash has become unsustainable.
Shrap aims to make cash more efficient and convenient by removing the need for coins - including low domination coins - many of which are only used once.
When using cash in a shop, the business can give change onto a Shrap card. Customers can store their change on the card - or Shrap’s mobile app - and make small payments to shops and friends, anonymously and for free. Businesses maintain a ‘float’ on the platform, with change issued through the app or EPoS integration
More:
Confirmation of Payee for PSP's Not Operating Realtime 24x7 Systems
Bob Ford has been contemplating issues surrounding access to the customer data for those PSP's that don't operate 24x7 systems:
Whilst @JohnBetrand has looked at CoP from various perspectives as the increased vulnerability for customers of PSP's who aren't providing the CoP service, I have been contemplating issues surrounding access to the customer data for those PSP's that don't operate 24x7 systems - those who offer Payment Accounts (as could be defined by the Payment Services Directive 2 (PSD2)) but who operate a very concentrated Monday - Friday, 9-5 type operation.
There are a number of international banks operating in such a manner as well as smaller building societies. Outside of these times, customers do not expect to make or receive payments hence there is no online access etc. In these situations, payments can be made to the account, but the payment instruction (Faster Payments/SWIFT etc) is held until business opening next working day.
Whilst the number of accounts impacted in such situations is low in comparison to the BIG 6 who were mandated by the PSR to implement CoP, the absence of CoP validation provides an opportunity for fraudsters to exploit.
Bob Ford
More
ATM Tracker
We’ll be updating our ATM Tracker in a day or two but last week we reported that:
For the week ending 20 June 2021 ATM transactions:
ecreased by 1% when compared to the previous week in 2021.
increased by 11% when compared to the equivalent week in 2020.
decreased by 40% when compared to the equivalent week in 2019.
Each week we publish a tracker here: ATM Tracker.
Payments Tracker
You’ll find Northey Point’s latest payment scheme tracker here: Payments Tracker.
Here’s a snapshot of the performance of Bacs Direct Credit and Direct Debit:
In the 12 months to the end of May 2021 we see that:
Bacs Direct Credit volumes have decreased by 3% (12 months to April 4%)
Bacs Direct Debit volumes have increased by 1% (12 months to April unchanged)
Total Bacs volumes have remained unchanged (12 months to April decreased by 1%)
Bacs Direct Credit values have increased by 1% (12 months to April decreased by 1%)
Bacs Direct Debit values have decreased by 6% (12 months to April 10%)
Total Bacs values have decreased by 1% (12 months to April 3%).
The recovery in volumes for Bacs Direct Credits has been sustained with the percentage reduction now unchanged.
The small growth in Direct Debit volumes year on year seen through 2020 has returned with an increase of 1% recorded for the year to May 2021.
Overall Bacs volumes are now unchanged year on year and the downward trajectory in values over the 12 month period is decreasing. With restrictions continuing to ease, we are seeing a recovery in both volumes and values and we would expect this to continue as restrictions are eased further over the coming weeks.
In brief
Adapting to a new digital-first reality - building a business case for integrated payments with Access PaySuite.
Latest (payments) developments at Pay.UK, PSR, BoE, HMT, FCA and Open Banking.
Bank of England takes supervisory action over Euroclear settlement outage.
All the fun of the fair - albeit an expensive day out.
Great enhancement to the Kite card from StarlingBank- Kite now comes with an app - helping teach our digital natives sound digital financial skills.
Why the Future of Payments Is Integrated with Access PaySuite.
'Paperless Pledge' could spell the end of traditional shop receipts in the UK.
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, cheques and Central Bank Digital Currencies (CBDCs) 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.
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