When we have money with an API on top of it, who knows what smart kids will build on top of it
Issue 409 | 7 November 2022
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David Birch: What CBDCs will mean for UK Businesses
Access Paysuite recently asked Dave Birch to explain what the future holds for Central Bank Digital Currencies in the UK - three questions for Dave:
For those of us who are still not aware, what are CBDCs? Why are they being discussed now?
We have seen that the EU are working towards adopting a digital identity system- will the UK follow suit? If so, what does this mean for businesses?
If the UK adopts CBDCs what is the effect on businesses likely to be? Will they pay employees in CBDCs? How will they take payments in this new currency?
Here’s a snapshot of what Dave said:
The reason that they are being discussed now is that the rise of the online economy, not to mention the Metaverse, needs new and more efficient ways to move value around. Unlike electronic money, that moves through the banking network, electronic cash moves over the Internet, and goes from one wallet to another without needing any clearing or settlement systems. This means that it is much cheaper in practice and that's why many people are looking forward to its introduction. Personally, I think the innovation agenda is the most interesting part of this: when we have money with an API on top of it, who knows what smart kids will build on top of it.
Intrigued to hear what Dave thinks about CBDCs?
Checkout this blog from Access PaySuite on what the future holds for Central Bank Digital Currencies in the UK.
Four new locations for banking hubs which share facilities revealed
Source: BBC
Four more communities have been earmarked for shared banking hubs - becoming the latest on a list of 27 areas waiting for services to begin.
At these hubs, customers of any bank will be able to access their accounts, deposit cash and cheques, and withdraw money at any time. Running costs are the same as a small branch, but are shared between different banking groups that use it.
The four new locations which will receive hubs are: Bury Park in Bedfordshire, Haslemere in Surrey, Prestatyn in Denbighshire, and Welling in south east London.
Natalie Ceeney, who chairs the Cash Action Group and Banking Hub Company, said:
We are expecting a couple more to be live before Christmas. We are making good progress with all hubs and expect a significant number to open in early 2023.
When we are visiting locations that will get a hub, we are looking for buildings that are the right size, located in an appropriate location and have the facilities to support all customers. We then often need to make changes to the building to make them suitable for a banking hub, some of which need us to get planning permission. This process has not always been easy, but we are making good progress.
In response Jenny Ross, money editor at Which?, said:
Banking hubs could play an important role in ensuring the cash needs of local communities are met. However, the rollout is taking far too long and the hubs must open as soon as possible so consumers can benefit.
In addition to the hubs, more withdrawal and deposit machines - which are unstaffed but can allow businesses to cash in their takings - will be placed in premises such as libraries and community centres and available during their opening hours.
They will be located in Bingley in West Yorkshire, Finchley in north London, Leigh-on-Sea in Essex, Melksham in Wiltshire, Plympton in Devon, and Sandbach in Cheshire.
Can you still pay by cash?
New research from the European Central Bank found that the majority of high street businesses in the euro area view cash as an important payment method.
But how long will this be the case as digital payments become more popular, particularly for low-value transactions?
What's the situation in the UK?
Aren't all shops cashless since the covid pandemic?
Hear the views of David Hensley and David Fagleman from Enryo in their half hour briefing: Can we still pay by cash?
Need to implement Confirmation of Payee? Why wait?
In October the Payments Systems Regulator (PSR) announced that banks and PSPs identified as Group 1 & 2 Confirmation of Payee cohorts will need to have implemented CoP by October 2024.
Join SurePay for their webinar on the 16 November and understand what this means for your Bank or PSP - the webinar will cover:
Implementation for Group 1 & 2 extended to October 2024
Cost concerns to implement CoP
Resource concerns
Benefits of implementing CoP early
Register via: https://lnkd.in/eP-9MRyP
Continued strong growth by Faster Payments
In the 12 months to the end of September 2022 we saw continued strong growth from the UK’s real time payment system Faster Payments:
Single Immediate Payment volumes have increased by 18% (12 months to August 17%)
Total Faster Payment volumes have increased by 16% (12 months to August 16%)
Single Immediate Payment values have increased by 24% (12 months to August 23%)
Total Faster Payment values have increased by 22% (12 months to August 22%)
The trend has continued in September with both volumes and values ahead of 2021 levels. September 2022 saw an increase of 17% in the volume of Single Immediate Payments processed in the month compared to 2021 and 27% in the value of Single Immediate Payments.
The widespread use of Faster Payments is a digital payment habit that will be here to stay, reinforced throughout the pandemic and with volumes and values continuing to increase month on month.
Although the trajectory has flattened a little particularly when similar conditions have been in place, an overall significant increase year on year looks set to continue for some while to come – particularly with inflationary pressures also having an impact on the value of payments processed.
More: For more on the winners and losers of the UK’s payment rails visit the Northey Point Payments Tracker.
New Payments Platform (Australia)
With the development and introduction of the New Payments Architecture here in the UK it is interesting to see news on the uptake of Australia’s New Payments Platform.
There are now close to 89m accounts able to make or receive NPP payments
The NPP processes >100m transactions a month
One in three account-to-account credit transfers are via the NPP
There are close to 13m registered PayIDs, a 44% increase since the same time last year with 315,000 new PayID registrations on average being added every month
Usage of PayID is growing with research conducted by NPP Australia revealing that 47% of users use PayID at least weekly.
The roadmap just published by NPP Australia contains the latest status of the NPP’s planned capability development, namely the delivery of the PayTo service in 2022 and preparing for the International Payment business service in 2023.
More: New Payments Platform (Australia).
What will the European Instant Payments mandate mean for you?
Source: Elise Thrale, ACI Worldwide
The European Union (EU) is proposing that Banks (PSPs) operating in the bloc should send and receive mandatory instant payments (IP) in euros.
This is part of the EU’s bid to modernize the way Europeans pay, allowing Europeans to transfer money in seconds, at any time of day, 365 days a year. The benefits would include easily accessible cross-border payments, fostering a more dynamic pan-European market for payments.
Although SEPA (Single Euro Payments Area) already exists as an infrastructure in Europe for real-time payments, adoption has been slow. Where previously, sending euros cross border in real-time was costly, the new mandate will make real-time transfers as simple as other popular payment methods, such as card. The customer will be able to easily choose this as an option and not be inhibited or discouraged from selecting it.
The European parliament will have the final say as to whether this instant payment mandate goes through, but it is looking likely, and is sure to change the European payments ecosystem. Banks that transact in the euro zone should start preparing now, and consumers can look forward to a future of seamless digital user experiences, and convenience.
More:
What will the European Instant Payments mandate mean for you?
Understanding Real-Time Payments: The complete guide from ACI Worldwide.
The opportunity of Variable Recurring Payments in Europe
Jozef Klaassen, Vice President, Head of European Open Banking Sales, Mastercard joined FinextraTV at Sibos 2022, to discuss the future of VRP and Mastercard's work in building and strengthening European open banking through their acquisition of Aiia.
Payments:Unpacked Podcast Season 2
We are back with Series 2 of the Payments:Unpacked podcast.
In episode 1 we joined Enryo for a discussion on whether Open Banking is the future of retail payments.
And in episode 2 we were joined by Peter Cornforth from Answer Pay to discuss SEPA instant, partnerships and big topics for Answer Pay.
Don't miss out on future podcast episodes - subscribe via: Newsletter, Spotify, You Tube
If you would like to feature in a future Payments:Unpacked podcast please contact Mike Chambers at: collaboration@northeypoint.co.uk
Fintech Playlist 💿
What if all the newsletters and posts you read about fintech were a weekly playlist?
Each week Barb MacLean answer that question perfectly matching fintech newsletters with a playlist to take you through your commute / job.
Not signed up yet?
Here’s a link for you: Fintech Playlist 💿
In brief
Swift has postponed ISO 20022 migration to next March, citing members' desire to keep in line with the Eurosytem migration, which was delayed by the ECB earlier this month.
South Africa's top four banks are to begin the roll out of Payshap, a low value, interbank, real-time digital payments service aimed at increasing financial inclusion to the underbanked segement.
ICYMI
Don't write off our cheques! (or has that ship already sailed?)
Guaranteed so you can kick back and relax - Current Account Switching performance scorecard.
And finally….
We could be working from home by 1981
Help grow Payments:Unpacked’s audience
If you’re interested in sponsoring Payments:Unpacked or want to ask me to speak at your event please get in touch collaboration@northeypoint.co.uk.
Will you cover the LBRY debacle and all its ramifications?