25 October 2014

Mike at Raphaels

Mike Smith - Raphaels Bank

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The UK Payment Services Regulator: Let Battle Commence

15 April 2014  |  1781 views  |  1

Welcome to my first blog, in particular to those who have been sweating on completing their response to the new Payment Systems Regulator's call for inputs, deadline today.

I have had a peaceful day, having submitted yesterday, more than 24 hours in advance, something of a luxury.

What an interesting exercise the last week has been.  Having attended sessions organised by the BBA and by the fledgling PSR, I think it is fair to say that input will be polarised.

The big players will think of 157 reasons why the small should be kept out and the small will think of 1 reason why the big should let them in easily at no cost, i.e. for the sake of their own business.

How this plays out will be fascinating.

I often feel that the intended competition agenda set out in legislation stumbles when it comes to implementation. It is now 14 years since the first e-money directive and although believable statistics are notoriously difficult to find around e-money, no-one is claiming it is a runaway success.  Did the 2nd e-money directive make any significant changes? No.  Will the introduction of the PSR in the UK? Maybe.

Many in prepaid are realising that in order to provide frequently used re-loadable products, you have to link into the ACH system. Direct Debits, BACS for payroll & benefits and Faster Payments are such fundamental constituents of the daily payments infrastructure in the UK that any product which purports to be mainstream but doesn't use them, doesn't fly.  Hence those of us in prepaid trying to tap into these markets have to link the cards payments infrastructure with the banking payments infrastructure.

Can't be done at present without the help of a friendly clearing bank. How friendly they are now and how friendly they will be tomorrow in helping upstarts eat their lunch (or possibly take away their problems in delivering products for the "underserved" market?) remains to be seen.

For the small guys, like Raphaels, this is where we see the major potential benefit of the new regulator.  Whether they will see it the same way will become clear in, well, say, a couple of years.....

TagsRetail bankingInnovation

Comments: (1)

Neil Burton - Self - London | 16 April, 2014, 12:17

Mike, if I might sound a slightly different note, I was hugely encouraged by the PSR's outreach meeting last week, and their call for inputs.

Competition has its role to play, but the other two objectives, 'innovation' and 'service-user', are also really important. Done right, the outcome will be to create a bigger market, for a wider range of services, and inclusive of a broader set of customers than ever before.

To do that, we need a vibrant ecosystem, in which challenger banks, credit unions, e-money issuers, APIs and more, are included. Many of those serve groups of people, and market needs, that are underserved today, rather than competing directly. Your point on access is well made.

And costs shared fairly, and the core infrastructure protected, which is fundamental.

Maybe we can make UK the most efficient e-economy in the world.

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The UK Payment Services Regulator: Let Battle Commence

15 April 2014  |  1781 views  |  1  |  Recommends 0 TagsRetail bankingInnovation
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Mike Smith

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Commercial Director

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Raphaels Bank

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2014

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London

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Commercial Director at Raphaels Bank developing Cards and ATMs businesses.

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