Genevieve Marjoribanks Pay360 keynote speech - 18 March 2021


This is the text of the speech as drafted and may differ from the delivered version. This speech was delivered at Pay360 on 18 March 2021.

Thank you for inviting me to speak to you today, and for essentially welcoming me into your homes for the next twenty minutes or so. My name is Genevieve Marjoribanks, and I’m Head of Policy at the Payment Systems Regulator. The PSR is the UK’s economic regulator of payment systems, and our aim is to ensure that those systems work well for everyone who uses them, while also promoting innovation and competition.

Our work covers the broad payments industry, from issues such as access to cash, to protecting consumers, to future innovations and developments in payments. But today, I’d like to focus on three of our projects which look at:

  • The future infrastructure that many interbank digital payments will come to rely on here in the UK;
  • The protections we want to be in place now to protect victims of fraud; and
  • Potential protections for interbank payments in the future.

If you’ve heard me speak before, spoken to any of my colleagues, or read our publications, you’ll likely know that the New Payments Architecture, or NPA, is one of our key priorities at the PSR. And of course, you’ll also know about our focus on Authorised Push Payment, or APP, fraud. But one area you may not have heard so much about from us is our work on consumer protections more broadly, and the work we’re doing to identify whether the current offering in interbank payments is sufficient.

This is the text of the speech as drafted and may differ from the delivered version. This speech was delivered at Pay360 on 18 March 2021.

I’ll be talking to you about all three today, looking at how they’re interlinked with the world of digital payments and the steps we’re currently taking on each of these projects.

Digital payments

Given the three statutory objectives of the PSR are to promote competition and innovation in payment systems, and ensure those systems are operated in the interest of the people that use them, it will come as no surprise that consideration of digital payments features in our work frequently!

How can the NPA meet the growing demands for digital payments and support increased competition? What are the implications of digital payments on cash use? How are fraudsters manipulating digital payments to exploit customers? These are just a few of the questions we consider as part of our work on a day-to-day basis.

With the constant evolution and increasing use of digital payments, we have to make sure that our work takes this into account. And the three projects I’m talking to you about today are asking these kinds of questions right now.

New Payments Architecture (NPA)

So, onto the NPA. For those that don’t know, the New Payments Architecture is the payment industry’s proposed way or organising the clearing and settlement of most interbank payments in the future. Whether I’m receiving my wages, paying bills, or – hopefully in a not-too-distant post-lockdown world – transferring my half of last night’s restaurant bill to a friend, interbank payments are essential to the functioning of our economy in the UK.

This work is hugely important, and we’re now at a critical point of the work that Pay.UK is doing in facilitating delivery of the NPA. We’ve been monitoring this work, alongside the Bank of England, to ensure that the NPA is a resilient, secure service that promotes competition, innovation and the interests of the people and businesses that use the system. In turn, this ensures that we have the infrastructure in place to support the development of digital payments for years to come.

Ultimately, the current programme being led by Pay.UK needs to be de-risked. We think that there are unacceptably high risks that the programme:

  • will not provide value for money
  • will stifle competition and innovation in payment services, and
  • will delay realisation of the benefits of the NPA.

I know you don’t just want me to tell you there’s a problem – you want to know what we are actually doing about it at the PSR. Well, in February we launched a consultation to look at reducing risks to the delivery of the NPA.

We’re looking at limiting the initial central infrastructure contract to only those services that are most important to its successful launch. We think a phased approach, where Pay.UK only buys the services needed to migrate Faster Payments for now and deals with the more complex issues around Bacs later down the line, will significantly de-risk the delivery of the NPA. It will make the procurement quicker, easier, and more efficient, and could ultimately mean we can realise many of the benefits of the NPA sooner.

A phased approach also promotes competition, by giving third parties an opportunity to provide services that support the migration of Bacs transactions, rather than procuring these services from a single provider now.

We’re also considering whether taking a different approach to the procurement of the central infrastructure would help lower delivery risks. We think there are three options for Pay.UK for the procurement:

  • Continue with the current tender;
  • Start an entirely new tender; or
  • Directly negotiate with the current provider of Faster Payments and Bacs without a competition.

Of course, none of these options are perfect and the relative challenges and issues of each option need to be considered.

As well as looking at lowering risks to delivery of the NPA, we are also consulting on proposals for mitigating risks to competition and innovation relating to when the NPA is operational, including the role of the PSR’s regulation of the NPA and the firm providing the systems and infrastructure. But the point of the consultation is to gather stakeholder views; we want to know if you support our proposals or have suggestions on how we can best make this work. This is a once in a generation change to the fabric of our payment systems, and it’s vital t