On 19 October 2021, Genevieve Marjoribanks, Head of Policy, gave a keynote speech at the Annual Payment Systems Regulation and Innovation Summit. This is the text of her speech as drafted.
Good morning and thank you for inviting me to speak to you today.
We’re at a real turning point when it comes to digital. Digitisation is touching almost every aspect of our lives - I’m speaking to you from my home because of the technology available to make that possible.
If you’ve had to speak with a doctor, the chances are, you’ve done that digitally. If you’ve bought a ticket to use public transport, you’ve probably been encouraged to pay using a card, or through a digital wallet on your phone.
We’ve bought more things online as the effects of the pandemic hit and physical shops couldn’t open, and this has presented retailers with new opportunities.
And payments are no exception when it comes to embracing new opportunities to make payments digitally.
If anything, the pandemic sped up the preferences that people have for digital.
But we must remember that cash is still important and will continue to be for some time to come and there will be opportunities to explore how we can.
Of course, the PSR is keeping a close eye as payment system developments evolve to make sure they are delivering for everyone who uses them. Today, I’m going to talk to you about where our work embraces the new digital frontier.
We recently set out our proposed strategy and in it we highlight a particular risk that we see in payments – on competition.
It’s essential that we unlock the potential of the interbank systems. We think that using bank to bank payments when making a purchase in a shop are going to become increasingly popular and will provide both consumers and retailers a good alternative to cards and cash.
This will mean there need to be some adjustments made to the infrastructure that supports these payments. That's not straightforward and will take some time. But we’ve started on that journey – just look at the immense amount of work that has gone into the development and delivery of the NPA.
For those that don’t know, the NPA is the payment industry’s proposed way for organising the clearing and settlement of most interbank payments in the future.
So, whether I’m receiving my wages, paying bills, or 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.
We also need to make sure consumers have confidence in using interbank payments – which means getting the right level of consumer protection. This is reflected in our recent work.
A viable alternative to card schemes in retail payments would mean a more competitive market that requires less regulatory intervention in the longer term. But in the shorter term we might still intervene, including if scheme fees and interchange fees continue to rise unchecked.
Achieving diversity in payments places significant importance on the role of Pay.UK. In particular, we need the central systems and – importantly – the scheme rules and charges to promote competition.
And of course, another benefit of the NPA is the shift it will bring to the introduction of new messaging standards.
The PSR has spoken before about the use of effective data – that has standards that can be common and accessible. Indeed, the effective use of data to spot frauds is one of the measures we have been looking at. So, as the payment infrastructure at the heart of UK payment systems is replaced, the industry also has an opportunity to improve the amount of information contained in the messages between banks.
By upgrading our interbank payments services to use the ISO20022 messaging standard, and enabling other enhancements contained in the Payments Strategy Forum’s Blueprint, such as promoting innovation through the use of APIs, we will help maintain the UK’s position as a payments leader.
We believe that ISO20022 will help facilitate innovation and provide new o