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Future of Payments Review: Industry’s Optimism Tempered by Real-World Challenges

The Future of Payments Review, led by industry veteran Joe Garner, former CEO of Nationwide Building Society, took centre stage this week alongside Chancellor Jeremy Hunt’s Autumn Statement, positioning itself at the forefront of the transformation of the UK’s payment landscape.

Future of Payments ReviewOver the span of three months, Garner and his team have ignited discussions that promise to redefine payment experiences in the UK. Commissioned by HM Treasury, the review has engaged with around 150 stakeholders from various sectors, including financial institutions, fintechs, Big Tech, regulators, retailers, as well as consumer groups.

The objective was to assess consumer retail payment journeys and the future of payments in the UK. Garner also emphasised the critical role of payments in the economy and everyday life.

“A world class payments ecosystem is essential – not just to the economy – but to the lives of every member of our society. If capital and liquidity are the heart and lungs of the financial ecosystem, payments are the central nervous system,” wrote Garner.

The primary recommendation from the Review is that the Government develops a ‘National Payments Vision and Strategy’ to bring clarity to its future desired outcomes for UK payments. A key aim of this strategy is to simplify the landscape. Although total payments have grown slowly over time to £47.5billion last year, there have been rapid shifts – most notably from cash to debit cards. In addition, payments through the
Faster Payments System have also grown as they have progressively also replaced cheques.

The Review also highlights that:
  • A world-class payments ecosystem is essential for economic growth and societal wellbeing. It must be resilient, reliable, secure and convenient.
  • The UK’s payments environment is strong today, marked by security, innovation and regulatory maturity.
  • However, there is a lack of a clear vision and strategy for the UK’s payments landscape, hindering confidence in achieving coherent outcomes.
  • Consumer shopping experiences in the UK are generally positive, but challenges exist in consumer-to-consumer bank transfers and merchant card payment costs.
  • Open banking holds promise for improving bank transfers and providing alternatives to card schemes, but challenges include consumer protection and commercial arrangements.
  • Regulatory alignment and efficiency are essential for innovation.
  • Coordinated government engagement with Big Tech can ensure mutually beneficial partnerships.
Reaction to the Review
Token.io’s vision for open banking
Charles Damen, Chief Product Officer at Token.io
Charles Damen, chief product officer at Token.io

Charles Damen, the chief product officer at Token.io – a company that enables payment providers to offer Pay By Bank services, largely welcomed the Review’s endorsement of open banking’s role in fostering competition and innovation in the UK’s payments landscape.

He highlighted the potential for Commercial Variable Recurring Payments (CVRP) to provide consumers with a better user experience and merchants with cost savings. He also stressed the importance of avoiding disruptions to the third-party provider (TPP) community.

“By endorsing the wider use of open banking to boost competition and innovation, and calling for a focus on open banking as the primary solution for providing a viable digital alternative to card schemes, the recommendations set forth today in the UK’s Future of Payments Review will help the country capture a world leading position in retail payments.

“To realise this potential, however, a scheme-like approach built upon mutually beneficial commercial models for UK banks and fintechs is needed to support premium open banking services — one that can support better user experiences, enhanced consumer protections, and deliver awareness and trust-building measures such as a Trust Mark.”

However, Token.io believes that the evolution of open banking in the UK should move from mere ‘compliance APIs’ to ‘compliance and commercial APIs’. Furthermore, Token.io highlights the importance of maintaining the baseline of basic, free-to-use functionality while building premium functionality on top of it.

“Regulation may have helped the UK to establish its position as a world-leader in open banking, but we see now that other regions around the world are surpassing the UK in establishing commercial models for the delivery of premium APIs to support functionality like CVRP.”

Call for strong leadership
Tony Craddock, director general of The Payments Association
Tony Craddock, director general, The Payments Association

For Tony Craddock, director general of The Payments Association, an industry organisation that plays a significant role in the payments sector, the underlying theme of Garne’s review resonates strongly with The Payments Association’s Payments Manifesto.

Craddock outlined the importance of leadership and collaboration among stakeholders, while recognising the potential benefits of the review’s recommendations, including stronger security, less fraud and more innovation. He urged ongoing government involvement in the payments sector.

“At last! An independent report that shines a spotlight on payments and provides the guidance the industry and its regulators so badly need,” said Craddock. “If we can implement the recommendations of the Garner Report we will steer clear of the cliff edge and help to re-establish the UK’s leadership in payments. Everyone will benefit – from greater security, lower fraud and a more innovative payments ecosystem.”

Push for open banking legislation
Pat Phelan, MD of UK and Ireland and chief customer officer at GoCardless
Pat Phelan, MD of UK and Ireland and chief customer officer at GoCardless

It is “encouraging to see Joe Garner identify open banking as the primary solution” for resolving the issue of high card fees that are “hurting our economy”, according to Pat Phelan, MD of UK and Ireland and chief customer officer at fintech GoCardless.

“The Future of Payments Review echoes what we’ve been saying for years,” said Phelan. “Through the work of the Joint Regulatory Oversight Committee (JROC), the UK has already been exploring the issues highlighted by the Review, which are fundamental to driving mass adoption: a great open banking user experience, consumer protection and the right incentives for everyone in the ecosystem.

“We’ve spent hundreds of hours discussing these issues with banks and the regulators – landing on the right solutions will be critical to the success of open banking in the UK. We look forward to seeing legislation for a long term framework for open banking in place next year, as the Government is promising.”

Simplifying the congested payments landscape
Jana Mackintosh, managing director of payments, innovation and resilience at UK Finance
Jana Mackintosh, managing director of payments, innovation and resilience at UK Finance

Jana Mackintosh, MD of payments, innovation and resilience at UK Finance, the trade association for the UK banking and financial services sector, also acknowledges the strength of the UK payments market and agrees with the need for simplification highlighted in the Future of Payments Review.

“While we have a mature cards market in the UK, we know there could be more room for choice and innovation. Open banking could play a key role. As the industry continues its work on the future of payments, protecting customers and enhancing the payments journey will remain priorities.

“We look forward to continuing our work with government, regulators and members to keep our payments system safe, improve the UK market and deliver better outcomes for users.”

Embracing technology
Peter Harmston
Partner, head of payments consulting, KPMG UK

Peter Harmston, a partner and the head of payments consulting at KPMG in the UK, said that KPMG’s analysis suggests the Review sets out a “sensible and comprehensive set of recommendations to set up our industry for successful innovation in payments, and ensure the UK remains at the forefront of customer experience, stability and investment around the world.”

However, he also added that the global professional services and advisory firm believed “some stakeholders across the industry would have been expecting this Review to go further in terms of prescriptive regulatory changes, ecosystem ways of working, or prioritising the various industry initiatives underway”.

“Delivery of the Review is an important milestone, however the Government now has significant decisions to make, and a vast body of work to develop a tangible plan for implementation,” Harmston also added. “There remains no formal regulatory impetus for firms to take proactive action in progressing these recommendations, and the onus will fall to the government, regulators and the industry to collective work together to drive action.”


  • Claire is an experienced editor and writer with 25 years of experience in the publishing industry. As a tech journalist, Claire has covered every subject possible over the years, from the launch of broadband and next generation mobile networks to the arrival of the metaverse and Web3.

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