Regardless of actions made by regulators, a report commissioned by the government on Wednesday stated that Britain needed a "digital alternative" to depending on Visa and Mastercard for card payments.

The Future of Payments Review's findings support long-standing concerns in Europe over a disproportionate dependence on the two American companies for card payments, despite appeals and initiatives to develop a "home grown" substitute failing to gain much traction.

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A report commissioned by the government on Wednesday stated that Britain needed a "digital alternative" to depending on Visa and Mastercard for card payments.

In a comprehensive review of the payments landscape, it was highlighted that, although cards play a significant role in facilitating transactions, a substantial level of discontent has been voiced by various establishments and merchants regarding the associated costs of card schemes.

The dissatisfaction expressed by shops and services is believed to stem, at least in part, from a perceived dearth of alternatives or digital options to the current card schemes, according to findings presented in the review.

The Payment Systems Regulator (PSR) in Britain is now conducting an examination of the fees that card schemes impose. This is a long-standing dispute where Visa and Mastercard are pitted against "merchants" who charge their cards to customers making payments.

It further stated that "open banking," or third-party fintechs accessing a customer's bank data for payments services with consent, would give shops a less expensive option to card systems.

According to the report, direct consumer-to-consumer transfers are now a "clunky" experience that may be improved with open banking.

Mastercard's Investment in Innovation and Visa's Collaborative Commitment

Mastercard expressed its gratitude for the review's acknowledgement of the value of cards and stated that it consistently makes investments in the newest and most cutting-edge payment technology, such as open banking.

Visa has expressed its endorsement of the review's findings, welcoming the conclusion that positions the UK payments landscape favorably. In a statement, the company conveyed its eagerness to collaborate with the government, emphasizing a shared commitment to maintaining the UK's leading role in payments innovation. Visa underscored its dedication to contributing to ongoing efforts that foster a dynamic and cutting-edge environment within the country's payment sector.

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Embracing Open Banking and Real-Time Payments

The review, which is modeled after previous initiatives in Brazil, Sweden, and India, urges the payment sector to use open banking technology in place of the conventional method of transferring funds, which needs users to provide sort codes and account numbers.

According to the analysis, transactions processed through Faster Payment Service often take between 70 and 80 seconds, whereas transactions processed through their equivalent systems in the aforementioned nations may be completed in less than 30 seconds.

The Faster Payment Service operator, PayUK, was pleased with the evaluation and that innovation in digital payments was "crucial for businesses and consumers." As a result, the company is developing a new payment architecture.

As the nation's premier real-time payment system, The Clearing House's RTP® Network, now services 65 percent of demand deposit accounts, PYMNTS on Wednesday looked at the growing use of real-time payments.

According to experts, the number of real-time payment transactions in the United States is expected to soar from 1.8 billion last year to an astounding 8.9 billion by 2026.

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