The political gears have started to turn, and chattering about the next general election in the UK has begun. But before the UK’s political parties release their party manifestos in the Autumn, The Payments Association, the organisation promoting innovation and collaboration across the payments industry, has revealed its own ‘Payments Manifesto’.
The Payment Association manifesto is aimed at the many UK companies running both regulated and unregulated services in the payments industry, as well as all public and private sector organisations and their customers who depend on the UK payments industry to pay and get paid.
The manifesto sets out three pledges regarding:
- Tackling fraud and scams
- An innovative approach to regulation and standards
- Encouraging account-to-account payments in the UK
In his 2023 Mansion House speech the Chancellor of the Exchequer, Jeremy Hunt, released The Future of Payments Review, explaining: “Payments are essential to the UK’s economy – to people, to businesses – and are a major source of the UK’s competitive growth, at the heart of a dynamic and changing financial services sector.”
Tony Craddock, director general of The Payments Association, also discussed the launch of the manifesto: “Our aim is for the UK payments industry to lead the world in providing innovative solutions that satisfy consumer and business needs, as well as, through the economic contribution our industry makes to the UK, be a driver of social wellbeing and economic growth.”
“This vital piece of work is our declaration to industry stakeholders that we’ll achieve this aim while also providing the UK’s political parties with policy suggestions for their own manifestos, ahead of the next general election.”
Protection, collaboration and innovation
Firstly, the manifesto includes a commitment to tackling weaknesses that enable criminals to commit fraud or other economic crimes. Authorised Push Payment (APP) fraud scams, where payments are made between bank accounts, are a £485million issue for the industry to solve.
The Payments Association is calling for cross-industry data sharing (to include financial institutions, Big Tech and merchants) to counter APP fraud, as well as calling for a review of the plans of near-guaranteed payouts to victims of fraud and a 50/50 liability split between the sending and receiving institution.
The manifesto also aims to ensure that the UK successfully strikes the right balance between fostering innovation, encouraging competition and protecting consumers. This includes plans to ensure the Financial Conduct Authority (FCA) and Payments Systems Regulator (PSR) employ a more ‘measured’ approach to regulating payment firms – to encourage innovation and attract more investment.
The Payments Association is also urging the government to hold the FCA to account for providing high standards and consistent supervision of Electronic Money Institutions (EMIs) and Payment Institutions (PIs). It believes that the UK regulator should also invest in the best staff and resources possible to provide a more effective authorisation system for new EMI and PI licence applications and change of control requests, while creating an environment that is inclusive to both established and emerging players.
Promoting account-to-account payments and digital currencies
The third and final pledge includes a recommendation to better promote the adoption of account-to-account payments. To achieve this, the body primarily wants to support the work already done by the Joint Regulatory Oversight Body (JROC) to create a competitive and sustainable open banking ecosystem that delivers alternative payment options for merchants.
Another significant element of promoting account-to-account payments involved developing a system for open banking payments that provides appropriate consumer protection and a dispute resolution service that protects all open banking stakeholders, supported by the appropriate economic model.
Craddock discussed this pledge: “We’ve achieved a great deal with open banking already, so let’s not reinvent the wheel. Let’s build on this, leveraging the system’s ability to share data as well as make payments so that people can pay and be paid through to sectors beyond banking such as utilities, travel, investment and hospitality”.
Digital currencies also receive attention in the manifesto, by focusing on creating an innovative digital currencies ecosystem that interoperates globally.
Craddock explains: “Money has always evolved throughout time – it’s an unstoppable historical process. However, there are skeptics with strong views about the adoption of new technologies, particularly within digital currencies. Our duty as an industry is to fight against misinformation and scaremongering in this important area to give the UK the ability to lead the world.”
“The manifesto sets out a clear vision for a globally interoperable digital currencies ecosystem to foster a future where we are all going to transact more digitally, making use of modern technology.”
