Contribution
My Lords, I will make a few comments on amendments in this group and speak particularly to my Amendments 54 and 57. I say very gently that I agree with the other amendments in this group. My noble friend Lady Bowles is looking for consistency in the consultation period. Unless someone has been on the other side of a consultation period—not setting it but trying to respond to it—they may not know that the real-life difficulties of the inconsistency, frankly, are often a barrier, not just an annoyance. Amendment 47A is in the name of the noble Lord, Lord Holmes, and yes, it makes sense to have a payment systems panel on an issue such as this: we need to make sure that a full range of views and experience is taking a look at such a crucial piece of the financial plumbing.
On Amendment 55, I could not understand why ease of use should have been removed from the competition objective. That made no sense if we are thinking about people and consumers. I do not know whether the Government could explain that. I very much support the noble Lord, Lord Vaux. It had struck me but I did not do anything about it and I should have. His Amendment 49 deals with this capacity to exclude digital payment assets from definitions in payment systems, which just seems fundamentally wrong. We are moving in the direction of digital, these are coherent parts of the payment system and it is going to be relevant to the two amendments that I am about to discuss.
My Amendment 54 recognises that we are in a fast-changing world. We are increasingly in a time in which the payment system is made up of many more entities than just the conventional players. New schemes, platforms, exchanges and all kinds of services are coming on stream; these are key and many are digital. Amendment 54 emphasises that the FCA must, in its service-user objective, focus on “consumers”, a much clearer term than “users”. We have seen in the past that consumers get lost in this overall definition of users. It would require the FCA to look at the issues of inclusion, redress, access to cash, choice and interoperability from the perspective of the consumer in this increasingly complex world. As we move forward, many consumers will simply be bemused.
A simple example arose for me when, very recently, I spoke to an American firm planning to offer payroll services in the UK using 100% stablecoin. The firm is very confident that this will be in place shortly after the regulations are approved by the FCA. How does an employee receiving 100% of their salary in stablecoin turn that into cash at an ATM? Obviously, there are huge issues of access to cash, interoperability and who will pay for the necessary software and hardware changes.
Amendment 57 carries on with this theme and picks up an earlier group, addressing the need for all participants in the payment system, including tech companies, to pay their fair share. That is why the definition of “payment system” really matters and should not exclude digital assets. As the payments world changes so significantly, financial inclusion will be a far more complex issue, and it is untenable for the costs of this to fall just on the banks. My amendment makes it clear that every participant across all recognised payment systems must step up: we need a level playing field.
The intent of these really quite simple amendments is to help overcome the incredibly fragmented and confusing payments landscape in the UK, particularly when we look at it from the perspective of the consumer. It is an obstacle course and, frankly, general confusion and fragmentation let overseas entities take advantage of us. I am very troubled that the National Payments Vision of the Bank of England does not have digital assets in scope. The Bank issued its policy announcement on systemic stablecoin on Monday, and it says that its work will be in parallel with the National Payments Vision, but I am still trying to work out why the two are not properly linked together and coherent. There are new players in this field, and some are asserting that we need a single sovereign payments system to respond to core consumer needs and to join up the dots with consumers at its heart. I met the Canadian company Interac, and that is exactly what happens in Canada, so there are international examples, which do not seem to be under consideration in any of the material that I have been looking at.