Navigating the payments matrix: Charting a course amid evolution and revolution

Issue 128 | 1 June 2021

Welcome to issue 128 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.

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Banks call time on cheques

Yesterday was the last day ANZ will handle cheques as it becomes the latest New Zealand bank to phase out the payment method.

From today (1 June 2021), customers will no longer be able to deposit a cheque into an ANZ account or use an ANZ cheque to make a payment to another bank.

The number of cheques had been going down by about 20 per cent year-on-year, and last year that increased to 30 per cent, it said.

Westpac and BNZ will stop accepting cheques in late June, while ASB will be cheque-free from August 27.

Pairing chip cards to a wearable with a phone tap

Digiseq have announced a wearables breakthrough through a mobile app that can turn any supported object embedded with an NFC chip into a contactless payment device.

The firm's Manage Mii mobile app enables 'Rapid Contactless Personalisation' for consumers to embed any supported object, from shirt cuffs to jewellery, with contactless payment capabilities with just a tap of their phone. 

The service makes objects embedded with an NFC chip payment ready, without the need to be personalised by the manufacturer or at a retail kiosk before being ready to use.

This week Colin Tanner and I filmed a live transaction where I provisioned my own Alioth Pay ring with Mastercard using my own iPhone 12. I’m delighted that together we are making wearables a reality for the mass market.

Dave Birch

Here’s the video:

Handle with care

Cash will account for just seven percent of in-store purchases in the UK by 2024, according to calculations from Worldpay.

The study found that cash usage for in-store purchases in the country declined from 27 percent in 2019 to just 13 percent last year, with the Covid-19 pandemic fueling a shift in consumer payment preferences.

Across all countries studied, cash usage dropped by 10 percent in 2020 to 20 percent of transactions. The Worldpay report predicts that many European countries, including Denmark, Norway and Sweden, will be almost cashless by 2024, and that the growth of non-cash payment methods will be primarily split between cards and mobile payments, with mobile payments expected to comprise a third of the POS market in 2024.

If the shift away from cash is not handled carefully, there is a very serious risk that it will exclude a significant number of people who are not ready or able to take advantage of these payment methods.

Gareth Shaw, Which?

More: Cash will account for just seven percent of in-store purchases in the UK by 2024.

Navigating the payments matrix - Charting a course amid evolution and revolution

Sending a text to pay for a bus ticket in Turkey, using a QR code to pay for groceries in China, or tapping a sales terminal with a mobile phone in the US. 

The financial services industry is in the midst of a significant transformation, accelerated by the COVID-19 pandemic. And given the key role digitisation plays in the financial lives of more and more of the world’s population, electronic payments are at the epicentre of this transformation.

Payments are becoming increasingly cashless, and the industry’s role in fostering inclusion has become a significant priority. Payments also are supporting the development of digital economies and are driving innovation — all while functioning as a stable backbone for our economies. 

PWC have published a report in their 2025 & Beyond series focusing on the payments industry and the key themes that are influencing it. PWC suggest that how the industry responds to these trends will define how successful it is in the coming years and its impact on society overall.

Even before COVID-19, these ways of paying for goods and services were evidence of a steady shift to digital payments— a shift that might ultimately lead to a cashless global society. Global cashless payment volumes are set to increase by more than 80% from 2020 to 2025, from about 1tn transactions to almost 1.9tn, and to almost triple by 2030, according to analysis by PwC and Strategy.

PWC suggest that Asia-Pacific will grow fastest, with cashless transaction volume growing by 109% until 2025 and then by 76% percent from 2025 to 2030, followed by Africa (78%, 64%) and Europe (64%, 39%). Latin America comes next (52%, 48%), with the US and Canada growing least rapidly (43%, 35%).

#HerStory

On the #HerStory Podcast you’ll find Digital Women of all kinds sharing their stories of how they came to where they are now, what that means for them, what they’ve learnt, what they’re re-learning and the new questions they’re looking for answers to.

Andrea Dunlop of Access features in the latest podcast - Digital Women introduce Andrea as:

Andrea Dunlop is amazing. Not only is Andrea a leader in the payments industry but she strives to help others.

Andreas story is inspirational. She is an amazing woman who has done so much and achieved so much.

She's authentic, she knows she's not got it sorted yet but she'll carry on until she gets it done.

Hear Andrea's story.

Here’s the podcast:

Weekly ATM value and volume figures 23 May 2021.

  • Volume of ATM transactions increased by 1% when compared to the previous week in 2021. 

  • Volume of ATM transactions increased by 13% when compared to the equivalent week in 2020. 

  • Volume of ATM transactions decreased by 45% when compared to the equivalent week in 2019.

More:

Where will the SEPA Request to Pay scheme be most useful?

The SEPA Request-to-Pay (SRTP) is the latest European Payments Council’s (EPC) scheme that covers the set of operating rules and technical elements (including messages) that allow a payee to request the initiation of a payment from a payer in a wide range of physical or online use cases. 

During the past two months, the EPA invited professionals working in the payments industry to answer the following question: 

“In your opinion, for which situation would the SEPA Request-to-Pay (SRTP) scheme be the most useful?”

The results were as follows:

The results show a wide range of opinions, but it is however worth highlighting that substantially more than half of the voters (56%) agreed that Customer-to-Merchant (C2M)/M2C, as well as other Business-to-Customer (B2C)/C2B would be the payment situations where SRTP would be the most useful. 

Person-to-person (17%) and Business-to-Business (B2B) (18%) payment situations were chosen almost equally and the remaining 8% of voters choose Business-to-Government (B2G)/(G2B), Government-to-Customer (G2C) and “other” use cases. 

In brief

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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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