Payments industry and regulatory round up

 A round-up of payment related developments at Pay.UK, the Payment Systems Regulator, the Bank of England, HM Treasury, the FCA and the Open Banking Implementation Entity.

Period covered: 20 March to 6 April 2022.


Current Account Switch Service annual report: continued progress in 2021

The Current Account Switch Service achieved all its regulatory KPIs in 2021, while the total number of current accounts switched across the year was 782,223, as outlined in its Annual Report published today. The Service has now facilitated more than seven million switches since its launch in 2013.

This was a successful year for the Service in meeting all of its regulatory KPIs: 99.8% of switches were completed within 7 working days and consumer satisfaction averaged 92% across the year. As Britain moved towards recovery following the pandemic, 76% of consumers said they were aware of the Service, exceeding the overall awareness target of 75%. 

Webinar – Why Request to Pay is needed now more than ever

Pay.UK hosted a webinar on the 4th April to discuss what impact Request to Pay can have on UK bill payments for organisations and consumers, especially in today’s rapidly changing landscape.

Here’s a link to the ‘on demand’ video:

Is the tide turning on brand loyalty as cost-of-living crisis hits?

Mounting price pressures are making many re-evaluate the brands they love. Despite sticking with their favourite products and services, a growing number of people say the need for better value is now an increasing need as prices rise.

  • 55% of consumers remain just as loyal to their preferred brands as before the pandemic began. However, two fifths (39%) are now looking for better value for money when it comes to some of the goods and services they purchase as the cost-of-living crisis hits.
  • Similarly in the current account market, 33% claim to be very loyal to their existing provider, but nearly one in five (18%) feel that the cost-of-living crisis is forcing them to seek out more help like additional overdraft facilities. One in ten (10%) believe that they now need banking services that can help them better track their spending.
  • Jo Ainsley, Senior Service Lines Manager at Pay.UK discusses the current account switching process and Consumer psychologist, Kate Nightingale, offers her top tips for those looking to break their brand loyalty, and shares insight into the psychology behind switching.


Upcoming bank holidays make planning business payments essential

Pay.UK have been encoring Bacs Direct Debit and Direct Credit users to plan ahead:

As we head towards a number of bank holidays during spring and early summer 2022, Pay.UK, which runs the Bacs Direct Credit and Direct Debit payment systems, is reminding businesses to plan ahead to avoid missing, or delaying, important payments.

With bank holidays being non-processing days, businesses need to factor these into their scheduling, while organisations are also being encouraged to take advantage of the ability to submit payment files up to 30 days in advance.

Next month sees bank holidays on both Good Friday (15 April) and Easter Monday (18 April), meaning that if payments are scheduled to credit or debit accounts on the last working day before Good Friday, then the latest date for submitting payment files is Tuesday 12 April.

Similarly, if payments are due on the first working day following Easter Monday, then the latest submission date for payment files is Wednesday 13 April.

Looking further ahead, businesses will also need to make provision if payments fall around the early May bank holiday (Monday 2 May), or the Queen’s Platinum Jubilee long bank holiday weekend (Thursday 2 and Friday 3 June).

Payments Tracker

In the latest edition of the Payments:Unpacked Tracker we unpack the latest volumes and values of payments processed in the UK through the Bacs, CHAPS, Faster Payments, Cheque and Debit / Credit Card schemes.

Board Minutes

  • 26 January 2022 covering: Diane Cote has joined the Board as a NED, minutes highlight the need for timely actions to address the s.195 matters that had been identified, operational resilience, Bank of England Annual Risk Letter (“no Priorities had been set in the Annual Risk Letter, which was relatively unusual”), ICS contract extension approved, changes to Current Account Switching KPIs agreed for 2023 and reference to the large sums being spent to market CASS being better deployed on areas such as fraud prevention, NPAupdate includes Board support for the NPA RFP, future Board engagement and a draft Business Case, 2022 NPA programme plan, narrowing scope of NPA makes financial payback more difficult to achieve and reduction in price / reduction on fraud being key considerations as well as end user benefits. The minutes end with a fraud update including activity relating to a preventative solution.
  • 16 March 2022 covering: impact tolerances for Bacs, ICS, Faster Payments and settlement & liability plus ancillary services operated by Pay.UK.

Payment Systems Regulator (PSR)

Payment Systems Regulator Annual Plan and Budget 2022/23

At just over 60 pages there is a lot in the Payment Systems Regulator’s 2022/23 annual plan and budget. You’ll find the full document here: PSR Annual Plan 2022/23 and a short factsheet here: PSR Annual Plan 2022/23 Factsheet.

To whet your appetite ahead of reading the PSR’s annual plan you’ll find ten things you need to know about the Payment Systems Regulator’s plan for 2022/23 via the link below:


Anti-competitive conduct in the prepaid card services sector

Following the announcement by the PSR of the conclusion of their investigation into two cartels in the prepaid cards market and their decision to impose fines on five parties for breaking competition law the PSR have now published the non-confidential version of this decision.

Joint statement from HM Treasury, the PSR, FCA and CMA on the future oversight of Open Banking

Following the publication of ‘The future oversight of the CMA’s Open Banking remedies’, the PSR, together with HM Treasury, the FCA and CMA, have today announced the next steps in the future oversight of Open Banking. 

The joint statement published today outlines their plans for oversight of a new entity to succeed the Open Banking Implementation Entity (OBIE). The future entity will build on the significant progress made to date by the OBIE to encourage innovation and support competition in retail banking.  

HM Treasury, the CMA, the FCA and the PSR are working together to provide a vision and propose a constitution for the future entity, ensure a smooth transition from the OBIE, and oversee the new entity once it is set up.  In particular, we expect it to: 

  • Maintain and further develop the existing standards and framework. 
  • Play a central role in delivering new proposals beyond those required by existing regulations, overseen by a Joint Regulatory Oversight Committee, to further support innovation and competition. 
  • Be independent, well-governed and underpinned by a set of values and cultures that include an emphasis on integrity and promoting ethical behaviours, as highlighted by the CMA in its response. 
  • Fairly and effectively take account of the interests of relevant industry and end-user stakeholders, including consumers and businesses. 
  • Ensure it has sufficient resources to carry out its functions effectively. 
  • Be able to respond and adapt to new developments as Open Banking evolves and help in developing future initiatives, including Open Finance. 

This cross-authority work will be taken forward by a new regulatory oversight committee led jointly by the FCA and PSR, with HM Treasury and the CMA as the other members. We will engage, through the Committee, with stakeholders including industry participants and end- user representatives to help in setting the strategic direction and delivering on these objectives. We will set out more detail on this in Q2 2022. 

Board Minutes

  • 19 January 2022 covering: 2022/23 annual plan and budget and 2021 Memorandum of Understanding review.

Bank of England

Six months left to spend your paper £20 and £50 banknotes

The Bank of England will be withdrawing legal tender status of the paper £20 and £50 notes after 30 September 2022, and are encouraging anyone who has these at home to spend or deposit them at their bank or Post Office.

There are approximately £7 billion worth of paper £20 and £10.5 billion worth of paper £50 notes still in circulation. As they are returned to the Bank of England, these are being replaced with the new polymer £20 notes featuring J.M.W. Turner, and polymer £50 notes featuring Alan Turing. After 30 September 2022, the new polymer notes will be the only ones with legal tender status.

Once this deadline has passed, people will no longer be able to spend Bank of England paper notes in shops, or use them to pay businesses. People with a UK bank account will still be able to deposit withdrawn notes into their account. Some Post Offices may also accept withdrawn notes as payment for goods and services or as a deposit to an account accessed via them.

Bank of England and Massachusetts Institute of Technology joint Central Bank Digital Currency collaboration

In February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) agreed to collaborate on a twelve-month research project on Central Bank Digital Currency (CBDC). The Bank will partner with the MIT Media Lab’s Digital Currency Initiative (DCI) team to explore potential technical challenges, trade-offs, opportunities and risks involved in designing a CBDC system.

The collaboration forms part of the Bank’s wider ‘research and exploration’ into CBDC, and will be focused on exploration and experimentation of potential technology approaches. This work is focused on exploratory technology research and is not intended to develop an operational CBDC. No decision has been made on whether to introduce a CBDC in the UK, which would be a major national infrastructure project. Undertaking this type of technical research will help inform wider policy thinking around CBDC.

The Bank will provide an update on the findings and outcomes at the end of this period of research.

Enhanced Payments

HM Treasury

UK regulatory approach to cryptoassets and stablecoins: consultation and call for evidence

Stablecoins are a form of cryptoasset which aim to maintain a stable value relative to other assets. The government has confirmed its intention to legislate to bring certain stablecoins, where used as a means of payment, into the regulatory perimeter.

Joint statement by HM Treasury, the CMA, the FCA and the PSR on the future of Open Banking

HM Treasury, the CMA, the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) have published a joint statement which sets out their plan to establish a Joint Regulatory Oversight Committee to oversee the development of Open Banking beyond the scope of the CMA’s Open Banking remedies.

Financial Conduct Authority

Joint statement by HM Treasury, the CMA, the FCA and the PSR on the future of Open Banking

HM Treasury, the CMA, the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) have published a joint statement which sets out their plan to establish a Joint Regulatory Oversight Committee to oversee the development of Open Banking beyond the scope of the CMA’s Open Banking remedies.

Open Banking Implementation Entity

OBIE welcomes the CMA’s recommendations on the future arrangements for open banking

We welcome the announcements by the government and regulators, and the endorsement it gives for the future of open banking to our thriving ecosystem. There has been significant collaboration in developing the infrastructure, standards and ecosystem that we have in place today. We now need to drive forward competition and adoption to realise the benefits of innovation for consumers and businesses across the UK.

Today’s announcement underlines government and regulators’ commitment to the future success of open banking, and the foundations for open finance and beyond. We will look forward to working with the new Joint Regulatory Oversight Committee over the course of this year.

OBIE’s Trustee and Chair, Charlotte Crosswell

More: OBIE welcomes the CMA’s recommendations on the future arrangements for open banking.

OBIE publishes Open Banking Standard version 3.1.10 and reaches Roadmap milestone

The Open Banking Implementation Entity (OBIE) has published the Open Banking Standard version 3.1.10, which is the final release under the CMA’s revised roadmap.  

After five years, we are proud to have reached the milestone of delivering version 3.1.10 which now contains all the content required to complete the revised roadmap. The standard has laid the foundations for a thriving open banking ecosystem with more than 5 million users. We now look forward to the next phase in the evolution of the standard to support future regulatory changes and market-driven requirements.

Fiona Hamilton, Head of Standards at the OBIE

More: OBIE publishes Open Banking Standard version 3.1.10 and reaches Roadmap milestone.

The OBIE partners with Open Banking Expo Awards for second year running

The Open Banking Implementation Entity (OBIE) is pleased to announce that it is a media partner for the Open Banking Expo Awards for the second year.

The annual awards recognise the innovators, disruptors and visionaries across the globe who have spearheaded the open banking revolution.

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