Government supports Faster Payments System
In recent months there have been a number of different Government consultations underway, on a wide range of subjects. One area under consideration was payments processes, and the Treasury has now confirmed that they will support the rollout of a Faster Payments system. This will also include the improvement of cross-border payments.
We’ve spoken a lot over the last year about Open Banking, mostly in connection with the impact it has had on Bank Feeds and security, but it’s now going to impact how we make and receive payments. Consumers will be able to use Open Banking to make payments for goods and services directly from their bank accounts, rather than using debit or credit cards. It’s felt that this will encourage competition between payment providers and opportunities for innovation by finance companies.
As part of the process the legislative and regulatory framework for payments will need to improve and develop, amongst other reasons to ensure the protection of consumers and resilience of payments systems.
The Faster Payments System will also need to tackle issues such as reimbursement and liability requirements, to prevent fraud and loss. It will require significant improvements to existing technology, to allow for refunds as well as payments, repeating payments and all of the other variations involved.
Pay.uk is the payment systems operator in the UK, operating the national retail payments system, BACS, Direct Debit, Faster Payments and the Image Clearing System, which is how cheques are paid and cleared. They will have responsibility for developing and driving the changes in the Faster Payments System.
The rate of change we’ve all experienced in the last few years is only going to increase. It’s not that long since we all had cheque books, now we’re using options like ApplePay without any thought. Faster Payments will change the landscape again!