The UK’s Future of Payments review aims to use open banking and innovation to make public services better and more inclusive
Driven by a desire for the UK to “remain at the forefront of payment technology”, Chancellor of the Exchequer, Jeremy Hunt, recently launched the Future of Payments review. Alex Common, chief product officer of Pay360, discusses the possibilities and challenges the review presents and how open banking and increased fintech competitiveness can support better public services.
The Future of Payments review will report on how payments are likely to be made and the steps needed for the UK to deliver world-leading payments.
While this review is primarily conducted through a ‘consumer needs’ lens, the Chancellor’s review could be good news for the public sector, providing an opportunity for organisations to position themselves at the cutting edge of UK payments innovation.
With a modern payment system, organisations like local authorities can make it easier for people to pay their council tax or rent to reduce the risk of missing or late payments.
This focus is particularly timely given the Institute for Government’s warnings that the UK’s crisis-hit public services won’t recover before the next election, and significant financial injections are required to prevent further decline.
The consultation will explore key factors such as consumer retail transaction journeys and how customer experiences in the UK compare to other countries. The review outcomes will open up a range of positive changes across the payments sector.
By inviting stakeholders to provide their views, we will get real insight to help organisations develop more user-friendly journeys that support all users, regardless of their digital skills.
The review results could spark a new era of competition and innovation within the payments space, benefiting the public sector. This will drive forward-thinking strategies and open avenues for novel solutions to improve digital engagement and inclusion while offering opportunities to reduce costs.
Delivering better services to all
The public sector already spends significant time assessing financial vulnerabilities and is working towards offering more flexible payment options.
Vulnerability is a key challenge. According to a recent Age UK report, age, gender, income level, and social grade are all key factors in determining how comfortable people feel about digital services, such as online payments and banking.
Something needs to change, and the UK’s primary focus should naturally be on delivering better public services, ensuring engagement for everyone from digital natives to late- or non-adopters. Through advanced payment rails, seamless digital experiences can be created that cater to the evolving needs of the public.
This will bolster engagement and cultivate a stronger sense of community with the potential to reach a wider demographic, ensuring equal access to convenient and secure solutions. This well-rounded support should translate into improved financial well-being for individuals and the economy as a whole.
Cost savings and efficiency
Modern payment systems help ensure local authorities receive the revenue they are owed, helping wider society. Furthermore, organisations can start working smarter with a clearer idea of companies they can go to for support. Pay360, which Access PaySuite has recently acquired, is one such example of a company helping public sector organisations.
Integrating open banking and advanced payment services ensures a more secure digital journey. This increased security breeds trust and encourages more people to engage with public services via online platforms.
Revenue collection must align with people’s abilities to pay for the rollout to be a success. All local authority revenue streams need to become more user-friendly. Council Tax arrears are growing worrying, with over £4.9 billion owed to local authorities in England as of March 2022.
Although there will be several reasons for this, such as the cost of living crisis, we know that many older people are struggling to access local public services online, so it’s important to address this now. Open banking can achieve this and create a win-win situation, benefiting both public sector institutions and the individuals they serve.
A core focus for all public sector organisations is to deliver better digital services, which can greatly reduce the overall cost, fuelling better engagement with services. This is where payments using technologies such as open banking provide a huge opportunity to offer a seamless, frictionless, easy-to-navigate journey.
The government’s Future of Payments Review is pivotal as a catalyst for broader transformation, with the promise of reimagining payments and public service support to reflect the evolving needs of the public. Offering an intuitive and user-friendly experience will provide a secure and reliable way for local authorities to continue to generate revenue, which can then be channelled back into much-needed public services.
