Update on the Payments landscape – September 2024
The payments landscape continues to evolve and this blog shares some of the topics that caught my attention during the last three months. If you think I’ve missed anything important, do please send an email to technical@treasurers.org.
Regulatory announcements
- The Payment Systems Regulator (PSR) published its annual report and highlighted progress on:
- Protection in payments and in particular work on Authorised Push Payment fraud (APP) including the first set of APP fraud statistics and the planned completion of Confirmation of Payee Phase 2 which will cover 99% of all Faster Payment transactions
- Work to enable a phased rollout of Variable Recurring Payments (VRPs)
- Interim reports on the card payment landscape with a focus on consumer protection and competition
- The PSR confirmed the implementation date for APP scam protections as 7 October, and after considering the findings and evidence provided, is consulting on a new cap of £85,000 which would bring it in line with the Financial Services Compensation Scheme (FSCS) limit.
- In August the PSR set out its next steps on expanding variable recurring payments in the UK covering:
- Coordinating expansion through a multilateral agreement (MLA)
- Mandated participation beyond the “CMA9”
- Pricing principles and possible price intervention
- In May the PSR issued its Market review of card scheme and processing fees interim report. It found that:
- The supply of scheme and processing services is not working well
- There is currently no effective competition preventing the two biggest schemes raising prices
- Pricing in the market is complicated and prices have risen substantially over the last five years
Interesting reports
- UK Finance issued its annual report on payment statistics for the UK market. A summary of the report is freely available to the public. It includes the following analysis showing trends in both actual and forecast volume by payment type:
- Capgemini released its World Payments Report 2025. Key findings included:
- Asia-Pacific stands out as one of the fastest growing regions for non-cash transactions with a 20% YoY increase in 2024 compared to Europe (16%) and North America (6%). Globally, most industry executives (77%) identify e-commerce growth as the critical driver accelerating the shift to non-cash transactions.
- Account-to-Account (A2A) instant payment solutions present a faster and cost-effective way to pay, bypassing expensive card networks. According to the report, the rise in their popularity threatens to challenge the dominance of traditional payment cards, with estimates suggesting they could offset 15-25% of future card transaction volume growth.
- The European Payments Initiative’s Wero wallet is likely to accelerate adoption of A2A payments with 37% of European payment executives anticipating it will significantly offset card transaction growth across Europe by 2027.
- For corporate treasury executives across insurance, retail and automotive sectors, inefficiencies across accounts payable and receivable processes create a significant cash flow headache. Over 80% still use manual, paper-based processes for accounts reconciliation resulting in nearly 7% of corporate revenue being tied up within the value chain. This potentially translates to billions of dollars being stuck that could be used to fund business activities. Instant payments and open finance can present a new path forward for these enterprises by offering real-time cash visibility.
Naresh Aggarwal
20 September 2024
