The Government's review of cash and digital payments - Which? response

Which? responds to the government's review of cash and digital payments.

In response to HM Treasury's call for evidence on cash and digital payments in the new economy, Which? has welcomed the growing adoption of digital payments by consumers and businesses, and the benefits these bring, in particular, of greater convenience and security.

However, Which? is concerned that misaligned industry incentives are leading to over-promotion of certain electronic payment methods, namely, retail card payments, at the expense of traditional cash or more innovative new payment methods, such as prospective Open Banking-enabled payment services.

Which?'s submission to the call for evidence makes four recommendations:

• The Government, working closely with UK and EU regulators, should prioritise reform and enforcement of existing regulation, in particular, the EU Interchange Fee Regulation. 
• The Government should urgently consider the growing consolidation of the payments market and take action to ensure that the UK does not end up with the scenarios implied by industry forecasts.
• The Government should particularly look at international experience of payment systems regulation, such as the US and Australia, especially recommendations by Australia’s Productivity Commission to ban payment card interchange fees and to mandate greater competition between alternative payment systems.
• The Government should address other problems in the payment systems market, of significant competition issues, consumer access, and financial inclusion, which are resulting in detriment to consumers and other payment systems’ users.