payment systems and cash management implications
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Payment systems and cash management implications
Nicola Coyne Head of Immediate Payments,Barclays Corporate Banking
2 | Payment systems and cash management implications | 25 February 2020
• Cash & digital payments in the new economy
• Real-time payments
• Request to Pay
• The changing regulatory landscape
Agenda
3 | Payment systems and cash management implications | 25 February 2020
UK Payment industry statistics
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
-
50,000
100,000
150,000
200,000
250,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Volu
me
(000
's) -
CHAP
S
Volu
me
(000
's) -
Bacs
Cre
dits
/FPS
Bacs, CHAPS and Faster Payments total market volumes
Bacs Credits FPS CHAPS Linear (Bacs Credits) Linear (FPS) Linear (CHAPS)
Source: Data obtained from UK Finance; UK Payment Statistic 2018 report & from Pay.UK Monthly Payment Statistic 1990 to Jan 2020
4 | Payment systems and cash management implications | 25 February 2020
UK Payment industry statistics
Data obtained from UK Finance; UK Payment Statistic 2018 report & from Pay.UK Monthly Payment Statistic 1990 to Jan 2020
£-
£1,000,000
£2,000,000
£3,000,000
£4,000,000
£5,000,000
£6,000,000
£7,000,000
£8,000,000
£9,000,000
£-
£50,000
£100,000
£150,000
£200,000
£250,000
£300,000
£350,000
£400,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Valu
e in
£m
-CH
APS
Valu
e in
£m
-Ba
cs C
redi
ts/F
PS
Bacs, CHAPS and Faster Payments total market values
Bacs Credits FPS CHAPS Linear (Bacs Credits) Linear (FPS) Linear (CHAPS)
5 | Payment systems and cash management implications | 25 February 2020
Real-time payments in Europe
SEK
PLN
GBP
BGN
DKK
2,079 Payment Service Providers
from 22 countries
have joined the SEPA Instant Scheme
= 51% of European PSPs
= SCTInst participating country
Key:
Source of data: European Payments Council
6 | Payment systems and cash management implications | 25 February 2020
SEPA vs FPS initial take-up
0.08%0.64%
1.02%
2.83%
4.39%
5.53%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Q12018
Q22018
Q32019
Q42018
Q12019
Q22019
Q32020
Q42019
SCT INST volumes as a % of total CT* volumes
0.00%
0.01%0.01%
0.01%0.02%
0.02%
0.00%0.00%0.00%0.01%0.01%0.01%0.01%0.01%0.02%0.02%0.02%
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
FPS volumes as a % of total CT** volumes
Source: European Payments Council. *total CT volumes are SCT+SCT Inst
Source: UK Finance; UK Payment Statistic 2018 report and Pay.UK Monthly Payment Statistic 1990 to Jan 2020** total CT volumes are BACS + FPS
7 | Payment systems and cash management implications | 25 February 2020
What is Request to Pay?
Payer = Authorising PartyPayee = Initiating Party
BeneficiaryPSP
PayerPSP
2. Request for payment
7. Payment sent
5. Approve response
1. 8. 4. 3. 6.
R2P system
Request payment
Funds received
Request authorisation
Approve to pay
8 | Payment systems and cash management implications | 25 February 2020
How might Request to Pay be used by your business?
Fully electronic invoicing – Efficient reconciliation of credits -reduced processing fees for Corporates
Invoicing
9 | Payment systems and cash management implications | 25 February 2020
How might Request to Pay be used by your business?
Online purchases are sent to nominated approver to settle – e.g. Parent for Child
Entitlements
10 | Payment systems and cash management implications | 25 February 2020
How might Request to Pay be used by your business?
Flexibility for customer on payment date – reduced processing fees for Corporates
Continuous card authorisations
11 | Payment systems and cash management implications | 25 February 2020
Plethora of Regulation
e.g. PSD2, FTR, CoP, Basel III, ISO20022 and Brexit
• How do these Regulations impact cash management?
• Brexit – Does it change anything?
– Euro wires
– SEPA
The changing regulatory landscape
12 | Payment systems and cash management implications | 25 February 2020
“No-deal” BrexitPost December 31st, if no deal is agreed then the UK will be deemed to have left the EU and the EEA. If that is the case then the possible charging options for a payment from the UK to Europe will be OUR/BEN/SHA (for PSD2 purposes, the UK will then be a ‘one-leg out’ country). SEPA may provide a cost-effective alternative.
Wire Transfers from the UK to the EU
OUR = remitter pays all charges BEN = beneficiary pays all charges SHA = remitter pays remitter bank charges & beneficiary pays their bank charges, ODC = Overseas delivery charge
EU hubPrincipal amount
Charge Amount
OUR €10,000
SHA €10,000
BEN €10,000
Sending feeCharge Amount Deduction
OUR £XX + ODC N/A
SHA £XX N/A
BEN A. Paid by bene
Intermediary feeCharge Amount Deduction
OUR Paid by UK bank
SHA B. Paid by bene
BEN B. Paid by bene
Fee
Charge Amount Deduction
OUR Paid by UK bank
SHA C. Paid by bene BEN C. Paid by bene
Beneficiary receives
Charge Amount
OUR €10,000
SHA €10,000 minus charges(B+C)BEN €10,000 minus charges(A+B+C)
SenderSending fee:
£XXFee:€XX+ Beneficiary
Post-hard Brexit (UK outside EEA)
13 | Payment systems and cash management implications | 25 February 2020
SEPA paymentsPost December 31st, if no deal is agreed then the UK will be deemed to have left the EU and the EEA. Note that for SEPA the only charging option will continue to be SHA – this is the only option permitted. If the UK is deemed to have left the EU & EEA then banks within the EEA may charge more to send and receive SEPA transactions with the UK
SEPA Direct DebitsSince the UK will be outside the EU/EEA, under Funds Transfer Regulation rules Creditors will be required to submit the debtor address details with every transaction regardless of the debtor location.
“No-deal” Brexit
OUR = remitter pays all payment charges BEN = beneficiary pays all transaction charges SHA = remitter pays remitter bank charges and beneficiary pays their bank charges
Post-hard Brexit (UK outside EEA)Principal amount:
€100Sending fee:
£XXBeneficiary receives:
€100Fee:€XX+
15 | Payment systems and cash management implications | 25 February 2020
Barclays offers corporate banking products and services to its clients through Barclays Bank PLC. This presentation has been prepared by Barclays Bank PLC ("Barclays"). This presentation is for discussion purposes only, and shall not constitute any offer to sell or the solicitation of any offer to buy any security, provide any underwriting commitment, or make any offer of financing on the part of Barclays, nor is it intended to give rise to any legal relationship between Barclays and you or any other person, nor is it a recommendation to buy any securities or enter into any transaction or financing. Customers must consult their own regulatory, legal, tax, accounting and other advisers prior to making a determination as to whether to purchase any product, enter into any transaction of financing or invest in any securities to which this presentation relates. Any pricing in this presentation is indicative. Although the statements of fact in this presentation have been obtained from and are based upon sources that Barclays believes to be reliable, Barclays does not guarantee their accuracy or completeness. All opinions and estimates included in this presentation constitute the Barclays’ judgment as of the date of this presentation and are subject to change without notice. Any modelling or back testing data contained in this presentation is not intended to be a statement as to future performance. Past performance is no guarantee of future returns. No representation is made by Barclays as to the reasonableness of the assumptions made within or the accuracy or completeness of any models contained herein.
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