The end of BECS?
Issue 228 | 5 January 2022
Welcome to everyone who has subscribed to Payments:Unpacked over the last couple of weeks - another record level of new subscribers. In fact, 2021 was an incredible year with a subscriber increase of over 150%!
Please share Payments:Unpacked amongst your networks - just one share makes a real difference!
Australia’s New Payments Platform and the end of BECS?
In Australia the Bulk Electronic Clearing System (BECS) governs how direct debits, automatic payments, bill payments, and direct credits work. BECS governs how a range of bulk electronic transaction types are made between its Participants. BECS covers direct debits, automatic payments, bill payments and direct credits.
The launch of the New Payments Platform (NPP) in Australia provides opportunity to move corporate payments to real time and data rich payments between bank accounts.
For us in the UK, it also provides an interesting opportunity to consider how the future of BECS within the Australian NPP might help unwrap the future of Bacs within the UK’s proposed New Payments Architecture.
A recent post by the National Payments Platform provides a helpful background:
With the eventual closure of BECS in sight, the NPP offers more than speed for corporate payments.
Following consultation with its large BECS members, AusPayNet in its Future State of Payments Action Plan, has suggested a timeframe of between five and six years is potentially achievable for the closure of the BECS Framework.
Built in the 1980s, BECS has been a steadfast enabler of the Australian economy. But the environment in which it operates has significantly evolved. Advances in technology have significantly sped up processes, and when combined with data, they become smarter and more automated. Consumer and business expectations have also evolved; we now presume things should happen instantly, seamlessly and with minimal effort, whilst also being safe and secure. This is the environment that saw the emergence of the NPP in 2018.
The NPP is modern payments infrastructure designed to enable real-time payments between bank accounts, 24 hours a day, every day of the year. It currently processes nearly three million payments a day reaching more than 76 million accounts across 105 participating financial institutions. But the NPP’s world-class capabilities offer more than just speed.
As well as enabling better customer experiences, migrating corporate payments (including those submitted in bulk) to the NPP enables more efficient working capital management, provides access to real-time data, and reduces manual handling and exceptions with instant payment outcomes. It also delivers more certainty and assurance through upfront account validation and payee confirmation, making it more effective in combatting financial crime and fraud.
More: The end of BECS?
The UK’s path to digital inclusion
Join LINK and friends the 9th February to explore the UK’s path to digital inclusion.
The world has become increasingly digital over the past few decades, with many people relying on a digital device, whether it is a phone, tablet, laptop or even a smart-watch for work, managing their finances, entertainment and socialising. The pandemic highlighted the positive impact a digital world can play to keep us connected and informed in difficult times. However, it is not a level playing field, with many unable to enjoy the benefits and risk being left behind.
Globally 3.7bn people are digitally excluded, that’s nearly half the world’s population. In the UK, one of the countries leading the digital revolution, 10 million people, 15% of the population, lack the basic skills needed for the digital world, and rely on cash and it is thought nearly 7 million will remain digitally excluded if nothing is done to help them.
This presents an urgent challenge for industry and policymakers: how to ensure that everyone benefits from the inevitable digital future? In this webinar, we will discuss the UK’s path to digital inclusion and how the transition from cash to digital payments can play an important role.
The online event will feature:
New research presented by John Howells, CEO of LINK, will shed light on the use of cash and digital payments in the UK and Europe, and the risks to inclusion.
Ruth Wandhӧfer, Chair PSR Panel, who will provide some insights into the barriers to the take-up of digital payments and the direction needed to ensure digital inclusion.
Natasha de Terán, Financial Services Consumer Panel, who will discuss the inclusion possibilities and challenges that are presented by a Central Bank Digital Currency.
Dr Sarah Walton, who will explore how a more effective approach to digital identity can transform inclusion.
Open Banking to Open Finance and Beyond
Open Banking is turning into Open Finance and will, in time develop into Open Data.
Over three podcasts Marcus Hughes, Head of Strategic Business Development at Bottomline, shares his insights on the current adoption of Open Banking, the evolution of Open Banking to Open Finance and the process behind the information sharing and payment initiation services.
Part 1: Marcus shares his insights on the current adoption of Open Banking, the evolution of Open Banking to Open Finance and the process behind the information sharing and payment initiation services.
Part 2: Marcus talks about the evolution of Open Banking to Open Finance and how it’s gaining traction. He discusses which countries are welcoming the change and their approach to adapting to new data rights and sharing.
Winning back Direct Debit cancellations
The start of the year is a hard time financially for a lot of us. In terms of business, the charity sector suffers more than most. If you’re a charity who sees an influx of DD’s cancelled around this time - Access PaySuite have provided some tips for what you can do.
Analogue (cheque) payment volumes fall to 1.5% of volume share
In the 12 months to the end of November 2021:
Cheque volumes have decreased by 20% (12 months to October 22%).
Cheque values have decreased by 15% (12 months to October 19%).
Despite the introduction of the image-based cheque clearing system, the volumes have continued to drop over the 12 month period. Volumes processed by the Image Clearing System in November were 12% lower than during November 2020. In August the value increased year on year, although it has fallen each month since that time. This has occurred again in November 2021 with values falling by 3% compared to November 2020. Thus although usage is falling as many have undoubtedly switched to digital payment options, there is some underlying resilience which continues to be seen in this method of payment.
However, with volumes of digital payments continuing to increase, the share of legacy payments within the total continues to fall. For the twelve months to November 2020 the volume of Cheque payments accounted for 2.0% of the total (for Bacs / CHAPS / Faster Payments and Image Clearing System) falling to 1.5% in November 2021.
European Payments Council SEPA RtP Second Version
An early Christmas present to European payments industry nerds landed on Tuesday 30th Nov, with the second iteration of the European Payments Council (EPC) rulebook.
Using ISO20022 standards for Request to Pay (RtP) messages as a baseline, the EPC launched scheme rules that govern how those messages should be used and how participants interact with one another. Since being introduced in June this year it has seen its adoption by at least 15 different technical providers, a necessary precursor to bank adoption.
We’ve also seen the Berlin Group propose an API standard as part of its Open Finance suite of services demonstrating the industry interest in this service. Couple this with the regulatory tailwinds such as the mandating of eInvoices in France and speculation of a European Commission mandate around use cases that stimulate SEPA instant adoption (such as Request to Pay) and it looks to be exciting times for the EPC team.
The UK has its own home bred alternative in the shape of Pay.UK’s Request to Pay. Launched in June 2020, it has some key functional differences to the SEPA RtP scheme which we discussed here. With these latest changes, SEPA RtP now provides competition to the domestic Pay.UK scheme giving PSPs the choice of which flavour suits them the best. Answer Pay supports both and has an end to end demonstration of the two services for those who would like more information.
Fraud expert who fell victim to online scam shares red flag she didn't spot 'Felt stupid'
It's really easy to to find yourself the victim of a scam as I discovered.
In addition to being an avid reader of Paymnets:Unpacked, Sarah Rutherford has over 10 years experience working in the fraud, cybercrime and compliance business. In an article that appeared in the Daily Express Sarah has been sharing her experience in falling victim to a scam, proving that anyone can find themselves out of pocket due to fraudsters.
A lot of people have been pushed to using online shopping for the first time and they’re at risk but sometimes it’s also the people like myself that think they know what they’re doing because actually they don’t.
AI in Payments - Fact or Fable?
The majority of payments organisations are using some form of AI to unlock revenue growth opportunities, minimize operating expenses, improve the customer experience and automate manually intensive processes.
Stay ahead of the AI curve in 2022 and attend the Payments Association’s first webinar of the year to hear from industry leaders and subject matter experts from Barclays Corporate Banking, Crown Agents Bank, Fable Fintech, and more on what separates the AI projects that succeed from the ones that don’t often and what use case we have to support that.
Join us on the 20th of January from 14:00 - 15:30 GMT to discover the:
Key AI trends to watch out for
Upcoming risks and new opportunities
Strategies you need to master this expanding market
Register: AI in Payments - Fact or Fable?
#227: “Cashback Without Purchase” launches in the UK.
Prediction made in 1953: “There’ll be no escape in future from telephones”
Help grow Payments:Unpacked’s audience
If you enjoy reading Payments:Unpacked please share the word with your friends and colleagues - sharing the newsletter makes such a difference to growing the newsletters audience.
Payments:Unpacked is a reader-supported publication. To receive new posts and support my work, please consider becoming a free or paid subscriber:
Payments:Unpacked is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.