The UK has found itself in a corner with real-time payments, forced to update and redesign the core infrastructure of its retail payments authority Pay.UK. This situation is not due to the UK falling behind from a slow start. In fact, Britain was among the first to introduce real-time payments in 2008. Its system is simply outdated.
To keep up with changes and trends, the platform needs to be completely overhauled. Digital payment volumes, surging fraud, non-bank competitors and the emergence of the ISO 20022 messaging standard are just a few of the rising trends the platform must now be updated to handle. For the same reason, the UK’s Bacs batch payments system (first launched in 1996) and its CHAPS high-volume payment network (introduced in 1984) are also being replaced.
Unfortunately, the UK is now paying a high price for initially being ahead, but now being off the mark in real-time payments. The task of modernizing existing infrastructure is much more expensive now than it used to be, and it will take longer than new deployments do. Experts are now warning other countries to take notice and avoid making the same mistake.
“Britain’s Faster Payments needing overhauling after 10 years is a warning to the U.S.,” said Sarah Grotta, Mercator Advisory Group’s director of debit and alternative products. “Those building real-time U.S. payments platforms must realize their platforms will need constant, substantial investment.”
UK Payments Undergoes Reorganization
The UK’s payments administration has already started the reorganization process, with separate retail and bulk payment schemes being combined in 2018 in Pay.UK. As of now,Pay.UK encompasses Faster Payments, the Cheque and Credit Clearing Company and Bacs Payments Schemes. It is now developed a New Payments Architecture for the UK’s retail and bulk payments infrastructure.
According to reports, the New Payments Architecture will encompass processing of Bacs transactions and Faster Payments, including Paym. Its systems will also be based on ISO 20022. How will this affect consumers? This new standard will mean payments services providers (PSPs) will be able to add enhanced data to customers’ payments (e.g. transaction’s purpose, tax information, underlying details, etc.).
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Author Bio:Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of the industry and payvector has helped thousands of business owners save money and time.