HSBC-BACS outage, as UK announces a world class payments system

Which do you want first, the good news or the bad news?  OK, I’m gonna give you the bad news first.  HSBC is down.  According to the Daily Telegraph:

HSBC hit by payments crash on payday

The giant bank says it is having problems with the BACS payments system, as customers wait for their pay ahead of the bank holiday weekend

Customers at HSBC are having problems transferring money because of a payments systems crash at the bank.  The glitch has struck just as customers await their salary payments for the end of the month, and as they prepare to take the long weekend off.  In addition, Friday is typically the day on which house sales complete, and the funds to buy and sell homes are transferred.

"There has been a fault in the information used to process some payments from HSBC business customers. Approximately 275,000 payments have been affected, including payments to customers of other banks," HSBC said.

The bank has not yet been able to give details of the number of customers affected, or the nature of the problem.  Payments operator BACS said it is aware of the problem, which is isolated to HSBC's payments processes.

“BACS is aware of an isolated issue that has affected one of its member organisations," the firm said. "The BACS system is operating as normal and we are currently working with our partners to help them resolve this as quickly as possible.”

It comes after series of payments problems at rival the Royal Bank of Scotland, which is ploughing £3.5bn into revamping its payments systems. RBS was fined £56m in 2014 over a lengthy payments outage in 2012.  Lloyds Banking Group was also struck by a failure of its Faster Payments system in 2013, while the Bank of England had computer problems leading to a crash in the CHAPS payments system last year.

The good news? 

Payments UK Publishes Vision for Maintaining World Class Payments in the UK

Today (28 August 2015) Payments UK publishes its initial report on its World Class Payments project – setting out its vision of the enhancements that would ensure that payments in the UK continue to be world class.

Payments UK, the recently launched trade association for the growing payments industry, has taken an evidence-based approach to understand what changes consumers, businesses, charities, the public sector and the industry need from payments in the future.

The aim of this work is to enable the industry and its regulators to take informed decisions that will support competition and innovation by identifying a steady stream of potential new benefits that are important to customers.  

Evidence was analysed within the context of the fast-moving payments environment, to identify thirteen features that build on the world class benefits customers already enjoy. Analysis considered customer needs, technological, regulatory and market developments and improvements already in the pipeline as well as comparing the UK to other leading countries. 

Payments UK has identified four features it believes the industry should prioritise. The specific timing and approach will need to be determined by the industry and regulators in line with market demand.

The four features Payments UK believes should be prioritised are:

• Access to the payments infrastructure for those who offer payments to customers.  Creating a level playing field for new and existing Payment Service Providers will provide the optimum environment for delivering new and innovative and enhanced services to customers such as enabling customers of all providers to check their balances in real time.
• Confirmation of payee before making a payment. Enabling customers to confirm that the person they are paying is who they intend it to be, before they make the payment, to provide confidence it will not be sent to the wrong account.
• More control over outgoing payments for customers. Enabling greater control and flexibility over the timing of regular payments such as bills and providing an efficient e-invoicing and reconciliation capability for small businesses, charities, larger corporate users and Government.
• Enhanced data: Enabling more and better information to be linked to payments – this will particularly benefit the public sector and corporates. This will make it possible to provide additional reference information with an electronic payment helping businesses better reconcile payments.

Tim Yudin, Payments UK’s Director of Design and Delivery, said:

 “Changes in technology, regulation, and consumer preferences mean that the pace of change in the payments sector has never been greater. This makes it the perfect time to assess which future developments can deliver the very best outcomes for consumers, businesses and the public sector. Recent innovations such as the Faster Payments Service, the Current Account Switch Service and Paym mean we have a great platform on which to build.

 “Working closely with a wide range of stakeholders we have identified the features and functionalities that customers really want. I believe the first steps we have taken in our World Class Payments project have set out a clear vision and direction of travel: it is now vital that the industry, regulators, technology providers, the government and of course customers move forward together.”

As part of the World Class Payments project, Payments UK commissioned an online YouGov survey of consumers and senior small-medium business decision makers. Certainty that all types of payment would be immediate was one of the most useful proposed changes – the requirement was selected by 58% of consumers and 57% of SMEs. Over half of consumers (53%) and SMEs (57%) also said that ‘being able to check that the bank details are correct for the person I want to pay before I send an electronic payment so that it does not go to the wrong account’ would be useful.

World Class Payments in the UK – an initial report, is expected to help inform the newly formed Payments Strategy Forum, set up by the Payment Systems Regulator, when setting strategic priorities.  

Download the report here.