On 10 May 2022, the Payment Systems Regulator (PSR) published a summary report produced by its Panel on the Digital Payments Initiative (Initiative).
The PSR Panel provides independent advice and input to the PSR on an ongoing basis. The PSR asked the Panel to undertake the Initiative in order to understand the potential barriers to the take-up of digital payments and identify potential solutions and appropriate regulatory actions.
The PSR and the Panel launched the Initiative last year against a declining use of cash, a fast growing market in digital payments and consumers not securing the benefits of using digital payments. Whilst recognising the emerging innovations across the payments sector, the Initiative identified open banking could be the key to developing digital payment services that better meet the needs of users, including those who currently prefer to use cash.
The report is a first step to understanding the barriers and solutions to increased take-up of digital payments. It provides both strategic and more tangible recommendations for how the PSR together with the broader ecosystem could help the market to ensure that everyone has access to digital payment services that meet their needs.
The report includes both high level and technical recommendations from the Panel. In summary, the high level recommendations concern four areas that the Panel believes should be worked on to address the drivers of cash reliance and enable great take-up of digital payments. These are:
- Improving consumers’, small business’ and other small organisations’ awareness and understanding of, and trust in, digital payment options.
- Tackling barriers to new digital payment services and service features, including enabling new functionalities and improving trust by addressing fraud risks;
- Reducing digital exclusion.
- Putting better data in place to monitor the transition to digital payments.
The PSR will engage with industry and relevant authorities on the barriers and solutions that the report identifies to enable greater and easier use of digital payments, with a workshop planned in June, and will set out its response to the Panel’s recommendations later in the summer.