Banking reforms to shake-up payments system
The UK is to belatedly adopt a streamlined system of online payments, already in use on the continent, after government ministers gave their approval to a new banking regulator.
This would see Britain’s biggest banks lose control over the payments network, making it easier and cheaper for smaller banks to muscle in in the process.
It would also finally allow introduction of a system pioneered in Holland in which customers are spared the hassle of entering their full card details each time they make an online purchase.
Instead they would enter an authentication code for a service which stores the account numbers remotely.
Other innovations which could be introduced as a result of the changes include ‘floating’ cash machines for disabled customers and a mobile phone app which allows people to text friends money, similar to Barclays Pingit.
Financial secretary to the Treasury, Sajid Javid said: “The government is determined to open up competition in the banking sector so that it serves the needs of the British economy, businesses and customers.
“An open and transparent payments system is crucial to give new players freedom to challenge the big banks without unfair barriers. The reforms we are announcing today will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services.”