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Rakesh's blog archive

2017 (1)
Rakesh Lakhani

Rakesh Lakhani

Head of Payments Transformation at TCS
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SEPA and European Payments

How will banning credit card surcharging impact the uptake of PSD2 PISP transactions

17 Aug 2017

PSD2 introduces two measures amongst others that potentially contradict each other and may limit their ability to hit the goals they set out to achieve: Payment Initiation Service Providers (PISPs) PISPs may initiate a transaction on behalf of the customer directly from their bank account. These transactions will bypass card networks and therefor...

Rakesh is Commenting on

VocaLink and BancTec win UK cheque clearing mandate

  I must say, some of the sarcastic comments in this thread did make me chuckle. That said there are some very valid points given by both sides to get rid of cheques and to keep them. The main thing I fall back on is we can't take away a payment means without a viable alternative. In the current situation, faster payments does not meet all the requirements to be a true viable alternative. There is a convienience to cheques that has been pointed out. The ease of writing them, ability to hand them over, post dating (beyond the 30 day restriction placed in most bank sites). The Future Clearing Model brings an extremely valuable addition to cheques until a true alternative is ready. Float is removed, which is a huge gripe for cheques, but also the need to visit a branch. With all the branch closures a means to deposit cheques without a branch is essential. Now to the future of no cheques. The Payment Strategy for the 21st Century paper published last November is introducing some essential value add services that will help with replacement of cheques. The ability to validate the beneficiary (assurance data) - no chance of incorrect bank details, notification to the beneficiary of successful payment - simplified reconciliation; Request to Pay - a simplified invoicing and payment in one; Enhanced data - rich remittance data with the payment. Combine these services with the innovation coming from PSD2/Open APIs. Introduce services to easily initiate payments. For example, the invoice or business card of the supplier has a QR code that triggers the payment app and completes the payment information. Finger print and you've paid.  Now we have given a reason for people to move to something simpler that adds value to the end to end process.

Is Paym a failure?

  It's very interesting to see that the trend in the comments is that paym just isn't easy to use. Don't think anyone will disagree that the there is most definitely interest from the people for P2P, Venmo have succeeded, Vipps in Norway has exceeded its uptake by 5x their initial prediction. In my view, Paym was the platform for the banks to offer P2P and avoid being disintermediated by Venmo, Facebook, PayPal etc. They just haven't done it. At its launch there was some press but the front ends weren't ready. As it has progressed I see my bank (Lloyds) has taken steps to make it a more accessible service but it is still several clicks to get there and zero integration with the mobile device to easily find a contact, invite one to sign up or easily see who is on Paym and who isn't. I haven't personally used the service, though I have signed up. I tried to use it once but the person I wanted to send money wasn't on there and I had to go back to finding their bank details. The reports in the comments of its failures in successfully sending money are the absolute worse thing for it. The payments world is driving for frictionless payments, though to be successful they must be relevant and reliable. Paym is neither right now, not because the central solution is flawed but the way it has been exposed. It is in need of a re-launch but looking at the customer journey first. I for one would happily have one app than I can pay everyone, rather than needing to register with multiple different apps to get reach.