The UK government has published the Future of Payments Review 2023, an independent report which examines how payments are likely to be made in the future as well as the steps needed to successfully deliver leading retail payments.
Among several key recommendations, the report has marked the development of a national payments vision and strategy as a key priority while it has called on more consideration to be given to the nature of government engagement with big tech.
According to the report’s researchers, a more coordinated approach to these relationships could positively impact issues of national security, online harm, artificial intelligence and financial services.
In relation to specific payments journeys in the UK, the report has portrayed a mixed picture. On the one hand, the UK’s mature banking, cards and digital wallets environment, aligned with a well-developed regulatory environment, has helped create a relatively smooth purchasing experience of good and services. This can be made even better by implementing certain Strong Customer Authentication (SCA) requirements, the report said.
On the other hand, there are two significant issues in the retail space: a clunky consumer-to-consumer bank transfer process, which needs to be improved, and the costs of taking card payments. Although this is frustrating many many merchants and retailers, there are a lack of viable alternatives.
The report also puts forward its support of the work to preserve access to cash, noting that digital exclusion may be exacerbating the financial exclusion problem. The review was initiated on July 10 and took place over three months while it was chaired by Joe Garner, the former chief executive of Nationwide Building Society, the UK’s largest mutual financial organisation.
In his foreword to the report, he explains: “In the time available, we have sought to provide a high-level, strategic view of the digital payments landscape. We firmly believe that cash can coexist with digital payments and over a third of submissions to our Call for Input highlighted cash as a relevant issue. However, we did not want to duplicate the work already underway on access to cash. Likewise, we have chosen not to focus on other topical issues which are extensively covered elsewhere, including cryptoassets, large corporate payments, Buy Now Pay Later (BNPL) and international payments.
He added: “In terms of in-flight initiatives, we have not attempted to analyse each one, but rather look at the big picture of what they add up to. Throughout I have attempted to listen to all the views – even when contradictory to each other, be led by the data, avoid payments gobbledegook and be clear where I am expressing my own judgement.”
See here for full report
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