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PAYMENTS STRATEGY FPAI WORKING GROUP FINDINGS AND RECOMMENDATIONS
Payments is one of the fastest growing and largest industries in the world. Ireland has a long track record of success in payments, both with indigenous firms that have scaled
globally and in attracting some of the world’s largest payment businesses to Ireland, employing ten of thousands of people.
Now is the time to build on this success by implementing key
strategic actions, with commitment and haste.
This report has been complied by the Payments Working Group (PWG) set up under the IFS2020 Strategy. The PWG
has been coordinated by the Fintech and Payments Association of Ireland (FPAI), Enterprise Ireland and the IDA.
This is an industry report containing findings and
recommendations which the PWG believe will significantly contribute to the achievement of the vision and objective of
the IFS2020 Strategy.
FOREWARD
BACKGROUND
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The Payments Working Group (PWG) was established in late 2015 under the IFS2020 Strategy and Action Plan for 2016. The PWG was assigned the action to produce a proposed Payments Strategy. The group met over several months with active participation from firms and industry bodies. The core findings of the group are: Ireland has an excellent record of success in payments
– with both local and foreign firms employing large numbers and competing globally;
To innovate further and attract more businesses into the sector we should clarify who has the mandate to promote competition and innovation in the sector;
As a multi stake-holder environment we must ensure that engagement is inclusive, regular and appropriate;
Nationally we must excel at the adoption and use of digital payments and embrace future and new developments with haste and enthusiasm.
The PWG also noted that the industry had been very effective in its organisation and that there was very strong alignment on the finding and recommendations. It also noted a great sense of ambition and anticipation within the industry.
SUMMARY
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VISION & ECOSYSTEM
“Position Ireland as country of choice for foreign and indigenous payments companies, building on a well developed & successful ecosystem, covering all aspects of payments, including ancillary services.” The Irish Payments ecosystem will be an
innovative and vibrant industry which will be attractive to investors and workers alike;
It will be the centre of development of world class and leading payment solutions;
Underlying payment systems and schemes will be accessible, reliable, secure and fast;
Access for new entrants will be encouraged, straight-forward and be supported by an engaged and receptive regulatory regime;
Technical standards will be open and easy for all to use;
The Fintech and Payments Association of Ireland (FPAI), will provide active support to new and existing participants facilitating a collegiate network of players in the world of payments.
VISION
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We are creating a vision of what needs to happen to drive a “leap forward” in the Irish payments industry thus adding value
to Government, Enterprise Ireland and IDA initiatives.
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Domestic & Int‘ SEPA, T2, BACS, FPS, etc.
Payments Ecosystem
PAYMENTS ECOSYSTEM
Cash
Systems &
Networks Payment Schemes
Card Schemes
Credit, Debit, Store etc.
Security & Auth
Data, Identity
CBI
DOF
EU
FPAI BPFI
Utilities & Govt
SMEs & Corp
Merchants
Personal
Traditional FI‘s
PSPs, MSPs
Card Issuers
FinTechs
Consumer Protection,
Risk
EPC, EBA, FCA, FSA
IFS2020, NPP
FX Bureaus, e-Wallets
SWIFT.
The Irish payments ecosystem has a long track record of innovation and has
enormous opportunity for further jobs, scaling and internationalisation. This is being driven by significant developments which are occurring at pace
and simultaneously, such as the changes in technology, regulation, Brexit and investor appetite for the sector.
THE IRISH PAYMENTS ECOSYSTEM
While there are numerous ways to segment and describe the payments industry, it is clear that it is a multi stake-holder
environment – made up of public sector bodies, infrastructure & service providers along with the users of the payment services. To
ensure that Ireland develops the best international payments industry all the stake-holders must collaborate and buy-in to the
vision of Ireland being a global leader in payments.
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Ireland has an excellent track record in payments. Many of the world’s leading payment businesses have significant operation’s in Ireland, and
along with the banks and a host of payment processors and service providers they employ tens of thousands of people across the country.
THE IRISH PAYMENTS ECOSYSTEM
Credit Institutions Processing Services
Card Network
Acquirers Supporting Technology
FX Brokers In-Store PoS Technology
Mobile & eCommerce Payments
eWallets
Closed Loop Payment Networks
Prepaid Cards & e-Money Institutions
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FINDINGS & RECOMMENDATIONS
Grow jobs in the industry Facilitate domestic start ups Attract foreign investment Scale-up existing businesses
Thus delivering new and innovative solutions to the local and
global markets.
The strategy was developed by a payments working group (PWG) set up under IFS2020. The PWG has undertaken: A comparison of our payments ecosystem to other
locations in terms of licencing, authorisation, technology, infrastructure, talent and incentives;
A process to find strengths and gaps by identifying the make up of the industry, carrying out a survey and noting issues to be addressed;
Work to define the payments ecosystem in Ireland, sharing knowledge across Irish and multi national firms from a licensing perspective and researching developments in other markets.
DEVELOPING THE STRATEGY
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The objective of the Payments Strategy is to help create an environment in which all stake-holders can
collaborate to:
A summary of the issues identified and related recommendations follow…
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1 - COMPETITION
Competition in any industry is a catalyst for innovation and development, which in turn delivers consumers a wider choice of services. In Ireland today, it is not clear as to who has the leadership to call for competition and innovation in payments. The working group found that some people incorrectly believe this to be the Central Bank of Ireland. The PWG recommends that Government clarifies who has the mandate to drive initiatives and policies designed to encourage competition and innovation in payments. Furthermore the PWG recommend that Government should in addition to promoting competition also: promote innovation in systems and infrastructure; ensure that payment systems are operated in the best
interest of users; provide support to existing and new providers and; ensure all players have equal access to information and
decision making.
Clarity of this leadership role is central to the achievement of the vision of Ireland as a global leader in payments.
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2 – ENGAGEMENT
As an industry that is characterised by a multi stake-holder environment, it is critical that engagement is effective, regular and appropriate. With regard to the Central Bank of Ireland, the PWG give welcome recognition to the recent changes made in the authorisation process. It is a process that must be regularly enhanced bringing more transparency and certainty to the process. Some interviewees, who are based in Ireland spoke about seeking licences elsewhere, which warrants follow up. In the area of pending payments legislation some firms are relying on information secured via other regions as the necessary information was not available via CBI or the Dept. of Finance. The FPAI, along with EI and the IDA must continue to bring all industry stakeholders and other partner organisations together, regularly. Recommendations: Both CBI and Dept. of Finance should each develop an “Industry
Engagement Framework” detailing how each body intends to engage with prospects, new legislation, industry associations, online web site enhancements, information updates and industry events;
CBI should follow up directly with any Irish based business (indigenous or FDI) who have secured licences overseas to determine the rationale;
CBI should establish a “FinStart” unit to work with prospect and newly regulated businesses with designated individuals assigned – ring fenced from the authorisation/supervisory function.
The FPAI must continue to act as the engagement catalyst – running two annual events, monthly meetups and quarterly partner fora.
Consumer engagement on payment solutions and new developments should be jointly established.
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3 – PAYTECH – IRELAND
To deliver a world class payments industry Ireland must develop as a nation that embraces new payment solutions with haste and enthusiasm. We must lead in electronic, digital, mobile and be a “paytech” nation. Across all sectors we should actively seek and encourage all forms of electronic payments – promoting choice, safety and trust. To achieve this we should: Link in with other pan-European developments on e-identity and
develop a national position paper on digital identity; Develop a suite of open APIs for automated AML supervision by CBI; Review learnings from “Cork Cashes Out” and develop a new Pay
Smart City project with an IoT dimension – an international showcase;
Develop a set of key e-payment measurements so as to establish a benchmark for setting goals – social welfare, fines, local council cheque acceptance etc.
Publish all payment statistics on a quarterly basis; Ensure relevant university programmes have modules relating to
payments and broader digital economy; Establish a commitment for all SEPA processors to implement SCT Inst
– the real time credit transfer service; Ensure a commitment for all Irish account providers to open APIs; Establish links with other international payment bodies and ensure
international collaboration at annual FPAI Fintech Nation and Fintech Congress events;
Develop an industry wide consumer engagement plan highlighting the benefits of e-payments.
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INDEX C1 The PWG recommends that Government clarifies who has the mandate to drive initiatives and
policies designed to encourage competition and innovation in payments.
C2 The PWG recommend that Government should in addition to promoting competition also, promote innovation in systems and infrastructure; ensure that payment systems are operated in the best interest of users; provide support to existing and new providers and; ensure all players have equal access to information and decision making.
E1 Both CBI and Dept. of Finance should each develop an “Industry Engagement Framework” detailing how each body intends to engage with prospects, new legislation, industry associations, online web site enhancements, information updates and industry events.
E2 CBI should follow up directly with any Irish based business (indigenous or FDI) who have secured licences overseas to determine the rationale.
E3 CBI should establish a “FinStart” unit to work with prospect and newly regulated businesses with designated individuals assigned – ring fenced from the authorisation/supervisory function.
E4 The FPAI must continue to act as the engagement catalyst – running two annual events, monthly meetups and quarterly partner fora.
E5 Consumer engagement on payment solutions and new developments should be jointly established.
P1 Link in with other pan-European developments on e-identity and develop a national position paper on digital identity.
P2 Develop a suite of open APIs for automated AML supervision by CBI.
P3 Review learnings from “Cork Cashes Out” and develop a new Pay Smart City project with an IoT dimension – an international showcase.
P4 Develop a set of key e-payment measurements so as to establish a benchmark for setting goals – social welfare, fines, local council cheque acceptance etc.
P5 Publish all payment statistics on a quarterly basis.
P6 Ensure relevant university programmes have modules relating to payments and broader digital economy.
P7 Establish a commitment for all SEPA processors to implement SCT Inst – the real time credit transfer service.
P8 Ensure a commitment for all Irish account providers to open APIs.
P9 Establish links with other international payment bodies and ensure international collaboration at annual FPAI Fintech Nation and Fintech Congress events.
P10 Develop an industry wide consumer engagement plan highlighting the benefits of e-payments.
WORKING GROUP
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For further information, feedback or discussion on any aspect of this report, please contact the FPAI CEO, Richard Walsh.
[email protected] or [email protected]
© FPAI - June 2016
CONTACT DETAILS
Chairpersons: Ruth McCarthy, FEXCO & Maurice Crowley, Banking & Payments Federation of Ireland.
Andrew McFarlane, Accenture Billy Hanley, Enterprise Ireland Brendan McCormack, Enterprise Ireland Brian Hanrahan, Sentenial Ciaran Cassidy, Realex Payments JB McCarthy, University College Cork John Phelan, Department of Finance Karen Purcell, Microsoft Adam Kissane, Deloitte
Katie Thurston, IDA Michael Concannon, AIB Michael Sheehy, Microsoft Michele Olin, AIB Richard Hanlon, Trust Vesta Sandra Higgins, Sysnet Global Solutions Colin Duignan, Elavon Eric Horgan, Elavon