Good afternoon, I’m Chris Hemsley and I’m the Managing Director of the Payment Systems Regulator.
In the lead up to giving this speech, I've been thinking about the ways I’m making payments. As you’d expect from the Payment Systems Regulator, I feel pretty confident using different payment methods for different types of scenarios. I carry cash, I'm set up for mobile payments, I make purchases – both in person and online – using my card, and I’m able to transfer money using my online banking.
But, the way I made payments adapted as the extent of the lockdowns inflicted by the pandemic took hold. I pretty much relied on using cards and direct bank payments.
That made me think – if you cast your mind back 18 or 19 months to the beginning of the pandemic, one of the sectors hit hardest was the charity sector.
The move towards digital, meant that those organisations which relied on casual cash donations saw a drastic decline in their collection pots.
However, through collaboration via open banking, a new initiative saw QR codes being deployed to allow you to donate to a charity in less than a minute – helping charities to collect donations.
And so, with that reminder about the importance of innovation at what was a pretty bleak time, I want to talk to you about the importance and future of Open Banking.
The potential of Open Banking
The UK is at the forefront of Open Banking, it enables innovation and increased productivity in our economy. But it is worth considering how it might realise this potential and what we need to do to make it happen.
I think it is useful to distinguish between two broad ways that Open Banking brings these benefits. First, the benefits that come directly from the use-cases it can support.
But, second, there are also the wider strategic reasons for wanting to make the best use of the opportunity provided by Open Banking, due to the impact it can have on supporting a vibrant and competitive payments ecosystem. One part of this comes from the potential to support retail purchasing and allowing for more flexibility for all payment services. But, to do this, requires a lot more work.
The opportunity for Open Banking to meet the needs of people and businesses
But first, the direct benefits.
Open Banking represents a real opportunity for more user control over payments, lower fraud risks, and new services.
I see very significant benefits from cost savings, speed of settlement, control and safety. And want to walk through a few examples with you to explain why.
Open Banking has significant potential to bring down the costs of payment acceptance for many merchants. Something made all the more important by the increasing cost of card acceptance. We have been analysing this and published our final con