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PayM still reflects a very traditional mindset - "go to a banking app to make a payment". Compare that with popular US P2P payment methods such as Venmo, which operates a its own social network, or Facebook which has integrated peer-to-peer payments into its Messenger app, or ChangeTip which works across a range of social networks. Which is more likely to appeal to the digital generation? Far from becoming the de facto standard, there is a risk that PayM will become the MySpace of peer to peer payments.

Soviet-style central planning is never going to increase competition. Even the FCA's own report admits that "The introduction of a potential monopoly provider of a centrally-managed core platform also introduces the risk of a single point of failure and may stifle rather than encourage innovation in payment systems". A continued obsession with account number portability will throw good money after bad (£5bn mentioned in the article) while actually derailing the real objective of increased competition between account providers. Let's focus instead on providing "new opportunities for challenger banks" who will give customers a genuine reason for changing account provider, rather than a mechanism for easily switching between uniformly mediocre financial institutions.

It has never been clear in what ways the new scheme will be "based on" SCT. Apart from (some of) the ISO20022 message formats (which will anyway need changes, as identified by the real-time payments working group), what other characteristics of SCT will carry over to the real-time world? It seems the degree to which banks will be able to leverage their investment in SEPA will be limited. 

Certainly clearing and settlement will be an issue in the new scheme, and it is difficult to see how they can be brought into alignment with the SCT rulebook in which the CSM carries out inter-bank settlement before the beneficiary bank credits its customer's account. In schemes such as UK Faster Payments, the beneficiary bank credits their customer immediately on receipt of the payment instruction, and inter-bank settlement happens periodically throughout the day. Handling the resulting settlement risk is a major challenge for all instant payment schemes.

This is such a great idea I just went and glued my iPad to my fridge!

Let's all bury our heads in the sand and wait for this digital nonsense to blow over! In ten years time people will have got over the mobile phone fad, and will be flocking to their local branches to deposit their paper cheques. I just hope there's sufficent parking space for all those horse-drawn buggies.

Good times coming for fraudsters if this gets wide adoption! Even if myPINpad is totally secure, phishing sites (and text messages and push notifications) will spring up overnight requesting the customer to enter their card PIN and harvesting the results. So much for all the banks' investments over the years in keeping PINs secret. Social engineering trumps technology every time.

Thanks for the clarification Ralf.

Zapp was a great idea three and a half years ago, but I fear it has missed the boat. Digital products need a 'Lean Startup' approach - get something out into the marketplace and improve it quickly based on customer feedback. Instead, Zapp and their banking partners have tried to perfect the product before launch, so squandering their potential time-to-market advantage. Zapp could have been an established and trusted UK brand by now, and Apple would have had a real fight to enter the market. Now Zapp will be fighting for market share against the slickest marketing machine on the planet. Dean's technically correct that the jury's out in the case of Apple Pay v Pay by Bank, but I don't think it will take them long to reach a verdict.

The fact that "banks will not receive compensation for providing access to their accounts" is certainly a benefit for merchants and TPPs in the short term; but a value chain in which one key party incurs costs but no revenues is unlikely to survive in the longer term. 

A company moving to the US to avoid government intrusion in secret communications? Am I missing some ironic or satirical intent here?