Treasury has published its Future of Payments Review, commissioned from Joe Garner, as part of the Autumn Statement package. The review asked:
- what are the most important consumer retail payment journeys both today and in the next 5 years?
- for those journeys today, how does the UK consumer experience for individuals and businesses compare vs other leading countries?
- looking at the in-flight plans and initiatives across the payments landscape, how likely are they to deliver world leading payment journeys for UK consumers?
Among key points highlighted in responses were:
- there is still a role for cash to play and it can coexist with digital payments;
- the UK payments landscape is currently in a good position but lacks vision and strategy;
- the UK has a relatively mature banking, cards and digital wallets environment and a well developed regulatory environment; and
- Open Banking offers many good things, but lacks appropriate consumer protection and necessary commercial arrangements.
The review recommends several action points including:
- to articulate a clear strategy;
- to support continued use of cash;
- to improve the consumer-to-consumer bank transfer process, which is “clunky” in comparison to international competitors;
- to consider what could make the consumer process even smoother at point of purchase;
- to reconsider how SCA can work best from an outcomes-based perspective;
- investigate what might be done to address the costs of taking card payments and lack of viable alternatives;
- that Treasury and FCA regularly assess whether digital exclusion is leading to financial exclusion;
- to provide at least a minimum form of dispute resolution for Open Banking;
- to explore an alternative payment journey in Open Banking to give retailers choices beyond card schemes (and for the PSR to complete its work on card scheme fees);
- that the PSR should review the new APP fraud rules 12 months after implementation;
- that more ambitious targets to prevent financial crime should be set; and
- that Treasury and the regulators review whether regulation is applied appropriately to Fintechs.