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What the Payment Strategy Forum’s Plan Means for Businesses Looking for Fintech Solutions
The financial sector is fundamental to the UK economy, and we now lead the way in the financial technology industry.
Payments are an important part of fintech and the UK’s financial regulator, the Financial Conduct Authority (FCA) underlined this importance when it set up the Payment Systems Regulator (PSR) in April 2015.
At the end of last month the PSR’s forum, the Payments Strategy Forum (PSF) launched its initial plans for the UK’s payments sector.
If your business is looking to innovate, and needs a backend payments solution it’s important to understand what these plans will mean for the fintech industry, and how they will affect your platform.
Here are three of the recommendations outlined in the PSF’s report:
1) A New Integrated Retail Payments Scheme:
By consolidating the Faster Payment Service (FPS), Bacs, and the Cheque and Credit Clearing Company, a new retail payments system would oversee the industry, providing a new base for regulation.
It is likely that changes would be needed for most, if not all, fintech payment platforms available on the market, so if you are currently looking for a backend payments solution make sure it is flexible enough to deal with any potential regulatory changes.
2) Using Existing Legislation and Making Enhancements if Needed to Deal With Cyber Crime:
Cyber crime has become a significant problem for the financial services industry.
According to Financial Fraud Action UK, financial fraud losses totalled £755 million in 2015, so the PSF is keen to find solutions for the issue.
One of the proposed solutions the PSF has outlined is providing an overarching approach to existing legislation and regulation, and to provide enhancements where needed.
It makes direct reference to the second Payment Services Directive (PSD2) and the fourth Money Laundering Directive (MLD4), which are both yet to be implemented.
Once again, for businesses looking to innovate within the financial services sector, and for those who are specifically looking for a backend payments solution, your platform will need to be flexible enough to adapt to PSD2 and MLD4 regulations, as well as any proposed regulation from the PSF.
3) Moving Towards a New Simplified Payments Platform for Retail Payments:
By transitioning retail payments to a simpler platform it will allow the payments industry to become more innovative, and will offer businesses new choices for their financial technology.
It will however provide more costs for businesses that have decided to build their own payments platforms, as they begin to seek upgrades to their platform.
Speaking at the launch of the PSF’s strategy, Andrew Hauser, the Executive Director for Banking, Payments, and Financial Resilience at the Bank of England, said that it seems likely that “the UK will have a new payments infrastructure for retail and wholesale payments alike”.
As the payment sector changes and regulations surrounding the sector are amended businesses searching for a backend payments platform need to choose a flexible and cost-effective solution.
Our Software as a Service (SaaS) platform is providing a powerful fintech solution for businesses across the spectrum, including charities and banks, and our consultative approach is gaining traction in an industry becoming increasingly crowded.
If you would like to get in touch with us for more information about how we can help with your banking platform or proposition, whether an established bank, an emerging bank, a community bank, a credit union or even a new concept bank, email hello@trusek.com or call 020 7048 0470
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