Payment systems and cash management implications - Nicola Coyne Head of Immediate Payments, Barclays Corporate Banking - Association of Corporate ...
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Payment systems and cash management implications Nicola Coyne Head of Immediate Payments, Barclays Corporate Banking
Agenda • Cash & digital payments in the new economy • Real-time payments • Request to Pay • The changing regulatory landscape 2 | Payment systems and cash management implications | 25 February 2020
UK Payment industry statistics
Bacs, CHAPS and Faster Payments total market volumes
250,000 5,000
4,500
Volume (000's) - Bacs Credits/FPS
200,000 4,000
Volume (000's) - CHAPS
3,500
150,000 3,000
2,500
100,000 2,000
1,500
50,000 1,000
500
- -
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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
3 | Payment systems and cash management implications | 25 February 2020UK Payment industry statistics
Bacs, CHAPS and Faster Payments total market values
£400,000 £9,000,000
£350,000 £8,000,000
Value in £m - Bacs Credits/FPS
£7,000,000
£300,000
Value in £m - CHAPS
£6,000,000
£250,000
£5,000,000
£200,000
£4,000,000
£150,000
£3,000,000
£100,000
£2,000,000
£50,000 £1,000,000
£- £-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bacs Credits FPS CHAPS Linear (Bacs Credits) Linear (FPS) Linear (CHAPS)
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 2020Real-time payments in Europe
2,079 Payment Service Providers
from 22 countries SEK
have joined the SEPA Instant Scheme
= 51% of European PSPs DKK
GBP
PLN
Key:
= SCTInst
participating
country
BGN
Source of data: European Payments Council
5 | Payment systems and cash management implications | 25 February 2020SEPA vs FPS initial take-up
SCT INST volumes as a % of total CT* volumes FPS volumes as a % of total CT** volumes
6.00% 5.53% 0.02% 0.02%
0.02% 0.02%
5.00%
4.39% 0.02% 0.01%
0.01%
0.01% 0.01%
4.00%
0.01%
2.83%
3.00% 0.01%
0.01%
2.00% 0.00%
0.01%
1.02%
0.64% 0.00%
1.00%
0.08% 0.00%
0.00% 0.00%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2018 2018 2019 2018 2019 2019 2020 2019 2008 2008 2009 2009 2009 2009 2010 2010
Source: European Payments Council. Source: UK Finance; UK Payment Statistic 2018 report and Pay.UK Monthly
*total CT volumes are SCT+SCT Inst Payment Statistic 1990 to Jan 2020
** total CT volumes are BACS + FPS
6 | Payment systems and cash management implications | 25 February 2020What is Request to Pay?
Payee = Initiating Party Payer = Authorising Party
Request Funds Request Approve
payment 1. 6. 8. received authorisation 3. 4. to pay
2. Request for payment
R2P system
5. Approve response
Beneficiary Payer
PSP 7. Payment sent PSP
7 | Payment systems and cash management implications | 25 February 2020How might Request to Pay be used by your business?
Invoicing
Fully electronic invoicing – Efficient reconciliation of credits -
reduced processing fees for Corporates
8 | Payment systems and cash management implications | 25 February 2020How might Request to Pay be used by your business?
Entitlements
Online purchases are sent to nominated approver to settle
– e.g. Parent for Child
9 | Payment systems and cash management implications | 25 February 2020How might Request to Pay be used by your business?
Continuous card authorisations
Flexibility for customer on payment date
– reduced processing fees for Corporates
10 | Payment systems and cash management implications | 25 February 2020The changing regulatory landscape
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
11 | Payment systems and cash management implications | 25 February 2020“No-deal” Brexit
Post 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
Post-hard Brexit (UK outside EEA)
Sending fee: Fee:
Sender £XX €XX+ Beneficiary
EU hub
Principal amount Sending fee Intermediary fee Fee Beneficiary receives
Charge Amount Charge Amount Deduction Charge Amount Deduction Charge Amount Deduction Charge Amount
OUR €10,000 OUR £XX + ODC N/A OUR Paid by UK bank
OUR Paid by UK bank OUR €10,000
SHA €10,000 SHA £XX N/A SHA B. Paid by bene SHA C. Paid by bene SHA €10,000 minus charges(B+C)
BEN €10,000 BEN A. Paid by bene BEN B. Paid by bene BEN C. Paid by bene BEN €10,000 minus charges(A+B+C)
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
12 | Payment systems and cash management implications | 25 February 2020“No-deal” Brexit
SEPA payments
Post 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
Post-hard Brexit (UK outside EEA)
Principal amount: Sending fee: Fee: Beneficiary receives:
€100 £XX €XX+ €100
SEPA Direct Debits
Since 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.
OUR = remitter pays all payment charges BEN = beneficiary pays all transaction charges
SHA = remitter pays remitter bank charges and beneficiary pays their bank charges
13 | Payment systems and cash management implications | 25 February 2020Questions? 14 | Payment systems and cash management implications | 25 February 2020
Disclaimer
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
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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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