Payments Council
Encyclopedia
Financial institution
In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
s in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
that sets strategy for UK payment mechanisms.
History
In his 2003 Pre-Budget ReportPre-Budget Report
In the United Kingdom, the Autumn Statement, at times the Summer Statement and the Pre-Budget Report , is one of the two statements HM Treasury makes each year to Parliament upon publication of economic forecasts, the other being the annual Budget...
, the Chancellor
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
announced that the Office of Fair Trading
Office of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
(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.
By the time of a planned 2-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 has been to implement a phased roll-out the Faster Payments Service, taking clearing times in the UK from among the slowest to among the fastest in the world. Critiques have been made about delays and shortcomings in delivery and for inability to ensure Faster Payments members promptly pass on benefits to their customers.
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. It also announced that the cheque guarantee cardCheque guarantee card
A cheque guarantee card is essentially an abbreviated portable letter of credit granted by a bank to a qualified depositor, providing that when he is paying a business by cheque and the retailer writes the card number on the back of the cheque, the cheque is signed in the retailer's presence, and...
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. After lobbying from the charity sector
Charitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
, the Council reaffirmed in October 2010 that the 2018 closure is conditional on adequate alternatives being in place by 2016.
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. 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 consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s.
The chair of the inquiry, Andrew Tyrie
Andrew Tyrie
Andrew Guy Tyrie is a Conservative Party politician in the United Kingdom. He is the Member of Parliament for Chichester, and was first elected in the 1997 general election...
MP, stated, "The Payments Council has not thought through its arguments carefully enough and its first piece of work on the cost-benefit
Cost-benefit analysis
Cost–benefit analysis , sometimes called benefit–cost analysis , is a systematic process for calculating and comparing benefits and costs of a project for two purposes: to determine if it is a sound investment , to see how it compares with alternate projects...
of abolishing cheques was clearly defective." The Payments Council welcomed the opportunity to reassure the public that cheques would not be abolished before acceptable alternatives were available.
Board
The Board of the Council includes an independent Chair. As a further safeguard for the public interestPublic interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
, four more independent members, when voting together, have a right of veto
Veto
A veto, Latin for "I forbid", is the power of an officer of the state to unilaterally stop an official action, especially enactment of a piece of legislation...
over the other 11 Board members who represent the payments industry.
Membership
The Payments Council is a voluntary membership organisation, with 30 members (correct on 03 May 2011):- Allied Irish Bank (GB)
- American ExpressAmerican ExpressAmerican Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
Services Europe Ltd - Bank Machine Limited
- Bank of AmericaBank of AmericaBank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
N.A. - Bank of EnglandBank of EnglandThe Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
- Bank of IrelandBank of IrelandThe Bank of Ireland is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Irish banking history...
- The Bank of New York Mellon
- Bank of Tokyo-Mitsubishi UFJ , Ltd.
- Barclays Bank plc
- CitibankCitibankCitibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
NA (London Branch) - Clydesdale BankClydesdale BankClydesdale Bank is a commercial bank in Scotland, a subsidiary of the National Australia Bank Group. In Scotland, Clydesdale Bank is the third largest clearing bank, although it also retains a branch network in London and the north of England...
plc - Co-operative BankCo-operative BankThe Co-operative Bank plc is a commercial bank in the United Kingdom and Guernsey, with its headquarters in Manchester.The bank markets itself as an ethical bank, and refuses to invest in companies involved in the arms trade, global climate change, genetic engineering, animal testing and use of...
plc (The) - Danske BankDanske BankDanske Bank is a Danish bank. The name literally means "Danish Bank" It was founded 5 October 1871 as Den Danske Landmandsbank, Hypothek- og Vexelbank i Kjøbenhavn ....
- Deutsche BankDeutsche BankDeutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
AG - Group 4 SecuricorGroup 4 SecuricorG4S plc is a global security services company headquartered in Crawley, United Kingdom. It is the world's largest security company measured by revenues and has operations in more than 125 countries...
- HandelsbankenHandelsbankenSvenska Handelsbanken AB is a Swedish bank.-History of Svenska Handelsbanken:The history of Svenska Handelsbanken goes back to 1871 when a number of prominent companies and individuals in Stockholm's business world founded Stockholms Handelsbank...
- HSBC BankHSBC BankHSBC Bank may refer to any one of the following principal local banks for HSBC Group:- Americas :* HSBC Bank Argentina* HSBC Bank Brazil* HSBC Bank Canada* HSBC Bank Chile* HSBC Bank Costa Rica* HSBC Bank El Salvador* HSBC Bank Honduras...
plc - ING Direct
- JPMorgan Chase Bank N.A. (London Branch)
- Lloyds TSB Bank plc
- Nationwide Building SocietyNationwide Building SocietyNationwide Building Society is a British building society, and is the largest in the world. It has its headquarters in Swindon, England, and maintains significant administration centres in Bournemouth and Northampton...
- Northern RockNorthern RockNorthern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for...
plc - PayPalPayPalPayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
(Europe) Limited - Post Office Limited
- Royal Bank of ScotlandRoyal Bank of ScotlandThe Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
plc - Santander UKSantander UKSantander UK plc is a wholly owned subsidiary of the Spanish Santander Group. Based in the United Kingdom, it operates under the name of Santander. Santander is the third largest bank in the UK in terms of deposits, the second largest in terms of mortgages held, and the fourth largest in terms of...
plc - Standard Chartered BankStandard Chartered BankStandard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
- Voice Commerce Group
- Wells FargoWells FargoWells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
Other bodies such as SWIFT
Swift
The swifts are a family, Apodidae, of highly aerial birds. They are superficially similar to swallows, but are actually not closely related to passerine species at all; swifts are in the separate order Apodiformes, which they share with hummingbirds...
hold associate membership.
Contracts
On behalf of the UK payments industry as a whole, the Payments Council operates contracts with service providers such as BACSBACS
Bacs Payment Schemes Limited is a United Kingdom scheme for the electronic processing of financial transactions. BACS direct debits and BACS direct credits are made using the BACS system...
, CHAPS
CHAPS
The Clearing House Automated Payment System or CHAPS is a British company established in London in 1984, which offers same-day sterling fund transfers...
, Cheque and Credit Clearing Company
Cheque and Credit Clearing Company
The Cheque and Credit Clearing Company Limited is a membership-based industry body with 12 settlement members. The company has managed the cheque clearing system in England and Wales since 1985, and in all of Great Britain since 1996 when it took over responsibility for managing the Scottish...
Limited and the LINK
LINK (UK)
LINK is a shared interbank network of automated teller machines operating in the United Kingdom. The network counts 37 member institutions, of which many are various banks and building societies issuing LINK ATM cards, and the remainder are independent ATM operators who do not issue cards...
ATM Scheme.
Sort Code Validation Accreditation Scheme
The Sort Code Validation Accreditation Scheme is a scheme sponsored by the Payments Council, aimed at improving the distribution of bank reference data and the quality and accuracy of reference data used within the UK payments industry.The Sort Code Validation Accreditation Scheme (SCVAS) was launched in 2010. It is aimed at commercial providers offering sort code validation products and services which are used by organisations to manage their electronic payment processing.
Accreditation under the scheme requires products to satisfy certain 'Threshold Criteria' set by the UK Payments Council. In particular these criteria stipulate the minimum frequency with which bank reference data must be updated.