All we are saying is give cash a chance

An email arrives from Bank Machine's PR peeps..."You may well have seen that the UK Payments Council announced the results of their latest quarterly statistical report," says the PR lady. "Although trying desperately to make it a contactless story, the real story which they carefully buried were the stats showing that last year showed a record high in ATM withdrawals, beating the mark set in 2008."

It's true that the Payments Council press release went big on the fact that Britons sent two-thirds more money through Faster Payments in the last three months of 2011 compared to the previous year, with the ATM stats thrown in almost as an afterthought. So in the interest of fairness...The busiest single second in the LINK network’s 25 year history was recorded at 13:03:57 on Friday 28 October, with 482 transactions made. Overall, we used cash machines 2.87 billion times during the year, taking out £191 billion, and the overwhelming majority of these transactions were free. Fewer than one in 30 ATM withdrawals were at a pay-to-use machine in the last three months of 2011, the lowest percentage for seven years.   

And comment from Ron Delnevo, MD at Bank Machine: "The level of ATM usage vividly demonstrates once again that the British public continue to place their trust in cash. Neither flashy hyping of unproven gimmicks like "contactless" cards, nor attempts to limit access to ATMs, have prevented UK citizens from continuing to exercise their right to choose cash as their number one payment method."

According to the Payments Council, the underlying reasons for the record year are "the low levels of withdrawals a year earlier during the period of heavy snowfall, the increase in the number of free-to-use machines, coupled with an increase in the number of machines dispensing £5 notes, and a possible slight increase in demand for cash by people who prefer to use cash as a budgeting tool to control their spending."

There you go, everyone's happy.

Faster Payments anniversary update

Guest blog post by Marc Terry, director of transaction services, VocaLink

Last Friday was the third anniversary of the launch of the UK’s Faster Payments Service. Last week also saw the one billionth transaction being processed. So, what better time to look at how far the service has come and what lies ahead?

When VocaLink set up and launched the service on its real-time infrastructure in May 2008 on behalf of CHAPS Co., it’s fair to say that it was considered a regulatory headache. However, transaction volumes have increased year on year on year. 80 million Faster Payments transactions were made in the first year, nearly 300 million in 2009 and over 400 million in 2010. This year we expect to see half a billion.

The service has caught on quickly with consumers too. Half of regular standing orders have already migrated and individuals using the system are making ten million more one-off payments every month than they did before the system was set up. That’s why 13 banks and building societies have now signed up to the service.

Looking to the future, banks should view the Faster Payments Service as a critical component to their payments strategy. It provides a significant opportunity to differentiate and deliver high levels of customer service. As well as continuing to encourage customers to take advantage of the service, banks should think laterally and use the channel to support payments innovation.

Through our pioneering work to develop the real-time payments infrastructure for faster payments, we are developing the technology for our mobile payments proposition.  The unique element of our proposition is to link bank accounts to mobile phone numbers so that payment can be made instantly, without the need for the payee to reveal bank account details. So, with consumers increasingly expecting anything done over mobile to be instantaneous, VocaLink’s real-time payments infrastructure can play a key role in the success of this initiative. In research we carried out last year, consumers and sole traders even said they’d be willing to pay for this service.

Looking beyond our borders, the roll-out of the Faster Payments Service has positioned the UK at the forefront of the industry’s most significant payment innovation in decades. Other countries across the world have been following developments closely and in the coming months we expect banks across Europe and beyond to look to reap the benefits of real-time payments.