Two stories hit the headlines recently that, while appearing to have nothing in common, actually resonate quite sharply with the payments industry.
The first was news from the Payments System Regulator, now seemingly showing its teeth, that it might want banks to sell their stake in VocaLink.
The other was the news that BT was being forced by Ofcom to allow rivals access to its Openreach network so as to provide a better internet service for all.
So, what have these two stories got in common? In essence, it’s heritage companies (BT and the major banks) owning a network that the Young Turks of their respective industries want to access on a level playing field.
Openreach builds and maintains the UK’s vast copper and fibre network that connect nearly all businesses and homes to the national broadband and telephone network. But it has faced criticism from rivals over the standard of service and repairs.
To best explain this, imagine the UK’s broadband network as the rail network. And, imagine BT Openreach as Network Rail (owner of all the railway infrastructure in the UK). So far, so good. But imagine that Openreach also own trains and give their own trains priority on the network leaving Virgin, Northern, TPE, Arriva and the rest scrabbling for scraps.
This is the situation that Ofcom believes the UK’s internet infrastructure is in.
But what has this got to do with VocaLink? The short answer is; it is pretty much the same situation.
VocaLink owns the UK’s payments network. This is the network that underpins the UK’s Direct Debit system, Link ATM network, Bacs and Faster Payments systems.
It’s the railway track on which the vast majority of UK payments travel on. It’s the fibre-optic cable of money movements. It’s powering Zapp (a mobile payments system) and Paym (a system where users can make payments to other users using just their phone number) and the Payment System Regulator has decided that this is unfair.
The PSR, a recently formed body designed to ensure fairness and a level playing field in payments, has had VocaLink in its sights for a year. Last April, it referred to VocaLink as a “cartel” that was bad for customers and bad for innovation.
It has to be said that the PSR has a very good point. The payments industry is a young industry where entrepreneurs fighting to have their innovations noticed by banks, merchants, issuers and the public. This is a hard enough task without the existing banks having the cards stacked firmly in their favour.
So, just as Ofcom telling BT that rivals have to have access to Openreach, the PSR telling the banks that they have to sell their stakes in VocaLink is all about opening access and making sure that everyone in the payments industry has the chance to compete on a level playing field.
It is a welcome move and one which, we would hope, will encourage more diversity and opportunity. And that is very good news for our industry.
Two stories hit the headlines recently that, while appearing to have nothing in common, actually resonate quite sharply with the payments industry.
The first was news from the Payments System Regulator, now seemingly showing its teeth, that it might want banks to sell their stake in VocaLink.
The other was the news that BT was being forced by Ofcom to allow rivals access to its Openreach network so as to provide a better internet service for all.
So, what have these two stories got in common? In essence, it’s heritage companies (BT and the major banks) owning a network that the Young Turks of their respective industries want to access on a level playing field.
Openreach builds and maintains the UK’s vast copper and fibre network that connect nearly all businesses and homes to the national broadband and telephone network. But it has faced criticism from rivals over the standard of service and repairs.
To best explain this, imagine the UK’s broadband network as the rail network. And, imagine BT Openreach as Network Rail (owner of all the railway infrastructure in the UK). So far, so good. But imagine that Openreach also own trains and give their own trains priority on the network leaving Virgin, Northern, TPE, Arriva and the rest scrabbling for scraps.
This is the situation that Ofcom believes the UK’s internet infrastructure is in.
But what has this got to do with VocaLink? The short answer is; it is pretty much the same situation.
VocaLink owns the UK’s payments network. This is the network that underpins the UK’s Direct Debit system, Link ATM network, Bacs and Faster Payments systems.
It’s the railway track on which the vast majority of UK payments travel on. It’s the fibre-optic cable of money movements. It’s powering Zapp (a mobile payments system) and Paym (a system where users can make payments to other users using just their phone number) and the Payment System Regulator has decided that this is unfair.
The PSR, a recently formed body designed to ensure fairness and a level playing field in payments, has had VocaLink in its sights for a year. Last April, it referred to VocaLink as a “cartel” that was bad for customers and bad for innovation.
It has to be said that the PSR has a very good point. The payments industry is a young industry where entrepreneurs fighting to have their innovations noticed by banks, merchants, issuers and the public. This is a hard enough task without the existing banks having the cards stacked firmly in their favour.
So, just as Ofcom telling BT that rivals have to have access to Openreach, the PSR telling the banks that they have to sell their stakes in VocaLink is all about opening access and making sure that everyone in the payments industry has the chance to compete on a level playing field.
It is a welcome move and one which, we would hope, will encourage more diversity and opportunity. And that is very good news for our industry.
Two stories hit the headlines recently that, while appearing to have nothing in common, actually resonate quite sharply with the payments industry.
The first was news from the Payments System Regulator, now seemingly showing its teeth, that it might want banks to sell their stake in VocaLink.
The other was the news that BT was being forced by Ofcom to allow rivals access to its Openreach network so as to provide a better internet service for all.
So, what have these two stories got in common? In essence, it’s heritage companies (BT and the major banks) owning a network that the Young Turks of their respective industries want to access on a level playing field.
Openreach builds and maintains the UK’s vast copper and fibre network that connect nearly all businesses and homes to the national broadband and telephone network. But it has faced criticism from rivals over the standard of service and repairs.
To best explain this, imagine the UK’s broadband network as the rail network. And, imagine BT Openreach as Network Rail (owner of all the railway infrastructure in the UK). So far, so good. But imagine that Openreach also own trains and give their own trains priority on the network leaving Virgin, Northern, TPE, Arriva and the rest scrabbling for scraps.
This is the situation that Ofcom believes the UK’s internet infrastructure is in.
But what has this got to do with VocaLink? The short answer is; it is pretty much the same situation.
VocaLink owns the UK’s payments network. This is the network that underpins the UK’s Direct Debit system, Link ATM network, Bacs and Faster Payments systems.
It’s the railway track on which the vast majority of UK payments travel on. It’s the fibre-optic cable of money movements. It’s powering Zapp (a mobile payments system) and Paym (a system where users can make payments to other users using just their phone number) and the Payment System Regulator has decided that this is unfair.
The PSR, a recently formed body designed to ensure fairness and a level playing field in payments, has had VocaLink in its sights for a year. Last April, it referred to VocaLink as a “cartel” that was bad for customers and bad for innovation.
It has to be said that the PSR has a very good point. The payments industry is a young industry where entrepreneurs fighting to have their innovations noticed by banks, merchants, issuers and the public. This is a hard enough task without the existing banks having the cards stacked firmly in their favour.
So, just as Ofcom telling BT that rivals have to have access to Openreach, the PSR telling the banks that they have to sell their stakes in VocaLink is all about opening access and making sure that everyone in the payments industry has the chance to compete on a level playing field.
It is a welcome move and one which, we would hope, will encourage more diversity and opportunity. And that is very good news for our industry.