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Netherlands - Dutch Tackling Payments Accessibility
The Dutch Payments Association (DPA) has published an accessibility survey looking at consumer cash usage and the impact that increasing digitalisation is having on vulnerable customers. The survey revealed 99 percent of all bills in the country are paid electronically, while 78 percent of instore payments are non-cash. According to the DPA's infographic, the Netherlands has one of highest internet banking penetration rates globally, reaching 84 percent in 2020, up from 77 percent in 2012.
The continued march to a digital and cashless economy has raised a number of concerns and interventions from policymakers around the world as they grapple with the impact of this seismic shift on vulnerable citizens. For example, in July 2021, the UK government published a consultation setting out proposals for new laws to protect cash access for the long term, while in Sweden, the six largest banks have legally been obliged to provide consumers and businesses with certain cash services throughout Sweden.
To support vulnerable people, the DPA is working with its members to ensure there are: accessible products and services; availability of personal contact through different channels; and digital education, in conjunction with physical aids. A recent survey published by the country's central bank revealed around two thirds of customers who classified themselves with low digital skills perceived they could independently purchase online or use online banking.
Switzerland - Instant Payments On Agenda, But No CBDC
The European Payments Council has published a wide-ranging interview with Dieter Goerdten, head of products and services at SIX BBS Ltd, and Michael Montoya, CEO of SIX Interbank Clearing Ltd, discussing payment developments in Switzerland. Three key points stood out in the interview:
1. Non-cash payments have for a time exceeded that of cash payments in the country. According to the SIX representatives, “The Swiss people like cash as a means of payments because it guarantees privacy. Yet in Switzerland — like everywhere else — cash usage is steadily declining.”
Switzerland is well behind many other developed markets in terms of digitalisation of payments. For many years cash has been king in the country, and alongside the likes of Japan and Germany, has made comparably slower progress in reducing cash usage compared with many of its peers. However, the latest data suggests it well on its way. To put this in perspective, non-cash payments became dominant in the UK for the first time in 2014, according to UK Finance. By 2020, cash represented just 21 percent of total transactions. Could we see similar trajectory for Switzerland?
2. The Swiss financial sector, led by the Swiss National Bank (SNB), is planning to introduce a new instant payments service from 2024. “By this time, the SIC 5 clearing and settlement platform will be ready to process these new instant payments,” noted Goerdten and Montoya. Of particular significance, the central bank has mandated that the largest SIC-participants, representing 98 percent of the retail payments market, be able to receive instant payments as of August 2024. Other participants will be expected to receive instant payments by 2026.
Inherently important to any payments scheme is the ability to reach all bank accounts in the market. Everyone who can participate must be able to connect easily and securely to the infrastructure from the outset. Sometimes there are competing agendas among banks, with some taking a wait and see approach. The most successful instant payments markets around the world are typically those where widespread participation was available from the outset. One way to ensure full participation is for policymakers to intervene. For example, a central reason behind the European Central Bank’s introduction of Target Instant Payments Settlement (TIPS) was that it was concerned its objective of pan-European reach for instant payments might not be met. To further ensure this policy objective, it has also mandated that all payment service providers which have adhered to the SCT Inst scheme and are reachable in TARGET2 will need to also become reachable in TIPS.
3. A retail central bank digital currency (CBDC) is not on the agenda in Switzerland. According to Goerdten and Montoya: “There are no concrete plans. The SNB does not currently see any advantages of a CBDC for the wider population. In the view of the SNB, such a 'retail CBDC' could have undesirable side effects on monetary policy and financial stability." This is in stark contrast to many other major central banks.
UK - Consultation For New AI and Data Protection Risk Toolkit
The Information Commissioner’s Office (ICO) has released a consultation to consult on a beta version of its artificial intelligence (AI) and data protection risk toolkit. The ICO will look for views on its toolkit, which “is designed to assist risk practitioners to identify and mitigate risks to data protection that AI systems that process personal information create or exacerbate”.
The toolkit follows four stages of the AI lifecycle: 1) business requirements and design; 2) data acquisition and preparation; 3) training and testing; 4) deployment and monitoring.
The ICO is seeking views from businesses and organisations across different market sectors, and is specifically looking to hear from “compliance focused roles and technical roles who are responsible for the development, deployment and maintenance of AI systems that process personal data”.
In a recent response to the government’s General Data Protection Regulation (GDPR) reform package, the ICO stressed the importance of maintaining high data protection standards.
Indonesia - New Payments Regulations Issued
Bank Indonesia has released comprehensive regulations regarding the use of fund transfers, scheduled clearing, transactions, securities administration and real-time fund settlement systems.
The 90-page regulation details the type of entities that may access these systems, the eligibility requirements for entities wishing to use these systems, and the continuing obligations of entities once they have been granted permission to use these systems.
United States - Biden Administration Continues Efforts To Tackle Ransomware Attacks
The White House has published a fact sheet on the ongoing efforts the Biden administration has taken against ransomware attacks. Their actions have been organized along four lines of effort: disrupting ransomware infrastructure; bolstering resilience; addressing the use of virtual currencies to launder payments; and setting up international cooperation to disrupt the ransomware ecosystem.
As part of the effort to stop the illicit use of virtual currencies, the Federal Bureau of Investigation (FBI) is building an Illicit Virtual Asset Notification (IVAN) information sharing partnership and supporting platform to improve timelines of detection and disruption of ransomware and other illicit virtual currency payment flows.
President Biden has also established the White House and Kremlin Experts Group with an aim to press Russia to act against criminal ransomware activities coming from its territory.
Also in the U.S., there were many responses to the Federal Reserve consultation on proposed FedNow rules. U.S. banks and payments associations have generally asked the Fed to maximize the interoperability between the new instant payments system and its private counterpart, The Clearing House’s RTP network. However, VIXIO was intrigued to read the responses from several individuals describing themselves as "freemasonary". Among the answers to the Fed's proposed changes was the suggestion that the UK pound should replace the U.S. dollar as the reserve currency of the world. Another suggested the U.S. should instead implement the silver standard to stabilize the U.S. dollar exchange rate. To that end, they advised the country to buy large amounts of silver from Taiwan.
