At the tail end of last year, I had the pleasure of participating in a NatWest event on the future of payments.Consumer protection means nothing if it doesn’t apply where the consumer is and when the consumer needs itWe talked about APIs. We talked about open banking. We talked about BaaS. We talked about regulation. A lot. Because there is a lot of regulation. Because regulation matters. Because consumer protection matters.And, rather unexpectedly, we talked about cash.Richard Talbott, in fact, shared some research with us about the patterns of cash usage that, I must confess, surprised me.Although the research confirms some of the things you would expect (vulnerable communities tend to rely on cash more and our reliance on cash overall is reducing), it also found that young people (yes, yes, the digital natives) tend to have a (statistically significant if not overwhelming) preference for cash over older people.And also a whopping 81% of UK adults use cash for convenience. Not preference, you realise, that number is considerably lower. But convenience.Who are these people and where do they live? I thought smugly to myself as I read the research sitting pretty in almost entirely cashless London.Well, dear reader. I was about to find out exactly who those people were.Because, on an annual Christmas shopping trip with a very dear friend, opting for cash in the name of convenience became a very real thing.What happened is that we went to a shop, I went to pay first, the transaction went through fine (so it hit the ledger of my bank) and then their payment gateway provider timed out, so the transaction got stuck in limbo. Not settled. Not cancelled. Just there on my account. Not there on theirs.“Oh, it happens all the time,” they said. “It’s OK, it will sort itself out. Pay again.”Now.What actually happened is that the UK has faster payments, so latency matters.Which means that the latency of all the parts of the payment chain matter.And if your e-commerce gateway (as was the case with this situation) or your payment initiation provider have decided they don’t need to have the same latency SLAs as the issuers or the banks, then you have transactions that make it all the way through to the end but can’t settle because… latency.That is what happened.I knew that. My friend knew that.The shop assistant didn’t. Neither did her manager. Neither did the person at the other end of the phone when they called their provider. The solution offered by all three was ‘keep tapping your card, not all transactions will go through, it will be fine in the end’.It was an experience, let me tell you.Because the proposed solution of keep tapping would mean that someone could be out of pocket for (the amount owed) x (number of times tapped) for an undefined period of time until they sorted themselves out. Which, as it turned out, was seven working days.Ultimately, the consumer is asked to underwrite the choice of supplier made by the merchant
Gio. Feb 13th, 2025
