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Have your say in shaping the future of payments strategy

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Yesterday the Payment Systems Regulator (PSR) issued a call for Payments Strategy Forum (PSF or Forum) members and draft terms of reference for the forum. The announcements make clear how firms can get involved in setting the future strategic direction of collaborative innovation in the payments industry.

It also announced the first chair of the PSF Ruth Evans, who will take up her role from 27 July 2015. Evans is currently the chair of the Authority for Television on Demand and has a long track record of representing consumer and the public interest across a range of industries. She has served as director, committee and panel member for a number of organisations as well as having chaired two independent inquiries.  

What is the PSF?

In March 2015 the PSR announced that it would set up the PSF to address some of the issues identified relating to strategy-setting in the payments industry in the past (see below). The aim of the forum is to drive collaborative innovation in payment systems for the benefit of users. The PSF will have around 20 members selected to reflect the diversity of the payments industry.

The Forum will identify, prioritise and develop initiatives to promote innovation for the benefit of users of payment systems. It’s focus will be on those innovations where collaboration is needed. The FCA and PSR have already announced that the PSF will be looking at the Current Account Switch Service (CASS) and Account Number Portability (ANP). It will also hold industry to account by shining a light on the Forum’s progress.

Why is the PSF needed?

Historically, strategy-setting in the payments industry has happened within the individual payment systems themselves and via industry bodies such as the Payments Council. The PSR has identified a number of issues with strategy-setting in the past, including:

  • lack of opportunity for some industry players to influence decisions;
  • issues with decision-making processes, which made progressing collaborative projects difficult;
  • change being slow to be delivered; and
  • the industry being reactive to external pressure (e.g. from the government) rather than launching projects proactively.

Consequently criticisms have been levelled at the payments industry concerning the pace and effectiveness of innovation.

Furthermore, firms may not always see the benefit in cooperating with their competitors to innovate. However, due to the ‘network effects’[1] present in the payments industry, cooperation is vital to ensure certain key innovations can be brought to market. 

The PSR intends that the Forum will help to remove barriers to entry and promote competition and innovation in payment systems in the interests of the users of payment systems. 

How can firms influence future payments strategy?

There are a variety of ways in which firms can get involved with the Forum and or influence the shape of future strategy-setting in relation to innovation:

  • Apply to be one of the 20 PSF members for a two year term. These are intended to be people in senior positions with an ability to shape strategy/policy in their own firm as well as the sector more broadly. The PSF will meet six times per year in or around London (with the possibility of invitations to further meetings). Members of the forum will be required to put service-users' (rather than their own organisation's) interests first - although service-users covers a broad spectrum including anyone who uses payment systems and the services they provide. It therefore covers payment service providers, for example,  as well as individual end-consumers.
  • If firms apply to be members and are not selected, or do not wish to be a member of the Forum, there is still an opportunity to be involved in the working groups that will support it by looking at specific issues.
  • Firms with an interest in payment systems and related issues can seek to become part of the ‘Payments Community’. The Payments Community will work alongside the Forum and is described as being a 'flexible engagement channel' comprising payment service providers and users of payment systems who may or may not me members of the Forum. It will be asked to comment on the shape of the PSF’s work.
  • The PSF will also issue calls for input and run more formal consultations from time to time.

Next steps

Individuals who are interested in becoming a member need to apply by 5pm on 12 August 2015. An application form is available via the PSR’s website. The first Forum meeting is expected to be held in the autumn.

For further information please contact:

[1] Network effects are where the value consumers place on goods or services increases as the network of consumers using those good or service grows. For example a social networking site is likely to become more valuable to existing members of the network as more people join it.