In the UK today, we use various payments and collections systems to pay for goods and services incurred. As times change, and consumer and business needs evolve, payment systems once well suited to their function require innovation to ensure they continue to meet user requirements.
Find out more about UK payments with this guide.
The Payments Strategy Forum launched their strategy in 2016 with the aim of overhauling the UK’s payment and collections systems by 2020. Essentially, this project was designed to ensure the UK’s payment mechanisms could meet the requirements of 21st Century consumers and businesses.
What is the Payments Strategy Forum?
Created by the Payments Systems Regulator (PSR), The Payments Strategy Forum (the Forum) was formed in 2015. Its members include; payments companies, banking & financial services sector representatives and fintechs (financial technology companies). Consumer groups and non-governmental bodies are also members of the Forum.
It’s overarching goal was to develop a strategy for payment systems in the United Kingdom. As a result, the Forum members worked in partnership to drive collaborative innovation in payment systems. This led to the development a payments strategy which reflects the needs of all users.
As a result, on 29th November 2016 the Forum launched the ‘Payments Strategy for the 21st Century‘. This is a final proposal, which they believe will transform the way consumers and businesses make payments in the future.
Why the change?
The payments systems that we use day-in-day-out are essential to how well the UK economy runs.
Having formed over decades of variable customer requirements, today we have a smorgasbord of payment systems that process UK payments over five days, as well as ones that take less than a few minutes.
With these unnecessarily complex and somewhat idiosyncratic payments systems in place, radical changes and innovation is required to existing payment systems, to ensure future generation needs will continue to be met.
With millennials and agile start-ups itching for better payment systems, changes to the UK payments system was inevitable.
What can you expect?
Above all, the Forum’s strategy publication has responded to the needs of consumers and businesses. It has provided a breakdown of how UK payments will evolve in years to come. Plans announced by the Forum, included;
- Initiatives that will help tackle financial crime, provide safer and more secure payments and banking processes.
- Control and assurance measures for when payments and collections are processed.
- Opportunities for challenger banks and fintechs – such as AccessPay – to compete with large banking and financial services institutions to meet the needs of service-users of tomorrow.
Also, here at AccessPay, we believe the initiatives announced by the Forum will help provide;
- A secure and resilient payments system to meet new world threats.
- A system that is modelled on user-requirements and not on deliverability of funds.
- And fundamentally, a landscape that encourages innovation and competition.
Why should finance professionals care?
With responsibility for payroll, accounts payable and payment collections, finance professionals need to ensure they are aware of the changes taking place in the evolving UK payments industry.
There’s changes to payments systems that you have come to know and love (or hate), possible changes to payments software that you have familiarised yourself with over the years and the introduction of new payment methods that you will have to learn from scratch, all coming up. They are all going to affect the way you process business payments.
Therefore, with the Forum now working towards implementing these changes, financial professionals will need to keep up-to-date and take active interest in what changes are being brought about to change UK payments and collections systems.