16 March 2015
CEO opinion – 2015: Driving payments innovation
Against the backdrop of a payments system that is undergoing more change now than at any point in its history, we go into 2015 with a strong resolve to build on the achievements of the last 12 months. We had an excellent 2014 in terms of implementing ground-breaking innovation, surpassing the expectations of our customers and delivering the secure, resilient and reliable payments platform at the heart of the UK economy.
Last year the Payments Council launched Paym, the instant mobile payments system built on VocaLink technology, which has enabled over two million people to benefit from a more convenient and secure form of payment.
The Current Account Switch Service completed its first full year of operation with 1.16 million bank account switches and underpinning all of this was another year of very strong service delivery, with our core systems continuing to provide always-on, highly performing and resilient services.
Our international reputation continued to grow following the successful launch in March of the new real-time payments system FAST (Fast and Secure Transfers) in Singapore, with the underpinning technology provided by VocaLink. It is this platform that has fired the imagination of national economies around the world to the possibilities that a real-time payments infrastructure can offer.
It is no surprise therefore that we have delivered a strong financial performance which will allow us to continue to invest in infrastructure, innovation and in the people that are behind it.
2015 and beyond
We have much to be positive about this year. The payments system is changing rapidly, driven by a confluence of issues – new regulation, new technology and the growing expectations of digitally-inclined consumers and businesses.
Zapp, our mobile payments business, is a great example of how we will deliver on these expectations. Zapp gives consumers and businesses the ability to conduct their business directly from bank account to bank account. In doing so it will bypass much of the expense and delay that small businesses currently endure and provide the high level of convenience and security that consumers demand.
From a regulatory perspective the Payment Systems Regulator (PSR) introduces economic regulation to the UK payments market. We welcome its establishment, with its focus on innovation and competition and, in particular, its focus on opening up access to payment systems. Although we operate the core payments system infrastructure, we do not control access requirements nor do we determine the rules of the payments system; these are the responsibility of the payments schemes. We are building the technology to enable that open access and we look forward to the necessary scheme changes that will enable this technology to be exploited.
The Faster Payments infrastructure is capable of supporting direct access for all service users that want to do so. This would help to level the playing field between banks and non-banks and ultimately facilitate a completely new proposition: banks, businesses, consumers and government should all be able to access the payments system directly. In opening up access to the payments system, new fintech industries could grow from this platform and in doing so contribute to the PSR’s ambitions of driving more innovation, more competition and a better payments system for users.
However, the most important consideration is to continue to have core infrastructures that are stable, secure and resilient, where future collaborative innovation can be developed with confidence.
The VocaLink infrastructure should not be taken for granted. The UK has a world-leading national real-time 24x7/365 payments system. No other country has this foundation; not the US, Canada, Australia, Japan nor any payments processor in the Eurozone. Indeed all of these markets lack a unified, interoperable structure. VocaLink is, or has recently been, engaged in advising all of these economies on how to learn from the UK experience and, indeed, on how to build upon it to deliver interoperable, ubiquitous, always-on real-time systems.
The highly resilient core infrastructure already in place in the UK, that already connects tens of thousands of organisations, is the best possible foundation for the PSR to achieve its objectives.
So 2015 represents a significant opportunity for VocaLink to continue to deliver the world-class innovation that has become expected from us both domestically and internationally. We will work with the PSR to help it achieve its objectives, with our customers to help them deliver ‘always on’ and digitally-empowered services and with the Government to enable it to deliver better public services to the UK’s citizens.