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Payments Council logo

The Payments Council was an organisation of financial institutions in the United Kingdom, that set strategy for UK payment mechanisms from 2007 until 2015.[1]

History

In his 2003 Pre-Budget Report, then-Chancellor Gordon Brown announced that the Office of Fair Trading (OFT) would lead a new Payments Systems Task Force. The OFT recommended to the Chancellor in 2006 that the Task Force should establish a new body responsible for the integrity and efficiency of co-operative payment systems in the UK. This was set up as the Payments Council in 2007.[2][3]

By the time of a planned two-year OFT review in 2009, the Payments Council had taken over some activities from the Association for Payment Clearing Services (APACS), which no longer exists. One of the tasks of the Payments Council was to implement the Faster Payments Service, taking clearing times in the UK from among the slowest to among the fastest in the world. Criticisms made in 2009 included delays and shortcomings in delivery, and inability to ensure that Faster Payments members promptly passed on benefits to their customers.[2]

In 2010 it sponsored the Sort Code Validation Accreditation Scheme (SCVAS), which aimed to improve the distribution and validation of bank reference data within the UK payments industry. This was to be achieved via commercial providers offering products and services to verify sort codes used in electronic payment processing.[4]

The Payments Council clashed with the Government in 2011 over plans to abolish cheques. This led to a government consultation on separating the regulatory function from the industry body.[5]

The Payments Council went on to implement the mobile payment system Paym and the current account switch service.[6]

In April 2015, the regulatory powers of the Payments Council were transferred to a new body, the Payment Systems Regulator.[7] On 29 June 2015, the Payments Council was then relaunched as the trade association Payments UK.[8]

Structure

Board

The board of the Payments Council consists of:

  • Independent non-voting chairman
  • 15 voting directors
  • An observer from the Bank of England

Of the 15 directors on the Board, 11 are industry-appointed directors who represent a cross section of Payments Council membership, and 4 independent directors. Each independent director held one voting seat and was appointed for a period of three years, which could be extended once for a further three years. The independent directors together had the power of veto and produced an annual report each year.[9]

Membership

The Payments Council was a voluntary membership organisation, with a mix of full and associate members.[10]

Contracts

On behalf of the UK payments industry as a whole, the Payments Council operated contracts with service providers such as BACS, CHAPS, Faster Payments, Cheque and Credit Clearing Company Limited and the LINK ATM Scheme.[2]

National Payments Plan

The National Payments Plan was an annual document in which the Payments Council set out its strategic vision for the future development of payment services in the UK.

The first national payments plan was published in May 2008 and updates were published on an annual basis.[11]

Closure of cheque clearing

The first major move of the Payments Council, in 2009, was to agree to a target of 2018 for the closure of cheque clearing in the UK.[12][13] It also announced that the cheque guarantee card scheme would end in June 2011.

The Payments Council advised a Treasury Select Committee inquiry in February 2010 that cheques were in "terminal decline", down to 3.5 million per day in 2009 from a peak of 11 million in 1990.[12] After lobbying from the charity sector, the Council reaffirmed in October 2010 that the 2018 closure is conditional on adequate alternatives being in place by 2016.[14]

However, in April 2011 the Select Committee reopened its inquiry into the 2018 target date, after receiving a large volume of correspondence from small businesses, voluntary organisations and older people who were still using cheques.[15] The inquiry will also consider the structure and performance of the Payments Council, including whether it is sufficiently accountable for the impact of its decisions on consumers.[12][16]

The chairman of the inquiry, Andrew Tyrie MP, stated, "The Payments Council has not thought through its arguments carefully enough and its first piece of work on the cost–benefit of abolishing cheques was clearly defective."[12] The Payments Council welcomed the opportunity to reassure the public that cheques would not be abolished before acceptable alternatives were available.[17]

On 12 July 2011 the Payments Council announced it had cancelled the 2018 target date to close cheque clearing and that cheques will remain as long as customers need them.[18]

The Treasury Select Committee described the matter as a "debacle",[19] stating

The Payments Council was able to take decisions affecting millions of people at its own initiative without any effective scrutiny by a regulatory body.

See also

References

  1. ^ "Payments Council". UK Payments Administration. Archived from the original on 2013-01-20.
  2. ^ a b c Review of the operations of the Payments Council (OFT1071), OFT, March 2009
  3. ^ Archived 2014-04-24 at the Wayback Machine, Payments Council press release, 2007
  4. ^ Archived 2011-01-22 at the Wayback Machine
  5. ^ "UK Payments Council to be stripped of powers as govt seeks 'fresh start'". FinExtra. 23 July 2012. Retrieved 4 July 2015.
  6. ^ "New trade body launches". Credit Today. Athene Publishing Limited. 29 June 2015. Retrieved 4 July 2015.
  7. ^ Wallace, Tim (29 June 2015). "Big banks accused of running cartel in payments". Daily Telegraph. Retrieved 4 July 2015.
  8. ^ "Payments UK launches to become new voice for industry". Payments UK. 29 June 2015. Retrieved 3 July 2015.
  9. ^ Archived 2013-01-18 at the Wayback Machine
  10. ^ Archived 2013-01-18 at the Wayback Machine
  11. ^ Archived 2013-01-20 at the Wayback Machine
  12. ^ a b c d King, Mark. Abolition of cheques to be reconsidered, The Guardian, 14 April 2011
  13. ^ Archived 2011-07-24 at the Wayback Machine. Payments Council press release, 16 December 2009.
  14. ^ Mair, Vibeka. Abolition of cheques in 2018 not definite, says Payments Council, Civil Society, 29 October 2010
  15. ^ Moore, Elaine; Ross, Alice. Inquiry reopened into ban on cheques. Financial Times, 14 April 2011. Retrieved 19 April 2011. Template:WebCite
  16. ^ The future of cheques, Commons Select Committee, 14 April 2011
  17. ^ Cheque abolition to be examined by MPs, BBC News, 14 April 2011
  18. ^ Archived 2011-07-15 at the Wayback Machine. Payments Council, 12 July 2011.
  19. ^ "Payments Council carpeted over cheque guarantee card as politicians smell blood". FinExtra. 16 November 2011. Retrieved 4 July 2015.
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