The Chair, CEO and initial board of the New Payment System Operator company have been announced, this “NPSO” being the organisation that will receive the tablets-of-stone of the UK Payment Strategy from the Payment Strategy Forum in December: the Blueprint for the New Payments Architecture or “NPA”.

Seven individuals are named:

• Four of “the great and the good” of modern British society, drawn from our many worthy quangos, trusts and advisory bodies, one being a former Blairite junior minister and all of them six-cyclinder "nomenklatura" - but of course with no prior knowledge of retail payments;
• Three leading figures from the Payment Strategy Forum.

What is the added value being brought to the project by "the great and the good"? Their CVs are indicative of “wozzers” rather than of “didders”: they were Economic Secretary to the Treasury, or were CEO of the National Consumer Council, or were Chair of the Southern Water Customer Challenge Group, and so on, but what they did and achieved in those positions is much harder to discern. One claims a Cambridge MA in Modern Languages but professes to only Elementary Proficiency in Spanish and German, and Limited Working Proficiency in French: did he get by with the Penguin translations of Balzac, Cervantes and Thomas Mann? Another served as chair of the Yeovil District Hospital NHS Foundation Trust, but naturally has no medical background: he was a PwC accountancy partner in their Taunton office.

“Nomenklatura” is the correct term for the group that these people are drawn from, a phrase coined under the Soviet system whereby influential posts in government and industry were filled by Party appointees. In 2017 Britain, for "the Party” we can read this club of CBEs, MBEs, Lords, Dames, Blairites-in-exile, who appoint one another. Club members can be comfortably parachuted into the governing bodies of industry verticals of which they have no experience, so that the governing body can tick all the boxes of independence, long experience, diversity, and so on, secure in the knowledge that no-one will take the trouble to question who they are individually or who appointed them, and whether they in turn have not at some point appointed their appointer somewhere else. Who appointed the Chair of the NPSO? Would an ex-MP for Welwyn & Hatfield who was voted out in 2005, and was a schools inspector before becoming an MP, be the automatic choice for this position in retail payments? Who appointed the CEO and who appointed the Board? Have they ever served together before: above, below or side-by-side? This should be transparently disclosed. Three of the board have definitely worked together before, at the PSF.

Surely it is quite wrong for anyone who has been involved in the Payment Strategy Forum – defining the new requirements for the UK’s payment systems - to move straight onto the board of the organisation charged with delivering on them? If this is allowed, and for such an important matter as this, the suspicion cannot be excluded that the person permitted requirements to proceed through the PSF and couched in a certain way, because they knew how to deliver on them in their next role rather than because those requirements represented what was best for the country.

In the minutes of the July meeting of the PSF two of these individuals were noted as making important interventions wearing their then-current hats at a time when they must surely have known that they would shortly be wearing hats of the organisation which would be charged with delivering on the subject being discussed.

One was actually the person proposing the NPA Blueprint to the meeting. The other made an intervention about risk management, asking “for an ‘implementation risk’ sub-group to be established in H2 which should include PSO risk professionals”, thereby effectively co-opting employees of the organisation of which she was about to become a Board Member onto that forum. This would have appeared to be a disinterested observation when read in the minutes now, if the appointment of this person to NPSO had not been announced. Now both these interventions can be read as adding assurance that the project will go forward, that the new seats will be available for these individuals, and in a way both acceptable to them and to the employees of NPSO.

Where is the transparency? These people should have declared their interest in new positions at NPSO as soon as they knew of it, announced it at a PSF meeting, had it recorded in the minutes and immediately recused themselves. Alternatively, participation in PSF should have been a disqualifier for a position at NPSO.

Just as there is a sense of complete continuity of personnel between PSF and NPSO, so it seems that there is little chance of a discontinuity being introduced into the programme itself on account of what the rest of the “payments community” will have said during the recent consultation on the NPA Blueprint. The consultation process reeks of a tick-box exercise.

The consultation closed at the end of September. The same meeting minutes from the PSF July 12 meeting show that two attendees, when addressing the PSF’s H2 2017 programme plan, felt it was necessary to insert a task absent from the papers they were looking at: “FR and DG noted that ‘handover’ should not just entail a consultation response document but a final and detailed NPA blueprint, that builds on the consultation responses and the further design work being undertaken in H2”. In other words no work was originally envisaged to “build on the consultation responses”: the plan was to produce a report on the consultation but not to alter the Blueprint.

The H2 PSF programme plan contains little time for analysis of the consultation responses, rather than collating what they were: the Blueprint is to be handed over to NPSO in final form in December, and it is now October. Presumably reading and collating the consultation responses and writing a report on them will take a month - leaving at most a month to think about and address the consultation responses, and propose and agree changes to the Blueprint based on them.

However, the action point taken away by EY from that note in the July minutes was simply “EY to ensure that the final ‘handover’ deliverable is a final and detailed NPA blueprint” and this was the only open item in the PSF Action Log presented to its meeting on 29th September, but without the critical condition “that builds on the consultation responses and the further design work being undertaken in H2”. That condition has fallen away in the transposition between the minutes and the Action Log.

This evidence plus the condensed timescale preclude any possibility that the Blueprint will be meaningfully altered, let alone abandoned, as a result of the consultation responses: so the consultation is in essence an awkward inconvenience before the PSF's team on NPA can settle into their new seats as the NPSO team on NPA, with their marching orders being the same document they wrote for themselves.

The feeling of continuity is reinforced when one reads that actions are already occurring that take it for granted that the consultation report evidences support for what is proposed.

The Programme Update given to the PSF 29th September meeting pre-disclosed impressions of the consultation responses on two sub-streams (Trusted KYC Data Sharing and Payments Transaction Data Sharing and Data Analytics). The PSF was advised that the consultation responses were supportive, so that the planned actions subsequent to the consultation could be put in hand at once, although there is a wave in the direction of having a further look at the responses.

This is a quite wrong way of going about things.

A proper analysis of the responses should be made available to all interested parties and at the same time, with access to underlying data to make sure that the analysis is supported by the responses.

Instead we have partial and edited results being leaked in advance to the project sponsor and actions being taken in hand as a consequence.

Once a proper consultation report is available, there should be a process where the consultation responses are debated and processed, and the Blueprint adapted, but that is not apparently the intention of the PSF and the NPSO, and both the timing and the evidence point rather to a rubber-stamping exercise by the PSF, with the possibility remaining open that the consultation report is written in such a way as to make out that the responses were supportive, whether they really were or not.

This is quite wrong for a project that has national importance. Such a project should not be allowed to proceed without absolute clarity that the "payments community" endorses it, and without excluding any possibility that the consultation report was not a totally accurate rendition of the reponses.

The consultation responses should thus be analysed by a new third-party, an organisation that has not been involved in the PSF before, and this organisation should write the report. The responses should not be analysed by either EY or the PSF secretariat, and neither of them should write the report, or see the report before others. Indeed, the consultation responses should have been sent to this new third-party, and it should not have been possible for the PSF to have access to – and still less to mandate actions on the back of – selective and subjective judgments about the responses and well before the report on the consultation was made publicly available.

Aside from the NPA Blueprint, there really should be some difficult questions asked about a process that has resulted in three other PSF streams having already been handed off to UK Finance i.e. the re-branded Payments UK and the organisation whose predecessor was supplanted by the PSF because Payments UK was perceived as being controlled by the Big Banks. Now, two years on, this “black sheep” organisation is a “white sheep”: some sheep dip. UK Finance is thus now considered worthy to carry on with what they were doing before, and might have now completed, had the PSF process not been interposed. The three streams already handed off are:

1. Guidelines for Identity Verification, Authentication and Risk Assessment
2. Financial Crime Data and Information Sharing
3. Enhancement of Sanctions Data Quality

A fourth stream - Trusted KYC Data Sharing – will be handed over to UK Finance in due course, and a fifth one – Payments Transaction Data Sharing and Data Analytics – will be handed over to the NPSO.

All streams thus lead back to where they started: Payments UK or the scheme companies, albeit now re-jigged into UK Finance and NPSO.

A while ago we just had APACS. Then we had the three scheme companies: Cheque&Credit, BACS Payment Systems, and Faster Payments, as well as The Payments Council into which elements of APACS were grandfathered. The Payments Council was re-branded as Payments UK, and has now been rolled into UK Finance, whilst the scheme companies have been merged into NPSO (excluding LINK and CHAPS, while Visa and Mastercard never had a separate scheme company).

Along the way there has been much shuffling of the pack, and a lot of “wozzing” opportunities for board members and executives: let’s hope there’s some beef at the end of it but we should not hold our collective breath.

The three streams in the Blueprint that purport to meet End Users Needs are identical to the streams in Payments UK’s spring 2015 project called World Class Payments, based on research carried out in 2014. The projects were handed to the PSF as tablets-of-stone in 2015, and they will be ejected from the PSF body to NPSO still as tablets-of-stone in 2017, for delivery in 2019.

Let’s hope that the end users who said they wanted these solutions in 2014 have not gone and sorted their problem out in some other way by 2019, or that the underlying problems have not altered in the meantime, or indeed that these solutions do not themselves introduce new end-user detriments.

The "Request to Pay" service is apparently much in demand from consumers although I personally have never heard one mention it. A customer that normally has their regular payments made by Direct Debit will instead be presented with almost daily “Requests to Pay” – or actually a dozen “Requests to Pay” on the first day of the month and one every three days thereafter – and be compelled to spend much more time on their banking in consequence.

Who is to say that the customer will not revert to asking for a paper bill and writing cheques, so as to be allowed to do their banking how and when they like and not how New Payments Architecture dictates to their service providers to do it, who in turn have to impose unwelcome burdens on their customers?

In addition, the payment itself will be made as a credit transfer under the Faster Payments scheme and not as a Direct Debit. The customer will cease to enjoy the Direct Debit guarantee and will not have the 42-day uncontestable right of reclaim through the payment mechanism, thereby reducing their legal rights. The customer will instead be using the payment mechanism that Which? has identified as being the channel for a rising number of scams. Which? has raised a supercomplaint against the Payment Systems Regulator about scams enabled by Authorised Push Payments, of which Faster Payments is a prime example. If a customer is presented with twelve "Requests to Pay" on the same day, is there not a high chance that one will be a scam, but the payment has gone and without right of reclaim.

The added incoinvenience and the loss of the right of reclaim will be concrete detriments against payment users if they are compelled to switch from Direct Debit to Request to Pay.

It is quite possible, then, that the UK’s New Payments Architecture will not only deliver no benefits for end users that end users are still interested in, but will take the industry back several years and leave payment service users with more and worse detriments than before.

The project has, though, taken on a life of its own and there are no substantive checkpoints in its way, because the project’s proponents are in control of all the checkpoints and have already raised the barriers and switched the lights to green.