The future of payments is open
Issue 350 | 27 June 2022
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The future of payments is open
In its latest survey report Tink report that:
Open Banking has generated plenty of hype and headlines over the last four years. To speak of its industry-changing potential can sometimes feel like a truism, even a cliché. That is why Tink does an annual survey of senior executives in financial services on their attitudes to open banking. Their research helps us understand the momentum, what the challenges are, and what we need to do as an industry to overcome them.
Today, it looks inevitable that the payment industry is on the verge of a big bang caused by open banking. Tink's 2022 report, which surveyed almost 400 finance leaders across Europe, provides some evidence of the first stirrings.
Tink’s three headline findings are:
Over the last few years, the attitudes by financial executives towards open banking services had improved significantly, with 55% of executives being positive in 2019 to 71% in 2021.
Payment initiation services was ranked the most important investment area as an open banking use case, with 72.1% of financial executives agreeing.
All executives indicated that their business has either already invested in open banking (75%) or plans to in the next 12 months.
Read more in the Tink 2022 open banking survey report, “The future of payments is open” which is available for free on the Tink website: here.
Ensuring Payments Are Collected on Time, Every Time
With small businesses across the UK having to constantly evolve and adapt in line with government guidance and consumer demand, the past two years have been filled with challenges. While many had hoped 2022 would be a more positive year, the ever-changing macroeconomic circumstances – fuelled by the war in Ukraine – continue to create problems.
For SMEs, rising utility prices, wage inflation, and a reduction in consumer spending may all have a detrimental impact on the bottom line, making it more important than ever to ensure payments are collected as efficiently as possible, on time, every time.
Given the importance of ensuring that payments are collected on time, every time it was privilege to pen a piece for Payments Journal piece for Access PaySuite: Preventing late payments from becoming a critical issue.
The road to enhanced payments
Victoria Cleland has been speaking about how the Bank of England are taking steps to support the payment industry in the UK to innovate and offer better services for its customers.
The ability to make payments safely and effectively is essential to each and every one of us. And has been for millennia – from the pre-historic communities exchanging seashells and grain to the vast number of electronic payment methods we have today. Effective payments are essential to both trade and commerce: research consistently finds that improved payment methods have a multiplier effect on economic growth
Technology continues to transform retail payments: the way we pay for goods and services has changed dramatically over the past decade or so. In many countries, you can now pay for your tea and cake with a smartwatch, or send your friends a ‘payment request’ with a few taps to split a bill at a restaurant. Many people’s wallets are now virtual rather than physical. Innovation has expanded the frontier of what is possible and provided many of us with access to faster and simpler payment services.
It is not just the private sector that is innovating. The changing user demand for electronic payments is inspiring central banks to consider the future of payments. A topic of intense interest is Central Bank Digital Currencies (CBDCs). CBDCs (particularly retail CBDC) could create a new form of digital money, issued by the central bank, and available for households and businesses to use. Whether to issue a CBDC, for which use cases, in what form, and with what consequences are all major questions currently being considered by central banks and governments across the globe. No decisions have been made in the UK and we continue to work closely with a wide range of stakeholders to develop a clear understanding of the potential implications: positive and negative.
Market review of card scheme and processing fees
The Payment Systems Regulator (PSR) have published the details of two market reviews focusing on card fees. One looks at scheme and processing fees, and the other at cross-border interchange fees. The reviews focus on Mastercard and Visa as these two card payment system operators account for 99% of debit and credit card payments in the UK.
On scheme and processing fees, the PSR state that they are carrying out this review because their card-acquiring market review (CAMR) found that the fees paid by acquirers had increased significantly from 2014 to 2018. Further feedback from stakeholders also highlights that scheme fees have continued to increase since then. The PSR wants to understand whether the markets in connection with scheme and processing fees are working well. In particular, this market review will examine the levels, structure and types of scheme and processing fees, and builds on the PSRs CAMR findings.
In addition, the PSR state that cross-border interchange fees have also increased significantly in the last year. This affects fees for certain card transactions between the UK and the EEA, where the cardholder is not present (such as payments made by phone or online). Since the UK left the EU, Visa and Mastercard have increased these fees five-fold.
The PSR wants to understand the rationale behind these increases and whether they are an indication that the market is not working well - more:
Confirmation of Payee: Best use of security / anti-fraud solution in payments
SurePay will be attending the FinTech Futures PayTech Awards 2022 Ceremony in London on Friday where the winners of the “Best Use of Security/Anti-Fraud Solution in Payments” award will be announced.
SurePay was able to offer and implement their Confirmation of Payee solution within two weeks through a seamless collaboration and scaled their capacity to meet the high volume and responsiveness required for this real-time check.
Using a direct access API, our clients can now check high volumes of outbound payee details to help prevent fraudulent and misdirected payments. This improves efficiency by ensuring the recipient payee’s details match those registered to the account outside of the payment process.
SurePay have also been shortlisted for ‘Best Cross-Border Payments Solution’ SEPAMAIL.EU and StreamMind.
Mastercard drops album featuring its sonic brand
Mastercard has released an album on which every song integrates the payment giant's 'sonic brand'.
Available on Spotify, the Priceless album features 10 original songs from 10 emerging artists from around the world - each incorporating the melody of Mastercard's "brand sound".
Mastercard unveiled its sonic brand identity, scored with the help of Mike Shinoda of US rock band Linkin Park, in 2019 as part of a rebrand that also saw it drop its name from its logo and look to reinforce its identity in ways more suitable for the digital age. The following year, it teamed up with Swedish singer Nadine Randle to drop a single, called Merry Go Round. It has racked up around 55,000 views on YouTube while a used copy of the vinyl is currently going for $25.65 on ebay.
For the album, Mastercard joined forces with producer Timbaland’s Beatclub music creator platform. As part of the collaboration, the payments firm will purchase and provide one-year memberships to the Beatclub platform to hundreds of up-and-coming creators from disenfranchised communities.
Financial Crime - How to solve the multi-billion-pound problem
Oliver Bullough is an award-winning author and journalist who writes about financial crime, the former Soviet Union and money laundering in the UK.
Oliver talks candidly to Jonathan Jensen, Regulatory Policy Advisor at GBG, about his new bestselling book Butler to the World, financial crime in the UK and the recent sanctions against Russia.
Fighting fraud and financial crime is a continuous battle. However, by forming constructive partnerships, relentlessly innovating and using the right data and technology, we can help rebuild trust in 2022.
Key topics include:
Increase in financial crime in the UK
The latest on sanctions against Russia
Proactive insights to fight economic crime in 2022
More: On demand webinar - Financial Crime - How to solve the multi-billion-pound problem.
No Time To Waste Ahead of U.K.’s New Payments Architecture Launch
The U.K. payments industry is entering an all-important demand creation phase, as it prepares to launch the country’s New Payments Architecture (NPA). Borja Lopez spoke with Andy Morris, strategic solution consulting director at ACI Worldwide, to learn more about the opportunities on the horizon for the U.K.’s financial institutions, particularly around contextual and embedded payments.
Check out their conversation: No Time To Waste Ahead of U.K.’s New Payments Architecture Launch.
For more on ACI Worldwide and NPA:
Payment infrastructure for a digital era
New payment infrastructure should be managed by both central banks and the private sector, according to industry experts. In a new podcast officials from ACI Worldwide and Mastercard discuss the evolving payment landscape and what role central banks should play.
Identify repeat payers with webhook notifications
For many merchants, it’s not always easy to flag those who are using the same account to make multiple payments, especially if they are using a number of different accounts on your website. Vyne’s new notification system takes the guesswork out and allows you to be alerted as soon as a repeat payment is made.
This can be useful in many scenarios:
Do you have a signup bonus incentive? You can now identify a customer who is creating multiple new accounts but using the same banking details to claim the promotion.
Are you an online retailer selling a product with limited quantities per customer? Get your product out to as many of your customers as possible by being flagged for those who could be abusing the system.
Are you required to have enhanced KYC checks? Our notification system allows you to ensure the details you have registered match up to the bank account the payment is coming from.
Are you concerned about customer fraud? Vyne’s Pay with bank not only reduces the risk of fraud, it can also help further satisfy audit checks by providing details about the remitter of funds.
How bill payments have transformed since the pandemic from Answer Pay.
Starling Bank has passed the three million current account milestone, which includes more than 460,000 small business accounts. The figures come five years after the digital bank launched its Personal Current Accounts in May 2017, while its Business Current Accounts now account for 8% of the UK SME banking market.
German BaaS player Raisin Bank is moving into the payments business after agreeing to buy a Bankhaus August Lenz unit. By acquiring the payments division of the German private Bank, Raisin will be able to offer its partners and their customers electronic payment transactions as well as cash solutions.
PayPoint joins Pay.UK’s Confirmation of Payee service to deliver services to support local government and energy companies deliver cost-of-living support payments. More people – including those vulnerable or at risk of exclusion – will be able to receive cost-of-living payments safely and securely through the CoP service.
Latest research from the 2022 Bottomline Business Payments Barometer report shows that 29% of British businesses fell victim to fraud last year.
Tensions between the traditional banking sector and the increasingly popular buy now, pay later industry spilled over this week as Klarna hit back at Barclays' research on BNPL regulation, calling it "mind-boggling" and irresponsible".
Revolut will roll out its "responsible instalments payment product" - dubbed Pay Later - in Europe, starting with a select group of customers in Ireland this week.
With inflation rising and the possibility of a recession on the horizon I spoke to Access Paysuite about what is causing the current problems and where companies can go from here - What rising inflation mean for the UK's subscription businesses.
Customer onboarding is an integral element of almost any type of modern business, including banking and finance. Did you know that, several years ago, an average customer onboarding process in financial institutions took about 24 days? Salt Edge explores how open banking enhances the customer onboarding process, accelerating it from days to minutes! Onboarding giving your customers a headache? Open banking is a painkiller you need.
Last week’s Payment movers and shakers Payments Tracker illustrates the impact on the volume and value of payments processed in the UK following the removal of Covid restrictions, compared now with similar conditions in the equivalent months in 2021 as we emerged from Lockdown 3.0. (Our payments tracker is accessed through a Premium subscription - click here for a three month complimentary Premium subscription (no card required!).
Covering Request to Pay, Confirmation of Payee, card payments, Direct Debit, payments and A2A payments Payments:Unpacked is pleased to work with the following partners:
Request to Pay: Join the secure payment revolution with Answer Pay.
Card Payments: Card Industry Professionals supporting Businesses to Accept Payments In-Store, Online or Over The Phone!
Payment Solutions: Seamless, secure & affordable payment solutions that enable organisations of all sizes to accelerate growth & innovation from Access PaySuite.
Payments: ACI Worldwide - New Payments Architecture, ways ACI can help you today, to support your migration to NPA.
If you’d like to join support Payments:Unpacked in helping unpack the UK’s payments landscape contact: firstname.lastname@example.org
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