Response to the Australian Payments Council Consultation – Payments in a Global, Digital World

Payments People February 2019

Thank you for reaching out to the payments community to be part of the consultation process

reviewing the 2016 Australian Payments Plan. Payments People is a group of highly experienced

banking, operations and technology executives who are passionate about payments and the

enablement of commerce and financial services more broadly. We draw on a wealth of practical

experience and knowledge of the Australian payments environment and innovation in domestic and

international payment processing and operations globally and as independents, we are able to

submit an unbiased response. Nigel Adams and Jo Spencer authored this response. More details of

who we are and what we’ve done are provided in the Appendix A.

We have responded to the specific questions as requested but would summarise our overall

position as follows:

To develop a cohesive payments plan, it is important to first recognise the underlying role that

payments play and that is that they are a “means to an end”. Payments are part of the critical

infrastructure that enables our broader economic growth ambitions and aspirations. It is clear our

economy will transform over the next 10-20 years. Digitisation and Industry 4.0 will play a significant

role, as well as other macro forces such as demographic change, water, energy and climate change.

An understanding of how these trends are expected to play out and the policy response that will

shape our overall economic direction is a fundamental input into any Payments Plan. Without this

context, as a “means to an end”, we do not believe the Australia Payments Plan will be fit for

purpose as our economy evolves in the future.

At the same time, customers expect real-time certainty, always-on performance and ubiquitous

reach – when Facebook goes down it’s a very rare event, users don’t have to wait for hours for it

come back up and the loss of a social media platform does not carry the same implications of being

stuck on the petrol forecourt or at the checkout with a basket of groceries, crying child and unable to

pay. Customers expect transparency of outcome, performance and cost. Customers expect to be

able to control their data and the organisations they are dealing with to protect them from the

threat of cybercrime and privacy breaches. They also don’t really care about the inner working of

the payments “black-box”, the jargon and idiosyncrasies of the various schemes are both an irritant

and confusing. It is just a payment, they want it to be simple, safe and timely and accurate. They

don’t want to have to think differently and interpret a jargon-ridden array of technical terms and

conditions when they choose to make a payment via a different clearing stream. Their expectations

are being shaped by their digital experiences with Amazon, Google, Uber, Airbnb and others. This is

a far cry from their experience with the majority of pure payment experiences today. Having said

that, not all payments have to be made in real-time, the broader business context is relevant and the

payments process must be fit for purpose in this regard.

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Today’s Australian Payments Infrastructure has evolved over many decades and in some cases such

as with cheques and cash, over many centuries. Over the last 20-30 years we have witnessed a

period of extraordinary change with new clearing streams, new participants, new technologies,

rapidly evolving customer expectations and a slew of new risks. All of this has evolved piecemeal,

with no overarching coordinated plan bought into by active participants. The consequence is that

there is an extraordinarily complex web of services, applications, infrastructure and protocols that

enable transactions to flow. For the most part it is reasonably effective, there has been innovation

and a response to changing needs with NPP and ApplePay, but at what cost and how sustainable is it

moving forward? Without creating a simple and cost-efficient platform that enables new entrants to

provide customer innovation, the current environment allows the current providers to control and

stifle competition. The cost of maintaining this tangled infrastructure, the cost of exception and day-

2 handling, the cost of fraud and transaction monitoring and more noticeably the cost of outages

and incidents are all direct costs growing rapidly The indirect cost that includes a customer

experience that is more and more fragmented and more and more confusing, is hard to calculate,

but reasonable to assume that it is large.

Given the opportunity to design an Australian payments ecosystem from scratch, it is highly unlikely

the design would look like today’s reality. To evolve our way out of this complexity needs a clear,

coordinated plan. A plan that:

• Simplifies the customer value proposition with the customer in control;

• Recognises the role of cash in the future - how it is expected to be used and by whom and in

what format;

• Commits to a clear exit date for cheques and a transition path to alternatives to meet that

deadline;

• Redefines payments products and services in a standard way – removing brand confusion

and simplifying their use for customers;

• Embraces a broader range of value types e.g. mobile phone minutes, frequent flyer/reward

scheme points, eCash or cryptocurrencies;

• Eradicates exception handling and day 2 processing;

• Fundamentally re-imagines the underlying infrastructure and architecture that will:

o Enforce a standards driven approach;

o Consolidate, standardise and simplify across schemes and clearing streams;

o Promote “create once and re-use” interchangeable, micro-services;

o Ensure an “always on” service; and

o Create rails that are value store/account agnostic and interoperable.

• Provides transparency of cost and performance;

• Only distributes sensitive data that is really necessary. Protects customers data and privacy

and engenders trust;

• Provides flexibility to the future demand without complicating itself

Whilst the plan is simple, the thinking and collaboration required to populate the plan require

extensive engagement:

• Craft an overall strategy with tighter linkages to the broader economic context;

• Address the housekeeping issues that must be dealt with, if we are to evolve our current

infrastructure out of the fragmented, complex, confusing, tangled web that it is today;

• Identify the ongoing initiatives and dependencies that impact the payments domain and the

friction points e.g. Open Banking, Digital Identity etc.;

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• Develop a roadmap that will ensure a co-ordinated approach by participants to develop

payments of the future;

• Build and maintain commitment from the government, participants and commercial entities

to make the roadmap achievable and holding them to account.

As highlighted above, the evolution of payments services and capabilities must exist and evolve in

coordination with the broader commercial ecosystem. With that in mind, we have provided a

proposed high level definition of a target state commercial framework for Australia and shown how

the payments capabilities should be considered. This is provided in Appendix B.

Payments People would welcome the opportunity to discuss this in more detail and the role we

can play in helping to shape payments of the future.

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Answers to the Specific Australian Payments Council Questions

1. What are your views on the trends outlined on pages 4 to 8? Are there other factors or issues

to consider?

It is very hard to discern from the data, the trends driven purely by the growth of the economy

and what is driven by a change in behaviour. For example, are people and organisations making

more payments in aggregate now or is just that we have a larger population and more

businesses. It is also harder to understand the difference between volume and value. Yes,

cheque usage has declined significantly in volume terms, but the majority of residential

mortgage settlements are still transacted via cheque hence the average value is far higher rising

from ~$3,200 to over $11,000 today. Whereas with debit cards the number of transactions has

grown but the average value per transaction has fallen as mobile wallet driven, contactless

payments see customers switch from using cash for low value transactions. Credit cards have

seen a steady rise in volume over the last 20 or so, but the average value per transaction, whilst

higher than debit cards, has barely moved.

Despite the transition to electronic payments, in some cases the underlying benefits of old

mechanisms (late and non-presentment of cheques, anonymity of cash) are still relevant and

there’s no equivalent.

Hence, the trends don’t really provide a clear picture on what is happening neither in terms of

what is behind the growth/decline (is it population, number of business registrations, more

economic activity?), nor what is driving the mix of payment types and their usage (why is the

average transaction value for debit cards falling? Is it contactless making it easier to buy a

coffee with your phone than take cash out of a wallet or purse?

Clearly the growth in eCommerce and mobile usage is having a significant effect, but exactly

what the effect is, is difficult to pinpoint in the data represented.

Additional growth/trend areas to consider should include:

• Volume and value of fraud by payment type;

• The growth in impacted cards per card issued;

• The growth in merchant disputes and complaints;

• The number of FinTech start-ups with a stated aim of providing payments services.

2. What are some other interesting international trends?

There are several areas to consider:

• Progress made by countries are trying to exit physical instruments (cash and cheques)

and the relevant degrees of success. Why are the Scandinavian countries able to

virtually exit cheques whilst the UK had to reverse its program? How are fees used to

drive down volume?

• The growth of payments within closed loop networks like Alipay where the payment is

almost invisible if you are within the network – many of the providers that would have

participated in these transactions are now locked out. Whilst this simplifies the

proposition and architecture, increases control and delivers a consistent experience – it

requires a near monopoly to be good for the customer. A case in point is trying to

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transaction as a retail customer in China without a WePay account. Control and

visibility are also a concern for the government;

• The growth of stored value accounts and the mix of these accounts e.g. mobile phone,

transportation, retail. These have arisen due to a lack of certainty around processing.

Enhancing the servicing would help mitigate the need for stored value accounts and

reduce the clutter. The process needs to be simple, real-time, always available and

guaranteed. Notably both Transport for London and Opal in Sydney now support

contactless and mobile payments and the total cost of travel is calculated post the

customer experience – the change in approach is due to the understanding of the

customer risk and the combined costs of managing specific Oyster/Opal cards

infrastructure;

• Aligned to stored value would be the growth of FinTechs striving to deliver

interoperability between the multiplicity of account types interoperable e.g. the ability

to transfer funds from a MYKI balance to a mobile phone account. There are no

interoperable definitions of how customers think of value e.g. mobile phone minutes v

frequent flyer points and no mechanism to simply exchange across schemes. How

these value systems participate in the broader Australian Payments Plan needs to be

considered;

• Trends in charging models e.g. facilities fees, commissions, flat subscription , enhanced

transparency;

• Interestingly there is no mention of international money transfers. With a rapidly

growing migrant workforce, the ability to transfer money, safely, quickly and at low cost

is a critical payments market. There is significant innovation here with traditional and

new schemes aligning - card-to-card, closed loops, distributed, cryptcurrency based.

However, there is still friction due to the funding models and KYC / authentication.

3. Is digitisation changing the way we view payments?

The spectrum of digital services currently on offer is very broad – the worst of them add to the

confusion, complexity and terrible customer experience. However, the leading lights amongst

the tech giants are re-shaping customers’ expectations to something far simpler. From a

payments perspective the experience is equally varied with some services hiding the payment

making it very simple, others make it far too complex and require too much information to

complete the transaction. Customers click to order an Uber and don’t have to worry about

payment. Customers book an Airbnb and don’t have to worry about payment once they have

been set up. The payment is practically invisible, unless the customer wants the visibility. The

payments are behind the scenes but very much traceable. They are out of mind, but within

complete control of the customer.

Today we make payments far too complex and inconsistent with too many brands, too many

choices, written from the scheme perspective not the user/customers perspective. There

should be a standardised payments service, extracting the process from the merchant. All the

merchant needs to know is that they are going to be paid.

The repeated privacy breaches and growth in online fraud are also making customers far more

security savvy. There is a risk that, without greater co-ordination and standards setting, the

introduction of open banking and growth in payment apps will accelerate these negative

outcomes for customers.

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The availability of tech giant services e.g. google, amazon and some payments infrastructure

e.g. SWIFT etc that “never” go down and if they do it’s for a matter of seconds are setting

customer expectations around resiliency that is not currently met by the payments

infrastructure in Australia today. The Australian payments system has evolved over many

decades and is a patchwork quilt of applications, sub-systems, protocols, participants each

subject to fail and not designed collectively to provide overall resilience or interoperable

redundancy.

4. Within the four user-groups (individuals, business, community groups and government), what

sub-groupings have special needs or requirements that we should consider?

There are clearly customer sub-groups that include the unbanked, customers without

mobile/smart phones, those with no limited access to physical banking infrastructure, but these

groups are very much in the minority and their needs should be considered as a completely

separate stream of work otherwise the lowest common denominator effect will hold the

evolution of the ecosystem back.

Small business is another interesting sub-group with specific payment needs but given the

increase in dependency on small business to drive our overall economic prosperity, this sub-

group should be given greater consideration.

The key point here is that designing a payments environment that will meet the needs of 100%

of customers will be extraordinarily expensive. The outliers need to be served through

alternative mechanisms.

5. Do Resilience, Efficiency, Accessibility and Adaptability remain appropriate characteristics for

our vision of an effective payments system?

These are hygiene factors, which unfortunately the industry is not delivering on. The number of

outages is unacceptable, and the duration of outages is unacceptable. Customers expect

payments to be “always on”, like their electricity supply and when it goes out they do not

expect to have to wait four hours plus to recover – the standards for outages and recovery

times set by the tech giants have reframed customer expectations.

In addition, the current infrastructure is far from efficient. The degree of exception handling is

unacceptable, the number of participants “clipping the ticket” drives up costs, the overlap

between schemes is confusing and adds to the complexity, the lack of transparency in terms of

performance and costs make it particularly customer unfriendly. If you started again, you

would not design the system to replicate what we have today. We need to a strategy and a

roadmap to evolve to a payment systems environment that is rigorous, robust and fit for the

21st century with a far greater focus on standards and interoperability, in part driven by

ISO200022 and Open Banking.

We also need to see a greater focus on delivering a consistent, quality customer experience and

ensuring payments are not initiated if it is not known whether they will complete successfully –

guaranteed, non-repudiable, guaranteed and visible e.g. greater focus on validation, identity

management, credentials validation and consent models. Mistaken, rejected and dishonoured

payments should be a thing of the past.

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6. Should digitisation change our vision for an effective payments system? If so, how?

Yes – we need to stop thinking about payments as an end, rather that the payment is a means

to an end of some other process. The payment itself should be simple and invisible but provide

the customer the control and flexibility to manage it.

The real time nature of digital business should not only drive simplicity and reliability for

customers, it must drive quality. We must think differently about how we separate origination

from processing. No transaction should be accepted for processing without knowing for certain

that it will reach the right beneficiary at the right time in the right currency for the right value.

We must make a concerted effort to eradicate exception handling and day two work. For the

very, very small number of cases where it is impossible to design out failure points, mitigation

and response scenarios are developed, tested and executed at an industry level.

This would also lead to a clear plan to exit cheques and dramatically reduce the usage of

physical cash over the next ten years.

7. Do the identified topics represent appropriate focus areas for the APC, given our vision of an

effective payment system?

The payments infrastructure we have today is complex, inconsistent, expensive, unreliable and

confusing for customers. It has evolved organically, independently, opportunistically and in an

uncoordinated way. It is now time to take a far more strategic view and develop a roadmap

that is more clearly and precisely aligned to the changing nature of the economy it purports to

support. We need to be far clearer about the type of products, how they are defined and

where they fit. We need to be clear about where competition is a good thing and where it

confuses. We need to distinguish between the front-end origination and the pipes carrying the

traffic, we need to ensure we don not muddy the waters between data and payment.

Greater focus should be given to debit payments - such as request-to-pay and direct debit –

providing greater certainty, alignment with the service, functionality, visibility, transparency and

control.

Consideration should also be given to supporting capabilities e.g. digital identity, data

management, delivery v payment models etc.

8. Are there other potential focus areas that we have not identified?

Consents and contracts provide greater controlled visibility, transparency and access to all

interested parties without needing to complicate the payment process. What is required is an

interoperable network that allows these to evolve independently and provide a consolidated

view where necessary. This can be achieved using the Ope Data initiative, combined with the

evolution of customer centric consent frameworks specific to business contexts.

Developing the roadmap to migrate from the current towards the desired state, simplifying as

we go.

Opportunity and implementation plan for the introduction of and transition to eCash.

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International transfers and particularly workers remittances are missing. However, the most

important aspect is the “umbrella” that should set the blueprint for the house. It’s hard to

design the foundations, if you don’t know what the house will look like.

9. How do you think we should prioritise our work within these focus areas?

Work closely with Treasury and Industry 4.0 to have a far clearer understanding of how the

economy will evolve over the next 10-20 years. Then evaluate the different user needs - B2B,

C2B/B2C and P2P. Develop a strategy, roadmap and prioritisation with the broader industry

and ensure key participants and stakeholders commitment.

10. Can you provide any information on emerging technologies that may impact our work?

See below.

11. Can you provide any information on any other ongoing strategic work within these focus

areas? Including industry, government, academia, NGOs, etc.?

A whole raft:

• Digital Identity – different frameworks, models and solution contexts are evolving;

• Account based ecommerce and bill payment options (e.g. IATA Pay, iDeal etc.);

• Cloud-based, payments services platforms, API intermediaries;

• SWIFT GPI and linkage to blockchain (Corda-R3) contracts management;

• Beneficiary validation (Confirmation of Payee UK, SWIFT APIs);

• 24x7 / real-time evolution:

o Pre-authorisation prior to payment initiation;

o “Uncleared funds” concept to be re-understood;

• Open Banking / PSD2 payment initiation (NZ, UK, Euro addressing this differently);

• Tokenisation and data obfuscation – only where absolutely necessary;

• Account Portability – UK etc.;

• Non-fiat currency use – CBDCs , stable coin, inter-changeable value (stored points / telco

minutes), domestic (local and national) and international crypto-currencies;

• Delivery v Payment models (e.g. PEXA):

o Typically high value purchases;

o Registration changes to underlying asset ownership;

o Applicable to multiple assets – stocks and shares, house purchase.

• Barter and cashless exchange mechanisms e.g. Bartercard;

• Cashflow management:

o Account consolidation;

o Virtual accounts;

o Reserved funds and earmarks;

o Timed payments;

o Payments v Payment scenarios.

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Appendix A – Payments People

Payments People provides coordination of experts in the field of payments-related initiatives,

predominantly in Australia. The response to the Australian Payments Council consultation has

been prepared by Nigel Adams and Jo Spencer.

Nigel Adams – Nigel led group payment operations at both ANZ and NAB. He has successfully

led all payment related operational activities including onboarding, processing, financial crime

monitoring, servicing and reconciliations, in over 32 countries and across all clearing streams.

He is renowned for his focus on operational excellence, quality, control and innovative

approach to monitoring and risk.

Jo Spencer – Jo led the ANZ Group strategy and architecture technology practice, specialising in

payments, for the last 10 years, with particular responsibility for NPP, other real-time

mechanisms across Asia, international card and electronic payments and ANZ solutions for

wallets, schemes and customers. Jo provided ANZ’s support of activities with NPPA, APN, BPAY,

ABA, APRA and other regulators. Before settling in Australia, Jo defined and built payments and

market infrastructure solutions for countries across the world.

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Appendix B – Developing a Commercial Framework for Australia

Payments capability in Australia has to be considered as a critical component of the broader

commerce environment, and must provide and pre-empt products and services that support

commercial activity in Australia and link to global commercial models. The strategic analysis of

the current state and the development of the target commercial environment must be carried

out by focusing on the customer and organisational participant impacts and demands, not just

the current and evolving payments capabilities in isolation.

Only by coordinating compliance and strategic initiatives towards a defined and agreed target

state can payment-related initiatives and related activities provide timely, efficient, simplified

and regulated outcomes, combined with the evolution of solutions providing consumer delight

and business benefits. For example, successful implementation of inter-dependent initiatives

such as open-banking, real-time payments (NPP and overlay services) and customer digital

identity and consent management, can develop a consistent payments product (real-time

debits) and a customer experience on top of which commercial solutions can evolve (invoice

delivery, guaranteed ecommerce payments).

The payments environment must provide products, services and capabilities that evolve

efficiently, do not look to compete and don’t embed complexity into the environment itself or

its use. The development of a commonly agreed framework allows all involved organisations

and personnel to understand their roles, offerings, services and inter-dependencies and can be

governed in order to lead future evolution and simplification.

By defining a target conceptual commercial framework, we identify the components, their

responsibilities and dependencies between each of these, in order to enable coordinated

evolution of a commercial environment for the nation.

Payments processing requires multiple electronic and physical (e.g. cash) capabilities to support

the myriad of commercial activities (P2P, P2G, B2B etc.) and even more types of interaction

models.

The payments environment must provide consistent customer experience across commercial

providers, but also allow for commercial differentiation of products. By using a common

commercial framework and an agreed taxonomy, the extension of new services and products

and the migration from heritage services and products can be planned and executed at the right

time and participants can align programmes to make holistic decisions regarding their solutions.

The Australian Payments Council is quite rightly focused predominantly on the provision of

payments capability and the products and services that support the rest of the commercial

framework. The primary focus is on the delivery of payments through domestic clearing and

settlement mechanisms and the definition and use of associated schemes.

The intention must be to provide products and services that are appropriate to the commercial

interaction that enable simple, efficient, cost-appropriate and timely completion of the

commercial interaction.

The critical implication is therefore that the definition of the payments framework as part of the

commercial framework, needs to occur in conjunction with the whole commercial framework

and the interdependent evolution of supporting capabilities provided by participants and

service partners.

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The following figure provides a high- level conceptual view of the Commercial Framework, in

which payments is a critical capability.

Figure 1: A Conceptual View of the Australian Commercial Framework

The Commercial Framework is defined in 2 major components – a Manufacturing Framework

and a Distribution Framework.

The Manufacturing Framework provides common supporting capabilities that are consistent

across the industry. Whilst these may be commercial in nature, they provide collaborative

(wholesale) product and services definitions such that these are easy to use and distribute

through the Distribution Framework through consistent delivery mechanisms (APIs etc.).

The Distribution Framework allows the definition of specific products or services that

differentiate commercial services through their preferred distribution mechanisms. These

products are visible and marketed to the industry either as common products (e.g. PayAnyone,

BPAY payments) or specific products and services to the distribution channel. Distribution

models can be specific to the provided product or service, or combined with others through

common services and multiple channels

Supporting capabilities include core facilities to define the trusted parties involved (identity),

the integrity of the environment (security) and the definition of data concepts and attributes

across the transactions and interactions supported.

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The Commercial Framework is governed by the appropriate industry bodies to ensure

continued simplicity and alignment to the strategy and the initiatives across the industry.

Common schemes and solutions can evolve independently, but must be aligned to maximise

usage, interoperability, simplicity and innovation. The use of consistent data, product and

interface (API) definitions allow the development of consistent and extensible solutions

applicable to multiple solutions and business contexts

Components of the Manufacturing Framework interact such as to provide consistent products

and services through different distribution mechanisms. For example, Asset Management may

include land registries, car registration, bank accounts, securities and shares registries etc.

Transacting in these assets requires coordination with the Payments environment to ensure an

effective and risk-mitigated process of delivery-versus-payment. Therefore, the validation of

asset ownership and the payment process must be coordinated to ensure that the transfer of

the asset and the value between involved parties and the resulting payments. By aligning

simple processes in the Manufacturing Framework, the resulting commercial products and

services can be easily distributed as necessary through the most appropriate distribution

mechanism.

The following figure provides a level 3 view of the Payments Framework.

Figure 2: A Conceptual View of the Payments Framework

Looking at the Payments Framework in more detail, the following capabilities can be identified.

- Interfaces and APIs – Services and products are distributed using data aligned APIs and

interfaces, supporting existing and evolving services that provide consumption of new or

heritage products;

- Product and Services Definitions - Standardised and industry-wide payments-related

products and services are provided with SLAs, differentiation, reach and customer

interaction patterns. These attract standard fees to the processing agent, but are

commercialised through the distribution framework;

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- Validation Services - Cross product and product and service specific validation services

ensure maximum uptake, payment success and exemplary customer experience. Validation

is done as early in the transaction process as possible to provide good customer experience

and reduced friction and cost due to inefficient processing and failures;

- Clearing and Settlement Schemes - Domestic clearing and settlement schemes provide core

payments mechanisms and define the interaction patterns and rules for the participants.

These should be clearly differentiated but must become more interoperable and support

different payment types as the need evolves;

- Value Added Services - Various providers may support payment-related services that are

appropriate to the processing of different payment types. These services may include

transaction data management, tokenisation services etc. These provide their own services

or services embedded inside other payment mechanisms / schemes;

- Reference Data Management - The coordination of payment processing requires the

consistent definition and usage of reference data that is payment and non-payments

specific (e.g. BSB/IIN). The domestic environment needs data definitions to be clear, used

appropriately and aligned with international equivalent usage and reference data;

- Connectivity to International Schemes - The Australian context must align with the broader

global payments capability to ensure customer interconnectivity and global commerce.

To illustrate how the payments capabilities interact with other manufacturing capabilities and these

are in turn distributed, we can take the example of providing a “confirmation of payee” validations

service.

- Payees are customers that should be registered in the Identity and Trust Framework. These

should therefore be able to be identified as authenticated parties;

- Their assets or credentials (accounts) should be defined and held with the appropriate asset

manager (in this case an Account Holding Institution – a bank) and may also be defined as

verified credentials against the identified party in the Identity and Trust Framework from

which the credentials can be verified directly;

- Assuming that the digital identity credentials are not however accessible via the Identity

and Trust Framework, a validation service is required to ensure customer experience

optimisation at a specific channel. The payee, their target account and the ability of that

account to receive funds via a specific payment mechanism (or identifying the preferred

mechanism) can be defined as a service in the Manufacturing Framework and can be

externalised either by the appropriate asset manager (through a service agent) or as a

specific service within the Payments Framework. The reason for providing a specific service

inside the Payments Framework might be for efficiency and consistency purposes such that

the service is guaranteed to be consistent with its use in the payments process. The NPP

Addressing Service is one such secondary service that allows the identification of

beneficiary accounts;

- Using the figure below, the “confirmation of payee” service may therefore be specifically

provided through the Identity and Trust Framework (A), the Manufacturing Framework

serviced by the asset manager themselves (B) or internally to the Manufacturing

Framework by the Payment Framework (C);

- The coordination of each of these capabilities and their distribution models is done so that

the management of these parties and their accounts is automatically and consistently

managed across all the servicing capabilities and their consistent information delivery

through each of the delivery mechanisms.

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Figure 3. Various models of providing the “confirmation of payee” service

The most important points to remember are that:

- Services may be externalised through various mechanisms to support performance and

throughput, different commercial models or as services evolve or migrate. Coordination is

required across these to ensure consistent service delivery and data definition

(simplification);

- Maintenance of information and transaction services need to be able to evolve without

unnecessarily impacting the customer products and services;

- Version management of a specific capability, product or service is required to ensure

consistency of customer experience across distribution channels;

- Not all payment services and products will provide real-time processing and customer

experience. Transaction status management and notifications allow all concerned to know

the status of a transaction at any point;

- Commercial drivers will determine which services and products are used and all suppliers

would expect to be rewarded appropriately for providing services;

- Commercial differentiation is created through coordination of customer products and

information, not necessarily through the payment process.