Out-Law News | 22 Dec 2014 | 2:59 pm | 1 min. read
The industry body, which has a number of major banks as members, said it will explore options for allowing bank customers to both send and receive additional information alongside payments to that which is currently included with electronic payment transactions.
Tying "richer data" to payments could better inform customers about cash flow issues, it said. The initiative has the backing of the UK government which could sign commercial agreements with banks to deliver more information alongside payments, the Payments Council said.
"As the largest single user of the UK’s payment systems, the government is supportive of the industry exploring plans to incorporate richer data into payment systems," the Payments Council said. "On this basis, the payment industry is in discussion with a number of government departments to explore feasibility including: the Department for Work and Pensions (DWP); HM Revenue & Customs (HMRC); and the Department of Business, Innovation and Skills (BIS) with Cabinet Office leading on commercial arrangements."
The Payments Council said it could ask the UK's new Payment Systems Regulator to review any plans it develops "should there prove to be a feasible and commercial proposal for richer data". The PSR formally begins its role as regulator of certain payment systems in the UK from April 2015.
"The development of payment systems in the interests of all users is central to improving competition and outcomes for customers; this is exactly why we created the new Payment Systems Regulator," Andrea Leadsom, economic secretary to the Treasury, said. "Richer data offers some exciting avenues for innovation, and it is right that government and the industry works together to explore the case for developing these. If there proves to be a viable proposition, this will be an issue for the PSR to consider as it takes control of the strategy-setting process for the payments industry."
The Payments Council said that DWP had already identified the potential to use more data to inform the way it administers the benefits system. It said the ability to provide "richer data" to DWP could make it easier for individual benefits claimants to report their financial information to the department.
Lord Freud, minister for welfare reform, said: "Richer data means that anyone making a payment could add much more information about a transaction, not just the current 18 character limit. This could bring a wide range of benefits, from allowing automatic invoice reconciliation for business to enabling individuals to see more information with payments they receive. Richer data could also lower the cost to the taxpayer of administering benefits and reduce losses from error and fraud."