payments strategy · payments is one of the fastest growing and largest industries in the world....

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

WWW.FPAI.IE 2 June 2016

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



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


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.


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


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


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…


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.


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.


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.


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


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

payments strategy · payments is one of the fastest growing and largest industries in the world....

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