Last week, the UK government shared its National Payments Vision – what policymakers are seeking to do to enable “world leading payments” for the country. The UK is a global Fintech hub and payments are seem as vital to the growth of the UK economy. The UK is also a jurisdiction with many digital payments providers.
Published by HM Treasury, the document states:
“Almost 50 billion payments were made in the UK last year by consumers and businesses. That’s around 1500 transactions every second. But while most of us will keep a close eye on what we’re spending, we rarely need to give a second thought to how that payment is made. And that’s the way it should be. Payments – whether by cash, cheque, card or bank transfer – should just work.”
But as with many things tech, the devil is in the details, and seamless digital transfers and payments must be compliant, secure, and near-instantaneous while driving value for users.
“A world-leading payments ecosystem is a critical underpinning to this government’s central growth mission and its ambition to deliver world-leading rates of GDP growth,” declares Tulip Siddiq, MP Economic Secretary to the Treasury.
CI received a statement from Dima Kats, CEO and founder of Clear Junction, a payments provider. Kats said the big news is that the Vision exists, noting that it is crucial to have a clear direction defined by the UK government.
Kats added:
“The news that the FCA is displacing the PSR in overseeing Open Banking and other overlaps is perhaps the biggest surprise, along with the closure of JROC. But, given the slow pace of progress so far, it’s understandable that the government has lost patience and is giving the reins to the FCA to ensure better coordination between public and private sector initiatives. The UK led the way in Open Banking, but progress since then has been discouragingly slow. With JROC now being wound down, hopefully this move by the FCA means that we will get faster agreement on viable commercial models so that the UK can build on its reputation as an Open Banking pioneer. We welcome the FCA’s role in Open Banking and trust it will drive innovations like Variable Recurring Payments (VRPs). Collaboration between the FCA and PSR will be key to success.”
Kats said the focus on Big Tech and APP fraud is a positive step and this is what the payments industry has wanted for some time as most fraud emerges from big tech platforms and accountability is needed.
“We know that regulators have a difficult job – balancing regulation with competition is no easy task. Tightening regulations inevitably leads to innovation being squeezed. Too little regulation leaves room for unscrupulous or inadequate services, to the detriment of consumers. We support the government’s outcomes-based approach, which balances fraud prevention with better customer experiences, as shown іn updates tо Strong Customer Authentication rules.”
In Kats opinion, the National Payments Architecture may “future proof” UK Payments but could also undermine competitiveness due to potential delays.
“We welcome the news that the government is establishing the Payments Vision Delivery Committee, which will lead the way in making this vision a reality. We encourage fintechs, banks, and regulators to work with the Payments Vision Delivery Committee to ensure diverse input and focus on scalability,” said Kats. “Ultimately, we can now see the practical steps that the government intends to take as outlined in the Vision. If the UK is to keep its reputation as a world-leading hub of innovation, competition, and security, it’s imperative that all of us – Fintechs, banks, regulators, and government – all pull together to make this Vision a reality.”
