未来付款审查（英）

REPORT

–NOVEMBER2023Future

ofPayments

ReviewAuthor:JoeGarnerA

special

thankyou

to:Andto

themorethan100organisationswhocontributedto

thisreport,

including:CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXContentsForeword0508ExecutivesummaryHigh-levelconclusions,summaryofrecommendationsandpointsforconsiderationBackground1521SettingthesceneinwhichtointerpretthisreviewOverviewPrimaryrecommendationsincludingforaNationalPaymentsVisionandStrategyConclusions31ConsumerExperienceandopportunitiestoimproveConclusion1:Consumerspendinginperson3131Conclusion2:Consumerspendingonline3742Conclusion3:AddressingdigitalandfinancialexclusionOpenBankingandopportunitiestoexploitmorefullyConclusion4:AddressingtheconsumerprotectiongapConclusion5:Improvingperson-to-person

payments4848546471Conclusion6:ProvidingpaymentschoicetoretailersandmerchantsConclusion7:

MakingthecommercialarrangementssustainableRegulatoryOversightandAlignmentopportunitiesConclusion8:Tackling

fraudsandscams78788589Conclusion9:StreamliningtheenvironmentforfintechopportunitiesConclusion10:Aligningandprioritisingregulatoryandindustry

initiativesGlobalAnnex96Key

internationalinsightsthatemergedthoughthisworkCONTENTS

/FuturePaymentsReview3Fo

rewo

rd4FuturePaymentsReview/

INTRODUCTIONCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXForewordThisreview

wasinitiated

onJuly

10

of

this

year

andoverththelastthreemonths,Iandasmall

team

have

consultedwithc.150

people.

We

have

conductedroundtablesandlistenedto

views

from

largeandsmall

financialinstitutions,Fintechs,

Big

Tech,

Telcos,

ConsumerGroups,12Regulators,Retailers,MerchantsandTrade

Associations.Additionally,

we

received

over

60

submissionsto

ourCall

for

Input.3Iamextremelygratefulfortheopenandenthusiasticwaythatfirmsandindividualshaveengagedwiththisprocess,andIwouldliketothankallthoselistedontheprecedingpagefortheircontribution.We

havealsorunsomelimitedprimaryresearchandconductedfocusgroupstoensurethatwehaverigorouslyconsideredtheconsumerviewthroughout.Iwouldliketopaypersonalthankstokey

contributors,namelyAccenture,BaringaandtoEYinparticularfortheirinsightfulsupportthroughoutthisreview.Responses

across

different

stakeholder

groups8%BigTech

and

Fintechs–27%3%3%Industry

bodies

–11%27%Banks

and

buildingsocieties–10%Schemes

and

networks

–10%Individuals

–10%4%6%Merchantgroups

–8%Consumer

groups

–6%Consultancies–4%8%11%Regulators–3%Other

governmentbodies–3%Other*

–8%10%10%10%*The

‘Other’

category

includes

responses

that

were

immaterial

or

insignificant1FinancialTechnologyfirmsTelecommunicationfirms23FutureofPaymentsReview–CallforInputFOREWORD

/FuturePaymentsReview5CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXOurterms

of

reference

ask

three

questions;41Whatarethe

mostimportant

consumerretailpaymentjourneysbothtodayandinthe

next5years?2Forthesejourneystoday,howdoesthe

UKconsumerexperienceforindividualsandbusinessescomparevsotherleadingcountries?3Lookingatthe

in-flight

plansandinitiativesacrossthepaymentslandscape,howlikelyaretheytodeliverworldleadingpaymentjourneysforUKconsumers?Inthetimeavailable,wehavesoughttoprovideahigh-level,strategicviewofthedigitalpaymentslandscape.We

firmlybelievethatcashcancoexistwithdigitalpaymentsandoverathirdofsubmissionstoourCallforInputhighlightedcashas

arelevantissue.However,

wedidnotwanttoduplicatetheworkalreadyunderwayonaccesstocash.

Likewise,wehavechosennottofocusonothertopicalissueswhichareextensivelycoveredelsewhere,includingcryptoassets,largecorporatepayments,BuyNowPayLater(BNPL)andinternationalpayments.Intermsofin-flightinitiatives,wehavenotattemptedtoanalyseeachone,butratherlookatthebigpictureofwhattheyaddupto.ThroughoutIhaveattemptedtolistentoalltheviews–evenwhencontradictoryto

eachother,beledby

thedata,avoidpaymentsgobbledegookandbeclearwhereIamexpressingmyownjudgement.ThroughmyexecutivecareerIhaveexperiencedtheimportanceofpaymentsfromvariousperspectivesincluding;as

founderofastart-upintheboom,

adirectorattheretailerCurrys,

CEO

ofBT’sOpenreach,andfinallyatbothHSBCUKandNationwideBuildingSocietyas

CEO.

Ifcapitalandliquidityaretheheart

andlungsofthefinancialecosystem,paymentsarethecentralnervoussystem.Aworldclasspaymentsecosystemisessential–notjusttotheeconomy–buttothelivesofeverymemberofoursociety.Ithasbeenagreatprivilegeto

leadthiswork,andIverymuchhopethatitwillmakeameaningfulcontributiontothefurtherenhancementofourcurrentstrongpositiontodayintheUK.Joe

Garner

–www.joegarner.co.uk4.uk/government/publications/future-of-payments-review-2023/terms-of-reference-future-of-payments-review6FuturePaymentsReview/

FOREWORDE

xecutivesummar

yEXECUTIVE

SUMMARY

/FuturePaymentsReview7CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXExecutive

summaryAworld

leading

paymentsenvironmentis

vitalfor

aworldleading

economyandahealthy

society.

Theeconomycannotgrow

withoutthepaymentsinfrastructuretosupportit.Theabilityto

sendandreceive

moneymustberesilient,reliable,

scalable,

adaptable,

secure,

trusted,fastandconvenient

for

tradeto

thriveat

everylevel

oftheeconomy.

Andasconsumers,each

of

usrelies

ontheabove

everyday

to

shop,

travel

andworkinthewaythat

we

dotoday.“The

UK

is

in

a

good

place

today,

but

without

a

National

Payments

Visionand

Strategy,

we

cannot

be

confident

in

the

future.”Overall,weconcludethattheUKpaymentslandscapeisinagoodpositiontodaywithmanypositives.Firstandforemost,thepaymentsenvironmenthasalongtrackrecordofsecurity,reliability,andresilience.TheUKhashistoricallybeenaleaderoninnovationinareassuchas

realtimepaymentsandOpenBanking.5

Ourtermsofreferenceaskthequestion“Looking

at

thein-flight

plans

and

initiatives

across

the

payments

landscape,

how

likelyare

they

to

deliver

world

leading

payment

journeys

for

UK

consumers?”We

foundmanywellintendedin-flightinitiativeswhichallmakesenseinisolation,butinthecourseofourwork,wecouldnotfindaclearagreedvisionofwhattheyareaimingtoachieveinaggregate.WithoutquestionthestrongestpieceoffeedbackwereceivedthroughthisreviewisthattheUK’s

paymentslandscapelacksvisionandclarityofpriorities.Thislackofvisionandstrategymeansthatitishardto

havehighconfidenceinachievingacoherentoutcomein5-10years’time.OurstrongestrecommendationisthereforethattheGovernmentdevelopsanationalpaymentsvisionandstrategy–particularlyconsidering;i)

thecriticalityofpaymentstoconsumersandtheeconomy,ii)

themanybillionsofpoundsbeinginvestedandiii)thehighlyinterdependentnatureofthepaymentsarena.5.uk/what-is-open-banking/To

note,Open

Banking

isone

optionforenabling

real-timeaccount-to-accounttransfers

in

the

UK.Thisreviewhas

consideredin

detailopportunities

forexploitingOpen

Banking,

giventhe

strength

offeedbackreceivedthrough

our

stakeholderengagement.

Howeverweacknowledgethatthere

aremultipleaccount-to-accountsolutions

in

existence,and

support

continued

innovationacrossallpaymentmechanismstohelp

ensurethe

UK’spositionas

aworldleaderin

thisspace.8FuturePaymentsReview/

EXECUTIVE

SUMMARYCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXThisworkshouldhaveaprimaryaimofsimplifyingthelandscapeovertime.Ahealthypaymentsecosystemisessentialto

ahealthycompetitiveeconomy.Withaclearvisionforthefuture,paymentscanhelpunlockGDPgrowththroughfosteringsmallbusinessgrowth,frictionlesstrade,andFintechinnovation.“The

UK

consumer

benefits

from

a

world-leading

payments

experience

today–

but

it

could

be

even

better.”Turningtothespecificpaymentsjourneyswewereaskedtoconsider;thepictureismixed.On

thepositive,theUKhasarelativelymaturebanking,cardsanddigitalwalletsenvironment,andawell-developedregulatoryenvironment.Taken

togetherthismeansthatfromaconsumerpointofview,theUKholdsaleadingpositionforthepurchaseexperienceofgoodsandservices–bothin-person

andonline.We

makesomerecommendationsregardingStrongCustomerAuthentication(SCA)

requirementsthatwebelievecanmakethingsevensmootherforconsumersatthepointofpurchase.We

aresupportiveoftheworkto

preserveaccesstocash,

andareconcernedthatdigitalexclusioncouldbeaddingtothefinancialexclusionproblem.We

areaskingthattheseissuesarecloselymonitored.On

thenegative,therearetwosignificantissuesintheretailspacethatneedtobeaddressed.First,theconsumer-to-consumerbanktransferprocessisclunky(relativetointernationalcomparators)withtheneedtoenteraccountnumbersandsort

codes.Thisneedstobeimprovedinthecomingyears.Second,manymerchantsandretailersarefrustratedby

thecostsoftakingcardpayments,andthelackofviablealternatives.EXECUTIVE

SUMMARY

/FuturePaymentsReview9CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEX“Open

Banking

can

help

improve

both

person-to-person

bank

transfers

andprovide

an

alternative

to

the

card

schemes,

but

only

if

the

lack

of

consumerprotection

and

commercial

arrangements

are

addressed.”FirmsandFintechsarestartingtoinnovateanduseOpenBankingcapabilitiestoimprovethebanktransferexperienceforconsumers.Ourworkleadsustobelievethat–withsomeadjustments–OpenBankingcouldhelpimprovetheconsumer-to-consumerprocessand(intime)provideanalternativetothecardschemesforretailers.However,

thereiscurrentlynoconsumerdisputeresolutionprocessforOpenBankingtransactions,andwebelievethiswillbeabarriertoadoptionifnotaddressed.Likewise,thecurrentcommercialarrangementsdonotcreatetheconditionsforOpenBankingtothriveinahealthyway,

withcostsandbenefitsmisaligned.Iftheseissuescanbeaddressed,weareoptimisticaboutthescopeforinnovationandbelievethattheUKcanuseOpenBankingtocaptureaworldleadingpositiononceagainintheseareas.“Even

ahead

of

a

National

Payments

Vision

and

Strategy,

there

aresome

actions

that

can

be

taken

to

declutter

the

environment

andaccelerate

progress.”TheUKhasawell-developedpaymentsenvironment,butitisalsoverycomplexwithmultipleindustry

andregulatorybodies.We

makesomesuggestionsonhowtoimprovealignmentandprioritisationwiththeintentionoffreeingupmorespaceforinnovation.We

areadvocatingthatonthehigh-profileissueoffraudsandscams,weincreasethefocusonpreventingthecrimeinthefirstinstance,andcloselyassesstheimpactofthenewAuthorisedPushPayment(APP)fraudreimbursementrules.6“A

technology

inflection

point?”Finally,throughoutthisworkwehaveobservedhowtechnologyingeneral,andBigTech

inparticular,areredefiningnotjustpaymentsbutfinancialservicesintheprocess.In1994BillGatespredictedthattechnologyfirmswill‘bypass’banks.Theextremelyrapidadoptionofdigitalwallets(e.g.

AppleandGooglePay)

mayindicatethatweareataninflectionpoint.We

concludedthatthispresentsas

muchopportunity

as

threatandencourageanopenandcollaborativedialogueinthebestinterestsofconsumers,businesses,andthewidereconomy.Insummary,theUKhastheopportunity

tocreateaworldleadingpaymentsenvironmentlongintothefuture.Buttodothisweneedtocutthroughthecomplexityandworktowardsanewsharedvisionconsistentlyoverthelongterm.6.uk/news-and-updates/latest-news/news/psr-confirms-new-requirements-for-app-fraud-reimbursement/10FuturePaymentsReview/

EXECUTIVE

SUMMARYCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXSummary

of

recommendationsTheprimaryrecommendationisthatthe

GovernmentdevelopsaNationalPaymentsVisionandStrategytobringclaritytoitsfuturedesiredoutcomesforUKpayments.Akey

aimofthisstrategyisto

simplifythelandscape.Althoughtotalpaymentshavegrownslowlyovertimeto£47.5bn

last

year,

therehavebeenrapidshifts–mostnotablyfromcashtodebitcards.Additionally,paymentsthroughtheFasterPaymentsSystemhavealsogrownas

theyhaveprogressivelyalsoreplacedcheques.Thesetrendsareforecastto

continue–albeitatamoremoderaterate–overthecomingyears.Consumer

Experience

andopportunitiesto

improveRecommendations1&2areconcernedwithimprovingtheconsumershoppingexperienceby

movingSCArequirementsawayfromdetailedtechnicalstandardsfortheFinancialConductAuthority(FCA)tosuperviseviaanoutcomes-basedapproach.Thiscanimprovetheshoppingexperienceandfurtherreducefraud.Recommendation3asksthatHMTreasuryandtheFCAregularlyassesswhetherdigitalexclusionisleadingtofinancialexclusion.Thepositionisevolvingrapidlyandneedstobecloselymonitored.OpenBanking

andopportunitiesto

exploitmorefullyRecommendation4isthatconsumerprotectiononpaymentsmadeviaOpenBankingisenhancedwithaminimumformofdisputeresolution.ThiswillcreatethetrustandsecuritythatconsumersneedtoadoptOpenBankingsolutions.Recommendation5isthatOpenBankingisleveragedtoimprovetheperson-to-person

banktransferpaymentsjourney.We

believethatOpenBankingjourneyscanrivalthebestintheworld–ifwefocusonthem.EXECUTIVE

SUMMARY

/FuturePaymentsReview11CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXRecommendation6isthatanOpenBankingalternativepaymentjourneyisdevelopedtogiveretailerschoicebeyondcardschemes.Inaddition,thatthePaymentSystemsRegulator(PSR)completetheirworkinvestigatingcardschemefees.Ifchoicecanbecreated,webelievethatmerchantdissatisfactionwilldecrease.Recommendation7isthattheGovernmentandJointRegulatoryOversightCommittee(JROC)prioritiseagreementofacommercialmodelforOpenBankingsothatthereisscopeto

investinbothinfrastructureandconsumerprotection.Withoutsustainablefinancials,itishardtoseethatOpenBankingcanthriveoverthelongterm.Improving

regulatory

oversight

and

alignmentwould

allow

for

moreefficiencyandinnovationRecommendation8isthatthePSRconductsareviewofthenewAPPfraudrulesafter12

monthsofimplementationandwearesuggestingthattheGovernmentsetamoreambitiousfraudcrimereductiontargetbeyond2024.Theemphasisshouldbetopreventthecrimeinthefirstplace.Recommendation9isthatHMTreasuryandtheregulatorsreviewwhetherthewaysomecurrentregulatoryrequirementsareappliedtoFintechsisclearandappropriate.Ifwecanreducethecomplexityforsmallerfirms,theywillgrowmorerapidly.Recommendation10isthatHMTreasuryandtheregulatorstakeavarietyofactionstodrivecloseralignmentofregulatoryactivity,includingthroughupdatedremitletters,enhancingtheregulators’existingMemorandumofUnderstanding,ensuringcross-pollinationatBoardlevelandworkingtoreducetheregulatoryinitiativesimpactingfirmsby

anaspirationalambitionof10%.Theintentionistofreeupmorecapacityforinnovation.12FuturePaymentsReview/

EXECUTIVE

SUMMARYCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXFor

considerationThrough

thisreport,

as

wellas

recommendations,wecalloutanumberofthoughts

forconsideration.Thestrongesttheme

emergingunderthisheadingisthe

natureofGovernmentengagementwithBigTech.•AcrossGovernmentthereareanumberofhighpriorityissuesrelatingtoBigTech

–nationalsecurity,onlineharms,artificialintelligenceas

wellasfinancialservices.•TheimpressionformedthroughresearchingthisreportisthatGovernmentengagementwithBigTech

couldbebettercoordinated.•MultipleattemptstodirectandregulateBigTech

mayresultindeterioratingrelationsorinextremisBigTech

steppingbackfromtheirstrongpositionsintheUK.•Itfeelslikethereisanopportunity

totakeamorecoordinatedapproach–morelikethediplomaticapproachto

acountrywithanambassador7–withtheaimofagreeingmutuallybeneficialpartnershipsoverall,ratherthannarrowtransactionaloutcomes.7We

notethatthe

EUhas

opened

whatcouldbe

described

as

aSiliconValleyembassy

tostrengthen

its

digitaldiplomacy.US/Digital:EUopens

newOffice

in

San

FranciscotoreinforceitsDigitalDiplomacy|EEAS

(europa.eu)EXECUTIVE

SUMMARY

/FuturePaymentsReview13Background14FuturePaymentsReview/

BACKGROUNDCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXBackgroundThroughout

humanhistory,the

way

thatwepayforgoodsandserviceshas

beenbecomingprogressivelylesstangibleandmoreremote.Earlyhumanhistorywasabartereconomy.Then,accordingtotheUKCashSupplyAlliance8,coinsstartedappearingintheworldaround600BC,andtheRomansbroughtthemtoBritainaroundthefirstcenturyAD.

TheRoyalMintwasfoundedin886andisthe10th

oldestcompanyontheplanet.Chequesappearedaround1660–issuedbyGoldsmithbankersformakingloans.Banknotes–exchangeablefortheequivalentvalueingold–wereproducedintheUKfromthemid-18thcentury.Wiretransfersbecamepossiblearound1871.Around1960,

wagesstartedto

bepaiddirectintobankaccounts,andthefirstATM

wasintroducedin1967.

Therateofchangehasacceleratedrapidlyoverrecentdecades,withcreditcards,debitcards,contactless,onlinebanking,mobilebankinganddigitalwallets.Witheachwaveofinnovation,moneyislessphysical,andincreasinglyhassimplybecomeadigitisednumber.As

ourrelationshipwithmoneychanges,thewaythatweauthorise,understandandcontrolourpaymentshavechangedatincrediblepaceoverrecentyears.In2022,86%

ofpaymenttransactionsintheUKweredigital,comparedto44%in2012.9Roman

coins

first

appeared

in

Britain

around

the

1st

CenturyBank

ofEngland,

London,

Victorian

19th

Century89UKCash

SupplyAlliancesubmissiontothe

FPRCallforInputAllconsumer

payments

exceptcash

and

cheque

transactions.

.uk/system/files/2023-09/UK%20Finance%20Payment%20Markets%20Report%202023%20Summary.pdfBACKGROUND

/FuturePaymentsReview15CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXAlthoughtotalpaymentshavegrownslowlyovertimeto£47.5bnlastyear,10

therehavebeenrapidshifts–mostnotablyfromcash

todebitcards.Additionally,paymentsthroughtheFasterPaymentsSystemhavealsogrownas

theyhaveprogressivelyalsoreplacedcheques.Thesetrendsareforecasttocontinue–albeitatamoremoderaterate–overthecomingyears.Figure1–UKpaymentvolumes(millions)2012

to20321130,00025,00020,00015,000ObservedForecast10,0005,00002012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032CashChequeDebitcardOtherDirectDebitStandingorderFasterPaymentsandotherremotebankingCredit/charge/purchasingcard10

.uk/system/files/2023-09/UK%20Finance%20Payment%20Markets%20Report%202023%20Summary.pdf11Ibid16FuturePaymentsReview/

BACKGROUNDCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXWhenlookingatallthe

waysthatpeoplemakepaymentstodayinthe

UK,

debitcardsareby

farthe

mostpopularintermsofbothvolumeandvalue.Figure2–Shareofconsumerpaymentsby

volumeandvalue,202212TotalpaymentvolumesintheUK(millions)2022vs2032forecasts(excludingCHAPS)Total:45,6542022(millions)2032(forecasts)(millions)Total:49,88523,046(ofwhichcontactless14,668)27,287(ofwhichcontactless19,351)DebitcardCash6,4423,3374,7124,986DirectDebit4,085(ofwhichcontactless2,335)5,025(ofwhichcontactless3,398)Credit/charge/purchasingcard1,9764,2515571,9826,043575BacsDirectCreditFasterPayments*StandingorderOther45758466129Cheque12

.uk/system/files/2023-09/UK%20Finance%20Payment%20Markets%20Report%202023%20Summary.pdfBACKGROUND

/FuturePaymentsReview17CONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXAlignedwithour

termsofreference,wehavechosentofocuson

howpeoplesendmoneytootherpeople(person-to-person),andhowpeoplepayforgoodsandserviceswithinthe

UK.

We

havebeendirectedtofocusontheretailmarket,13

andsohavelookedathowpeoplepayforgoodsandservicesatthepointofsaleinstore(circa

£367bn)andecommerce(circa£127bn).14

Additionally,wehavefocussedonperson-to-person

paymentswhichareveryimportantfortheworkingsofoursociety.Cash,corporates,cryptoandthelargerendofpayments(CHAPS15)areoutofscope,althoughwereferencewhererelevant.We

reviewedavarietyofdatapointswhichindicatethatuseofBNPLvariesbetween8-17%ofecommercepurchases–dependingonthecontext.16

However,

wehavechosennottolookcloselyatBNPLsincethiswasrecentlysubjectofaseparatereviewandactionsareintrain.17Consumersquoteanumber

ofbenefitareasthattheyappreciatewhenmakingapayment–but

the

criticalneedsofreliabilityandsecurityareassumed.

Whenasked,consumersfavouramethodthattheyarefamiliarwith–presumablybecausetheytrustitandassumeitwillwork.Additionally,consumerswilloftenquoteconvenienceandspeedas

key

benefits.However,whenthinkingaboutbuilding,runningandregulatinginfrastructure,itisvitaltoappreciatethatoperationalresilienceandreliabilityaremoreimportantthananythingelse.Paymentssimplymustwork–allthetime.Beyondthis,speed,security,control,consumerprotectionand,increasingly,privacyofdataareimportant.Thereissometensionbetweenthesebenefitareas,andthecountriesthatscorewellonspeedandeasealsodemonstratethehighestfraudrates.(e.g.

India44.6%,Nigeria40.4%,SaudiArabia33.2%,Thailand25.7%,andSingapore,where25.3%ofthepopulationreportedbeingavictimoffraudinthelast

fouryears).1813

Fornote,weareawaresome

higher

valuemarketsareout

ofscope

–forexample,significantconsumer

payments

flowsaresalary

payments

toconsumers,

and

billpayments

fromconsumersviadirect

debit.

Paymentstoconsumers

forexample,areover£1.2tn/year.Other

large

volumesofpayments

include

payments

fromGovernment,

whichtotalup

toc.1bn,including

DWP,

HMRCandsupplier

payments.14

15

ClearingHouse

AutomatedPaymentSystem16

e.g.The

GlobalPaymentsReport

2023,FIS,2023.17

.uk/publication/corporate/woolard-review-report.pdf18

ACIWorldwide,‘Prime-Time-for-Real-Time-Report’

202318FuturePaymentsReview/

BACKGROUNDCONTENTSFOREWORDEXECUTIVE

SUMMARYBACKGROUNDOVERVIEWCONCLUSIONSGLOBAL

ANNEXFigure3–MostimportantfactorswhenchoosingpaymentmethodsintheUK,202119Payment

method50%Familiarity

and

speed

of

payment

aretraditional

criteria

that

have

been

consistentlyselected

as

the

most

important

byconsumersI’mfamiliar

withSpeed

of

payment44%43%Protection

and

security

has

becomemore

important

over

time

as

fraud

methodsare

increasing

in

sophistication.

AccordingtoPaysafe

survey

in

April

2022,

security

isconsumers’

top

priority

when

paying

onlineand

59%of

respondents

are

moreconcerned

about

fraud

than

they

wereayear

agoProtection

forpurchasing(e.g.if

goods

are

faulty)Security

features

(e.g.requiresasecure

authorisation)40%Ease

of

keeping

track

of

myspending(e.g.notifications,

budgeting)32%31%Wide

acceptance

(i.e.can

useat

amajority

of

businesses)Features

likespending

trackers

and

rewardprogrammes

are

gaining

popularity

andbecoming

akeydifferentiator

while

choosingbetween

familiar

payment

methodsRewards/discounts23%22%Privacy

concerns(e.g.anonymity

of

payment)c.

8%

of

all

ecommerce

payments*

in

the

UKare

done

via

BNPL;

adoption

is

expected

togrow

in

the

future

driven

bythe

cost

of

livingcrisis

which

is

leading

consumers

toOption

tospread

the

cost(e.g.pay

in

instalments)13%increasingly

look

forthe

option

of

spreadingthe

costs

forbig

ticketgoods

servicesNone

of

these

7%*In

terms

of

share

of

transaction

value.Figure4–%ofthepopulationwhoreportedbeingavictimoffraudinthepast4years2020221India44.6%40.4%33.2%30.7%28.1%67Thailand25.7%25.3%24.6%24.4%24.3%2345NigeriaSaudi

ArabiaUSSingaporeCanada89NewZealandAustralia10

Ireland19

Thanks

toEY

for