The Payments Council was an organisation of

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

s in the United Kingdom, which set strategy for UK payment mechanisms from 2007 until 2015.

History

In his 2003

Pre-Budget Report The Spring Statement of the British Government, also known as the "mini-budget", is one of the two statements HM Treasury makes each year to Parliament upon publication of economic forecasts, the second taking place the previous year as the Autum ...

, then-

Chancellor Chancellor ( la, cancellarius) is a title of various official positions in the governments of many nations. The original chancellors were the of Roman courts of justice—ushers, who sat at the or lattice work screens of a basilica or law cou ...

Gordon Brown James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party (UK), Leader of the Labour Party from 2007 to 2010. He previously served as Chance ...

announced that the

Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...

(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.Review of the operations of the Payments Council (OFT1071)
OFT, March 2009 By the time of a planned two-year OFT review in 2009, the Payments Council had taken over some activities from the

Association for Payment Clearing Services The UK Payments Administration Ltd (UKPA) is a United Kingdom service company that provides people, facilities and expertise to the UK payments industry. UKPA was created on 6 July 2009, as a successor of the Association for Payment Clearing Ser ...

(APACS), which no longer exists. One of the tasks of the Payments Council was to implement the

Faster Payments Service The Faster Payments Service (FPS) is a United Kingdom banking initiative to reduce payment times between different banks' customer accounts to typically a few seconds, from the three working days that transfers usually take using the long-estab ...

, taking clearing times in the UK from among the slowest to among the fastest in the world. Criticisms made in 2009 included delays and shortcomings in delivery, and inability to ensure that Faster Payments members promptly passed on benefits to their customers. In 2010 it sponsored the Sort Code Validation Accreditation Scheme (SCVAS), which aimed to improve the distribution and validation of bank reference data within the UK payments industry. This was to be achieved via commercial providers offering products and services to verify sort codes used in

electronic payment An e-commerce payment system (or an electronic payment system) facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become incre ...

processing. The Payments Council clashed with the Government in 2011 over plans to abolish cheques. This led to a government consultation on separating the regulatory function from the industry body. The Payments Council went on to implement the mobile payment system

Paym Paym ( ) is a mobile payment system provided by banks and building societies in the United Kingdom. Recipients are identified by their mobile phone number instead of bank details such as sort code and account number. The service was developed b ...

and the Current Account Switch Service (CASS). In April 2015, the regulatory powers of the Payments Council were transferred to a new body, the

Payment Systems Regulator The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The FCA regulates financ ...

, set up by the

Financial Conduct Authority The Financial Conduct Authority (FCA) is a financial regulation, financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The ...

in accordance with section 40 of the Financial Services (Banking Reform) Act 2013. On 29 June 2015, the Payments Council was then relaunched as the trade association

Payments UK A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the ...

Structure

Board

The board of the Payments Council consisted of: * Independent non-voting chairman * Fifteen voting directors * An observer from the Bank of England Of the fifteen directors on the Board, eleven were industry-appointed directors who represented a cross section of Payments Council membership, and four independent directors. Each independent director held one voting seat and was appointed for a period of three years, which could be extended once for a further three years. The independent directors together had the power of veto and produced an annual report each year.

Membership

The Payments Council was a voluntary membership organisation, with a mix of full and associate members.

Contracts

On behalf of the UK payments industry as a whole, the Payments Council operated contracts with service providers such as BACS,

CHAPS Chaps ( or ) are sturdy coverings for the legs consisting of leggings and a belt. They are buckled on over trousers with the chaps' integrated belt, but unlike trousers, they have no seat (the term "assless chaps" is a tautology) and are not jo ...

, Faster Payments,

Cheque and Credit Clearing Company The Cheque and Credit Clearing Company Limited (C&CCC) is a UK membership-based industry body whose 11 members are the UK clearing banks. The company has managed the cheque clearing system in England and Wales since 1985, in all of Great Britain ...

Limited and the LINK ATM Scheme.

National Payments Plan

The National Payments Plan was an annual document in which the Payments Council set out its strategic vision for the future development of payment services in the UK. The first national payments plan was published in May 2008 and updates were published on an annual basis.

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.King, Mark
Abolition of cheques to be reconsidered
''The Guardian'', 14 April 2011 It also announced that the

cheque guarantee card A cheque guarantee card was an abbreviated portable letter of credit granted by a bank to a qualified depositor in the form of a plastic card that was used in conjunction with a cheque. The scheme provided retailers accepting cheques with grea ...

scheme would end in June 2011. The Payments Council advised a

Treasury Select Committee The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine the expenditure, administr ...

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, 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 consumers. The chairman of the inquiry,

Andrew Tyrie Andrew Guy Tyrie, Baron Tyrie, (born 15 January 1957) is a British politician and former chair of the Competition and Markets Authority. A member of the Conservative Party, he was Member of Parliament (MP) for Chichester from 1997 to 2017. Ty ...

MP, stated, "The Payments Council has not thought through its arguments carefully enough and its first piece of work on the cost–benefit 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. On 12 July 2011 the Payments Council announced it had cancelled the 2018 target date to close cheque clearing and that cheques will remain as long as customers need them. The

described the matter as a "debacle", stating

The Payments Council was able to take decisions affecting millions of people at its own initiative without any effective scrutiny by a regulatory body.

References

External links

*{{webarchive , url=https://web.archive.org/web/20150525115332/http://www.paymentscouncil.org.uk , date=May 25, 2015 , title=Payments Council
Pay Your Way, the Payments Council's consumer campaign
Financial services companies established in 2007 Financial services companies disestablished in 2015 Retail financial services Payment systems organizations Financial services in the United Kingdom Organizations established in 2007 2007 establishments in the United Kingdom 2015 disestablishments in the United Kingdom Banking in the United Kingdom