Tuesday, November 21, 2006

UK Government changes governance for payment schemes

See the website of the OFT to find out that:
...following a recommendation from the Chairman of the Office of Fair Trading, the Chancellor of the Exchequer has agreed to the establishment of a new governance body for payment systems, the Payments Industry Association. In addition, the Payment Systems Task Force, which is chaired by the OFT, has also announced that agreement has been reached on a number of improvements to the cheque clearing process that will benefit both consumers and businesses.

The Payments Industry Association will be the new strategic governance body for the payments industry in the UK, and will concentrate on access, innovation and governance issues. It will provide a lasting governance solution to the issues raised in the Cruickshank Report. The Payments Industry Association Board will consist of independent directors and directors from the payments industry with an independent Chairman, Brian Pomeroy. The OFT will review the outputs and achievements of the Association against its objectives after two years. The Chancellor has agreed that the majority of the outstanding work of the Payments Systems Task Force can be transferred to the Payments Industry Association. The Task Force will meet for the last time in December.

I think this may be a model that may become the norm internationally. In the Netherlands, we do it a bit different, but not too different altogether. The scheme-owner Currence has a board of Commissioners with independent members. And its work is closely monitored by the Competition Authority. Meanwhile, the policy issues are discussed in the National Platform for Payments. And we also maintain a Bankers Association that does payment things.

It will be interesting to see which countries follow suit.