True payment choice must include making digital payments an option for everyone in society as part of a broad mix of payment options.
“Consumers should be able to decide for themselves how they pay. For us, it is important to have a broad mix of options and that efficient methods for payment are available”Burkhard Balz, Bundesbank, Germany.
The Payment System Regulator (PSR) has just published the responses to their discussion paper on the LINK interchange fee structure and together with a summary of a roundtable discussion (Ref CP19/5).
The PSR summarises the status of its review as:
“Having a good choice of how to make payments, in ways that work for everyone, is important for all of us. Our overall objective is to support cash access which meets the needs of anyone making payments, including widespread geographic access for UK consumers who need or want to use it as a payment method.”PSR CP19/5
The PSR are looking at the structure of LINK interchange fees, the description and framework for considering the costs of providing ATMs, the value they provide, factors to take into account when analysing incentives to provide ATMs, incentives and impacts of the existing LINK interchange fee arrangements and what structure of interchange fees would have appropriate incentives.
These next steps focus solely on the preservation of cash. There is nothing wrong in itself about this but with a significant shift to cashless payments underway we must also think about making digital payments an inclusive and accessible choice for everyone.
The PSR are now taking the submissions to both Calls for Views and discussions with stakeholders at roundtable events to further help shape their understanding and inform their work. As the PSR does this there is one key aspect that must not be forgotten in the pursuit of real payment choice.
We must not forget the strategic Access To Cash Review recommendation that looked firmly to an inclusive and innovative cashless future. The review included the following key strategic recommendation:
“Make digital payments an option for everyone”Access to Cash Review, March 2019
The UK’s transition to a cashless society is significant and gathering real momentum. Without inclusive and accessible solutions that make digital payments an option for everyone there is a danger that those who today rely on cash for their day to day payments will be left behind by a significant shift in payments driven by a generation of cashless natives.
As an example of an inclusive and accessible shift to digital payments we have today seen an announcement that Big Issue vendors have joined the contactless revolution. Sellers of the Big Issue, a magazine sold by the homeless on high streets across the UK, are now able to accept contactless payments cards following successful trials with Swedish mPOS vendor iZettle. The trial scheme, conducted across five cities in the UK, resulted in cashless payments taking an 80% share of all sales. And one vendor in London said that offering contactless payments has enabled him to “fit back in society”. With the Big Issue’s backing, iZettle is making card readers available to vendors across the country for the reduced price and offering a a per-transaction fee “significantly lower” than its standard rate – a fantastic example of inclusive and accessible action making digital payments a real payment choice.
As the PSR take forward the different strands of work to ensure appropriate access to cash it is important that regulators, government and industry also seek to proactively ensure that the cashless revolution is inclusive and accessible and that digital payments are truly an option for everyone.