Our response to HMT’s Payment Landscape Review Call for Evidence
The payments landscape in the UK has changed drastically over the last few years with the introduction of PSD2 and Open Banking. As the UK government undertakes a review of the payments landscape, as well as fintech more broadly, we submitted our observations of some key limitations and opportunities for the development of the open banking ecosystem and wider payments landscape.
Founded in 2013, Plaid currently connects 3,000+ apps and services to 11,000+ financial institutions in the US, Canada, UK and Europe. In particular, Plaid builds technical API infrastructure that connects consumers, financial institutions, and fintech developers together, thereby giving consumers greater control over their own financial data.
The UK’s continued position as a leading global centre for finance and innovation requires continuous efforts to anticipate the future of financial services. Consumers increasingly expect individually tailored financial products and services, and the UK has a unique opportunity to take the lead globally by going above and beyond the existing requirements of the PSRs and Open Banking. That is why we believe it essential that the government and regulators continue to support the development of open banking.
We focus on four areas government needs to consider to ensure the development of the UK payments network:
- Payment Initiation Services - The biggest barrier to payment service user adoption of payment initiation is the lack of functionality (i.e. refunds, variable recurring payments and trusted beneficiaries are not currently available).
- Strong Customer Authentication - The 90-day re-authentication requirement should be removed if Her Majesty’s Government wants to maximise payment service user adoption of open banking services.
- Supervision and enforcement - HMT needs to give the FCA and CMA more supervisory powers to take action against Account Servicing Payment Service Providers who do not meet the requirements.
- Consumer Protection and liability - The liability model under the Payment Services Regulations is clear, any changes could result in higher costs for payment service users.
We support HMT’s objectives for the development of the UK payments network; however, there is still more work to do if the government wants to meet its goals and ensure the UK’s payments landscape continues to adapt to future developments and the evolving needs of consumers.