Continuing our series on account-to-account payments, Jeroen De Marteau, Lead Associate in our policy division, explores how the payments industry can minimise payment risks and put in place the right processes to ensure that people feel safe when using account to account payments – including retail transactions. 

As Kate Fitzgerald, our Interim Head of Policy, set out in her previous blog, we believe there are four issues that need to be addressed to promote account-to-account retail transactions using open banking. In this blog, we take a deeper look into the need for an effective dispute process:


Operational and technical standards meet the functional requirements for retail transactions. This, for example, includes the ability for the retailer to support subscription payments.


Consumers are suitably protected when making account-to-account payments. All parties involved in the transaction act together to minimise payment risks, and put in place the right processes to ensure that people feel safe when using account to account payments because they know what will happen if things go wrong.

Sufficient access and reliability

People and businesses feel comfortable making and accepting account-to-account payments because they are quick and convenient. This means that there is sufficient availability across the end-to-end journey for a retail transaction and customer drop-outs are at a low level.


Account-to-account payments support competition and provide commercial opportunities for businesses involved in the transaction. A sustainable pricing model for retail transactions ensures firms can continue to invest in new products and further innovation that benefits people and businesses.

Confidence is a key component of a successful payment system. People, whether making or receiving a payment, need to be confident that their payment service provider (PSP) will manage any risks associated with their payments effectively, otherwise they’ll be reluctant to use the service. But it’s also important to recognise that everyone has a role to play. Payment system operators (PSOs) need to consider their role in setting clear rules to support the dispute process. PSPs, retailers and consumers need to work together to detect and prevent problems. And if a problem does arise, everyone needs clarity on how they can resolve it.

This requires everyone involved in a transaction to communicate clearly, with processes that enable them to minimise harm and resolve disputes. The question is, do the current arrangements for account-to-account retail payments achieve all this?

The retail context introduces factors which add risk, such as the quality of goods and services sold, the delivery timeframe for those goods and services, and counterparty risk related to the retailer (i.e., when they do not fulfil their obligations to their customers). It also introduces scenarios where the liability is concentrated with the sending bank, even though other parties can play a role in managing the risk (such as payment initiation service providers (PISPs) and receiving banks). The misalignment of incentives can reduce the likelihood that the payment will be successful, as the sending bank could try to compensate by adding more security checks which add friction to the customer journey.

We, in our capacity as co-chair of the Joint Regulatory Oversight Committee, have asked the Strategic Working Group (SWG) to explore a number of retail scenarios to see if improvements could be made to system rules to minimise risk and resolve disputes effectively. These scenarios take into account what might happen when you buy goods or services.

Before things go wrong, we need to ensure that all parties have the right information to assess risks and make effective decisions to prevent harm. While the sending bank will have access to information to assess the consumer’s authenticity (as their own banking customer), they are likely to have less data on the retailer. However, the receiving bank and PISP could hold information about the retailer that would allow the sending bank to make a better decision. We want the industry to consider how sharing additional data and providing assurances could improve risk decisions – and this will need to be aligned with discussions on account-to-account functional capability and the delivery of the New Payments Architecture.

Using account-to-account payments for retail transactions introduces several refund scenarios. For an uncontested refund, where the retailer agrees that the consumer should be reimbursed, we will need to consider whether the right processes are in place to do this effectively.

Things are more complicated for contested refunds, where the retailer disagrees that a refund is warranted. For these cases a clear process will be needed to ensure disputes can be resolved fairly and efficiently. We want the SWG to explore who is best placed to provide this resolution. This will include considering what implications funding, participation, and operational requirements will have for promoting the adoption of account-to-account transactions for retail payments.

Finally, there are situations where there is no longer money available to refund the consumer. This could be because the retailer was acting fraudulently or because they have filed for bankruptcy. For these complex scenarios, we want to explore whether additional protections may be needed and how liability rules can be assigned to incentivise all parties to minimise the risk of harm. Should the sending bank, receiving bank and PISP hold joint liability in areas where they all have a role to play in mitigating risk (for example, to determine whether the retailer is acting in a malicious way)?

There is much to discuss on this topic, and we’re looking forward to working with the SWG and our wider stakeholders to get insight and input across these critical areas. We know people’s opinions will vary; we’re keen to have an open and transparent conversation so that account-to-account payments can be developed further to provide a wider choice of payment options.

If you’d like to tell us how effective dispute processes can help unlock account-to-account retail payments, please contact us at