The PSR Panel’s Digital Payments Initiative Report

The report identified barriers to the greater take-up of digital payments and proposed recommendations for addressing existing obstacles. It highlighted the potential of open-banking retail payments to increase competition between payment systems and promote innovation across the payments ecosystem. It also included a set of technical recommendations to release the potential of open banking.

The report is divided into two sections:

a. The first part of the report focuses on the four high-level areas that need to be addressed to enable greater take-up of digital payments:

• Improving awareness, understanding and trust in digital payment options;
• Reducing digital exclusion;
• Tackling barriers to new digital payment services and service features, including enabling new functionalities;
• Putting better data in place to monitor the transition to digital payments.

The Panel’s key recommendations include that the PSR should:

• engage with the industry to encourage the use of consistent terminology for account-to-account retail payments to help generate consumer familiarity and confidence.
• consider the need for merchants to be able to compare cards and other payment options (including account-to-account payments).
• challenge those having the tools to address the roots of digital exclusion and remove those barriers to the take-up of digital payments.
• improve data gathering which is relevant to achieving its strategic outcome for everyone to have access to payment services that meet their needs.

b. The second part of the report identifies open-banking retail payments as an area having the potential to increase competition between payment systems and services as well as promote innovation in new service features.

This section also includes a set of technical recommendations to tackle barriers to new digital payment services that could enable more people - particularly the cash-reliant - to use digital payments and unlock the potential of open banking.

The Panel noted there has been a range of recent innovations in card-based digital payment services enabling them to better address users’ needs, including: (i) banking and card app functionality that enables consumers to freeze their card themselves quickly and easily where they might have lost their card; (ii) gambling blocks on cards; and (iii) digital wallets with special features for people on low income.

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