Published on 9th January 2023

Our recent research paper on Britcoin examined several of the failures in the digital payments industry that have gone unresolved.

The paper is entitled ‘CAPTURE – BigTech and Digital Payment Giants dominate the committees evaluating the replacement of physical cash with ‘Britcoin’ – a UK ‘Central Bank Digital Currency’’.

You can find a click-through to the full paper here:

The digital payments industry seems to enjoy the full support of government and of financial authorities in driving the UK towards a digital-only future, regardless of what the UK’s consumers and businesses think about it.

Bank branches and ATMs are closed and replacement ‘Banking Hubs’ equate to a financial soup kitchen; access to cash is designed for the sick, the halt and the lame. Digital, on the other hand, produces Authorised Push Payment Fraud, illegal on-sale of customers’ bank statements, and deductions-from-face-value on card payments that lead to higher prices for all.

The support for digital comes from the very top of course, from the UK’s own Mr Silicon Valley – Rishi Sunak, a scion of Stanford University as is his wife. Mr Sunak’s milieu is the venture capitalists and hedge funds sitting behind recent ‘developments’ in the payments world – Open Banking, Fintechs, Bitcoin, Non-Fungible Tokens, Stablecoins.

That being his and his family’s milieu seems to have led to him indulging in the delusion that this is the milieu that the rest of us aspire to. According to the BBC, Mr Sunak, Chancellor of the Exchequer at the time, said that ‘We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term’.[1]

Except the rest of us don’t, now that Terra Luna, FTX, Silvergate Bank, Three Arrows, Voyager Digital, Celcuis, BlockFI and many more have brought into full view what that milieu is all about.

What is required is four things upfront before anything else happens:

  1. The complete elimination of Authorized Push Payment Fraud
  2. The deductions-from-face-value on card payments to come into line with the Interchange Fee Regulation at 0.2% for debit cards and 0.3% for credit cards
  3. A new interchange fee schedule for cash withdrawals from ATMs that ensures that the UK’s ATM network is all free-to-use and economically viable for at least the next three years until…
  4. A new and sustainable model for face-to-face banking that accepts neither current bank branch services or ‘Banking Hubs’ as its benchmark

Pending that the Bank of England’s Britcoin project should go into the coolbox, along with any further expansion of Fintech and Open Banking. Open Banking has become a channel for Authorized Push Payment Fraud and that needs to be stopped dead in its tracks. There should be no addition of savings accounts to the scope of Open Banking: all that will do is ensure UK consumers and businesses lose more money to fraud. Open Banking’s other new wheeze – called Variable Recurring Payments – needs to be coolboxed: it is dangerous to add a new payment mechanism to a service through which too much of customers’ money already evaporates.

The above measures would rein in the runaway horse of Fintech, Open Banking and digital payments generally, and either cause it to operate reliably and safely in the interests of wider UK society, or have it put down. Unfortunately the people currently at the top of government appear to be the ones most deluded in their enthusiasm for this madness.

[1] accessed on 15 April 2022