UK “still one of the most innovative payments markets in the world”

Despite geopolitical and market uncertainty, the UK is still a leading venue for payments and associated technologies, according to Gregor Dobbie, CEO, Vocalink.

“The UK is still one of the most innovative payments markets in the world, and it’s also one of the best markets from a financial inclusion perspective,” he said this week at Sibos in central London.

“Everywhere we go people want to talk about the UK.”

Dobbie was speaking on the sidelines of the event a day after Vocalink, a Mastercard company, announced it would be launching its request to pay solution in the UK as the latest addition to the parent company’s portfolio. There’s plenty of demand, said Dobbie.

“There is a sector of society who we find are looking for different ways to manage their finances. Direct debit is a very longstanding product but there are parts of society who don’t like the lack of control it provides.

“We wanted to digitally replicate what you can do with cash. It’s all about choice. We want to make it easy for consumers to transact without cash,” he said.

The UK’s payments market has been heavily shaped over the past few years by the Open Banking initiative and Europe’s second payments directive (PSD2). However, while the rules have driven innovation in the sector Dobbie believes key market participants are innovating in order to fulfil consumer requirements.

“Open Banking is more about data than payments, but a lot of the things that will happen through Open Banking will result in a payment,” he said. “Request for pay is another way to facilitate that – it’s driven by a sector of consumers looking for different ways to pay, and a sector of companies looking for a different way to build.”

In a recent survey by KPMG, 45 percent of respondents said they use contactless cards, 10 percent use chip and pin, four percent use digital wallets, with the remaining 41 percent using cash.

“In terms of what’s coming next, we always focus on two key things – and call it thoughtful innovation,” said Dobbie. “Number one is if you release a new type of payment you absolutely have to show people how to use it, or it fails. It has to be intuitive. The best example of that is contactless. Most people learnt how to use contactless by copying someone else ahead of them in the queue. The second thing is consumers expect a payment to work. Anything that we develop has to meet our resilience standards – and exceed even more others’ resilience standards.”

According to Tim Dolan, partner at Reed Smith, a law firm, the UK’s payments market is in a good position thanks to regulatory and market impacts.

“The good news for UK regulators and firms is that the efforts to comply with PSD2 are much more advanced than elsewhere on the continent,” he says. “UK regulators have done a huge amount of work to help ensure compliance and, across Europe, all eyes are on us.”

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