On the day of the UK General Election, The Payments Association, an advocate for innovation and collaboration in the industry, is preparing to address the incoming Chancellor of the Exchequer with a letter outlining key priorities for the payments sector. Scheduled for delivery post-election, the letter emphasizes the need for leadership to drive growth and combat fraud effectively.
A Forward-looking Vision for Payments
The UK’s payments industry lacks a cohesive government-backed vision, prompting HM Treasury’s plan to unveil a National Payments Vision and Strategy by Summer 2024. This strategy aims to modernize the UK’s payment systems to world-leading standards. The Association urges the Chancellor to endorse an ambitious National Payments Vision and Strategy that fosters competitiveness and supports economic growth.
Advancing Open Banking
Recognizing fintech’s pivotal role, particularly in open banking and open finance, the Association urges swift action from the Chancellor to enhance competition in retail payments. Open banking initiatives have already bolstered the UK economy with significant job creation and a burgeoning sector worth £4.1 billion.
Positioning the UK as a Crypto Hub
The Association calls upon the Chancellor to position the UK as a global leader in digital finance, fostering innovation in digital currencies and attracting investments. It advocates for a robust regulatory framework that promotes secure transactions, efficient governance, and interoperability across emerging technologies like web3, DeFi, and smart contracts.
Addressing APP Fraud
Highlighting concerns over payment fraud facilitated by tech giants, the Association proposes a ‘Tech Levy’ to hold these firms accountable under the ‘polluter pays’ principle. It aligns with recommendations for a fraud levy to compensate victims, reinforcing responsible risk-taking and sustainable growth.
Reforming Authorised Push Payment Fraud Rules
The Association challenges proposed changes by the Payments Systems Regulator (PSR), advocating for a reduction in the reimbursement threshold from £415,000 to £30,000. This adjustment aims to better protect businesses and consumers from the financial impacts of scams, ensuring proper investigation and reporting for claims exceeding the threshold.
Call for Government Action
Finally, the Association urges the appointment of an Anti-Fraud Minister to coordinate efforts across departments in combating evolving fraud threats. This proactive approach seeks to safeguard the fintech industry’s integrity, foster innovation, and protect vulnerable consumers.
In conclusion, The Payments Association’s letter to the Chancellor underscores the critical need for strategic leadership and supportive policies to propel the UK payments industry forward, enhance competitiveness, and safeguard against financial crime in the digital age.
