UK Payment Systems Regulator Panel Publishes Report on Digital Payments Initiative05/10/2022The U.K. Payment Systems Regulator Panel has published a report on its Digital Payments Initiative, which investigated potential barriers to the take-up of digital payments and possible solutions. The Panel advises the PSR on a continuous basis but undertook the Digital Payments Initiative as a special project to address the issue of consumers failing fully to embrace the benefits of digital payments.
The Panel found that barriers to greater uptake of digital payments include: (i) lack of awareness and understanding of digital payment options; (ii) digital exclusion of some individuals, for example due to low income or other vulnerabilities such as lack of relevant digital skills; (iii) failure of digital payment options to meet consumer and small business needs e.g., for consumers, a perception that digital payments made budgeting more difficult and for small businesses, delays in processing of digital payments which inhibit cash flow; and (iv) a lack of data on barriers to the take-up of digital payments.
The Panel made five high level recommendations and seven technical recommendations to address the barriers it observed. These included that the PSR should: (i) engage with industry to encourage consistent use of terminology to bolster consumer and merchant familiarity with digital payment terms; (ii) adopt a regulatory oversight role alongside the FCA to encourage the development of open banking payments; and (iii) ask the Open Banking Implementation Entity, the U.K. body responsible for open banking oversight, to consider updating its Customer Experience Guidelines so that banks can show a customer's balance in all payment journeys. The PSR intends to engage with industry and relevant authorities on the report's findings, including via a workshop scheduled for June 2022, and will respond to the Panel's recommendations later in the summer.
Return to main website.ATTORNEYS: Chloe Barrowman, Thomas Donegan
TOPICS: Consumer Protection, Payment Services
Financial Regulatory Developments Focus