June 2021
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This conference focused on the next steps for the UK digital payments sector.
The discussion took place in the context of a range of developments, including the Treasury’s Payments Landscape Review and the Payment Service Regulator’s reviews into consumer safety.
We were very pleased to be able to include keynote contributions from: Tony Craddock, Director General, Emerging Payments Association; Natalie Ceeney, Chair, Access to Cash Review and Chair, Innovate Finance; Genevieve Marjoribanks, Head of Policy, Payment Systems Regulator; Jon Maskery, Partner, PwC; and Christina Segal-Knowles, Executive Director, Financial Market Infrastructure, Bank of England.
Sessions in the agenda looked at:
- the evolving landscape for digital payments - innovation, adoption, and market dynamics
- the future of cash - access (including via cashback following the Financial Services Act), financial inclusion, and the impact of the COVID-19 pandemic
- consumer priorities and market dynamics - competition and choice, and priorities for ensuring security and inclusivity
- the future for regulation
- driving innovation - and the implications of changes taking place in domestic and international markets
- supporting a vibrant payments sector - and the regulatory and delivery challenges for the UK's New Payments Architecture (NPA)
The agenda
- The evolving landscape for digital payments - innovation, adoption, and market dynamics
- The future of cash - access, financial inclusion, and the impact of the COVID-19 pandemic
- ‘The future of payments and moving towards a cashless society’
- Consumer priorities and market dynamics - competition and choice, and priorities for ensuring security and inclusivity
- Regulatory priorities for the UK payment sector
- Driving innovation in the payment industry, and the implications of changes taking place in domestic and international markets
- Supporting a vibrant payments sector, and regulatory and delivery issues for the UK's New Payments Architecture (NPA)
Key areas for discussion:
Key issues:
- the evolving landscape for digital payments:
- the impact of developments in regulation and standards on competition, and wider market dynamics in the sector
- keynote session with: Jon Maskery, Partner, PwC
- regulatory priorities for the UK payment sector:
- keynote session with: Genevieve Marjoribanks, Head of Policy, Payment Systems Regulator
- innovation in the payment industry:
- implications of changes taking place in domestic and international markets
- keynote session with: Tony Craddock, Director General, Emerging Payments Association
The future of cash:
- COVID-19 - the impact of the pandemic on consumer attitudes to cash and digital payment services, with many services and retailers moving to digital payments only
- increasing the contactless payment limit - the impact of the rise announced in Budget 2021 following an FCA review
- at a local level - the role of high street banks and community hubs, such as Post Offices, in supporting access to cash going forward, especially in rural and more remote areas
- policy - potential impact of Government plans for:
- making the FCA responsible for ensuring the cash system benefits consumers and SMEs
- extending access to cashback – following an amendment in the Financial Services Act - which aims to enable access to cash by allowing businesses to provide cashback without purchase
- keynote sessions:
- Christina Segal-Knowles, Executive Director, Financial Market Infrastructure, Bank of England
- Natalie Ceeney, Chair, Access to Cash Review and Chair, Innovate Finance
Key issues for innovation, security and inclusivity:
- Stronger Customer Authentication (SCA) - impact on consumer experience and the security of online payments of implementation, as part of the Payment Services Directive (PSD 2) in the UK
- consumer experience:
- whether more needs to be done to improve security, choice and inclusivity for consumers
- priorities for reviews being conducted by the PSR, aimed at protecting consumers who use payment services
- the Payments Landscape Review:
- priorities for taking it forward following the recent call for evidence
- what more can be done to support the sector to respond to developments in technology and consumer behaviour, and to foster innovation
- promoting competition - discussing next steps, with the PSR market review into the supply of card-acquiring services finding many merchants not pursuing the possibility of savings by shopping around, and either switching or negotiating with their current provider
- DLTs - the UK regulatory approach to cryptoassets and stablecoins - assessing key themes and responses as the Government consults on new distributed ledger technologies
- policy priorities:
- what further action might be needed from policymakers and regulators to support start-ups and SMEs in the UK’s payments and Fintech sector
- the possible role of a Centre for Finance, Innovation, and Technology, as recommended in the review into the UK Fintech sector by Ron Kalifa
The UK's New Payments Architecture (NPA):
- challenges - how best to address issues for regulation and implementation
- impact - implications for large retail banks and potential new market entrants
Background to the discussion:
- HM Treasury’s Payments Landscape Review - with the call for evidence having closed in October 2020, the review is focusing on responding to rapid technology developments and ensuring the UK maintains its status as a country at the cutting edge of payments technology
- Consultation on delivery and regulation of the New Payments Architecture - launched by the Payment Systems Regulator (PSR) into the future delivery and regulation of New Payments Architecture for interbank payments
- The Financial Services Act - which recently received Royal Assent, and includes an amendment put forward by Lord Holmes of Richmond, which aims to enable access to cash by allowing businesses to provide cashback without purchase
- The PSR plans to bolster protections in payments - the PSR launching reviews into consumer protection in interbank payments and authorised push payment scams as part of ongoing work to give greater protection to everyone using payment services
- Market review into the supply of card-acquiring services - the PSR is due to publish its final report in late 2021, following its interim report in September 2020
- FCA confirms the increase in thresholds for contactless payments - also announced by the chancellor in the Spring Budget, the contactless limit will now be set at £100 from £45, and the threshold for multiple transactions will be raised from £130 to £300
- Payments after the Covid crisis - emerging issues and challenges - a Bank of England speech, which covered the need for payments to be secure and reliable, how people’s attitude to payments has changed over the pandemic, and the role of central banks
- Government outlines approach to protect future of cash - including plans to consider offering cashback in shops without the need to make a purchase, and to give the FCA overall responsibility for the UK’s retail cash system
- The future of access to cash - ongoing work by the FCA aimed at ensuring consumers can access cash if they need to
- the Kalifa Review of UK FinTech - the recently published independent report by Ron Kalifa, which identifies priority areas to support continued innovation in the UK’s Fintech sector
- The UK’s ongoing commitment to sustainable finance - with the Government being a member of the International Platform on Sustainable Finance (IPSF)
- the creation of a Central Bank Digital Currency Taskforce - jointly created by the Bank of England and HM Treasury, the Taskforce will engage with stakeholders to consider the benefits, risks, and practicalities of whether to introduce a Central Bank Digital Currency in the UK
Policy officials who attended:
Our forums are known for attracting strong interest from policymakers and stakeholders. Places were reserved by officials from BEIS; the Competition and Markets Authority; the Department for Digital, Culture, Media & Sport; the Department for International Trade; Department for the Economy, NI; the Department for Transport; the Government Legal Department; HM Revenue & Customs; HM Treasury; Information Commissioner's Office; Ofcom; and The Scottish Government. Other attendees included representatives from Afore Consulting; Amazon; Australian Payments Network; Baker Botts; Bank of England; Barclays Bank; Deloitte; Expleo Technology; Fingleton; Frontier Economics; FTI Consulting; Google; LINK Scheme; Pay.UK; Payment Systems Regulator; PayProp; RPC; Santander; Sony Interactive Entertainment Europe; The AA; Tink; Travers Smith; UK Finance; University of Bristol; University of Glasgow and University of Stirling.
A press pass was reserved by a representative from Global Government Fintech.
