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Knocking down the payment barriers - on demand Q&A session

01 September 2014  |  19779 views  |  1


On demand



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Increasing access to UK payments schemes and fostering a more competitive banking landscape. A special Q&A with VocaLink’s payments services director, Chris Dunne.

Joining and connecting to any of the UK payment schemes is currently relatively costly and complex, particularly for challenger banks. Scheme membership is dominated by the Tier 1 banks and there is little inter-scheme coordination and no consolidated way to access multiple services across different schemes which in itself is a driver of cost and a barrier to entry.

This is a key area of interest for the incoming Payment Systems Regulator. There are already initiatives underway to help open access to payment system, such as a move to pre-funded settlement for Faster Payments and BACS and lowering the entry requirements.

  • How far can entry requirements be relaxed without putting the system at risk?
  • What benefits will this bring to small institutions, focusing on operational information, connectivity, certification and settlement management?
  • How would access to Faster Payments improve competitiveness?
  • Should KYC be seen as a competitive area or should it be supported by a utility?
  • Will the new Payments Services Regulator have any impact on competitiveness in the UK retail banking space?

Chris Dunne sat down with Finextra to answer these questions in a webcast discussion first broadcast live on September 23. .

When: On demand

Where: www.finextra.com

Register now

Comments: (1)

A Finextra member
A Finextra member 12 September, 2014, 12:15

A good initiative - I’m looking forward to the session. Opening up the market to innovators in the payments space is long overdue. In order to effectively support innovation, the barriers currently facing emerging fintech firms - notably lack of ready access to the banking infrastructure needed to realise their innovative ideas – must be addressed. As you say, regulators here in the UK and wider EU are starting to address this: Gartner and other analysts have been recommending it for some time.

We at Ixaris believe in ‘open’ payments, but we also appreciate the challenges banks face when it comes to opening up their systems while maintaining the highest levels of security we all want them to maintain. How that ‘opening up’ can be achieved, technically speaking, is a key issue where wider understanding and possibly new technology (!) can help.

For example, several major analysts recommend wider use of APIs as the way to achieve greater openness. But APIs – unless complemented with additional security measures that often get in the way of the user experience, give the application provider the opportunity to embed a form of security vulnerability called ‘man-in-the-middle’ between banks and their customers, and therefore can only be given to trusted parties. In practical terms that will mean keeping development in the bank/FI or to a limited set of approved partners.

Another well-known approach to improving security while giving access to third party providers is ‘tokenisation’ which makes it hard for third-party providers to access and use unauthorized data but this still relies on a degree of trust of the payment intermediary (which relies on the customer’s credentials to obtain the token in the first place) not to misuse the token, and is not appropriate where secure interaction involves the customer or the bank disclosing very sensitive data such as entering the bank account password via the intermediary.

For wider innovation in payments and digital banking we will need something else. That’s why Ixaris are introducing a patent-pending technology called PayML. PayML is a simple extension to HTML that enables mainstream web developers (as distinct from more skilled coders) to work with payment solutions, selecting the function they want to make available, modifying to modern standards the form/layout of the user interface and the flow of the whole process for the target user – all without access to the secure bank/FI environment on which the target payment solution will run, so without the risk of compromising security.

PayML will help take development of payment solutions closer to the user and alleviate some of the burden on and costs associated with access to APIs and the coding required develop payment solutions.  Hence PayML is another tool that complements open APIs and tokenization, and should help banks open up to wider access without compromising security.



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