The digitisation of our commercial lives has brought us new levels of convenience. Banking can be done on a phone app with no need to queue in-store, credit card bills can be paid online, train tickets bought on a phone and much, much more. Yet, this convenience can also come with ongoing obligations.
Recurring payments, for example, are a source of regular frustration for many consumers. Known, technically as Continuous Payment Authorities (CPAs) these agreements allow companies to take money from you in exchange for providing a service, such as subscription to an online service.
They appear to be just like Direct Debits but while Direct Debits take money from your bank account, CPAs take money from a payment card. While they are still subject to oversight by the FCA, they do not have the same set of rigorous consumer protection guarantees that Direct Debits do, such as ease of cancellation, compensation and refund, in the case of error.
Keeping track of these payments can be challenging enough when they are monthly, but when, as they are in some instances, annually, it can be even more difficult. Consumers either forget they have subscribed to certain services or, in many instances, sign up to something without realising, due to the information being hidden within lengthy T&Cs. There is often no warning that these payments are about to exit the consumers account, leaving them surprised and confused that a company has taken money from their account for a service they may have never used.
Change may well be on its way and this is good news for the consumer. At the heart of recommendations from both the Payment Services Forum (PSF) and the Second Directive on Payments Service (PSD2) are new regulatory developments looking to fundamentally enhance consumer experience. A critical component of this is through improving choice, experience and protection for consumers.
At MYPINPAD, we believe the next challenge is how to deliver these changes conveniently, securely and with a better consumer experience.
We have discussed why a little friction in payments is not a bad thing before. Giving people the ability to authorise payments by entering their card PIN on their mobile device to authorise a transaction is something we know consumers would welcome.
So taking this principle and applying it to recurring payments would make perfect sense. Our innovative solutions would not only notify consumers of the payment, it would also give them the opportunity to review it and then decide if they want to continue using the service and, therefore, make the payments.
Eliminating those nasty surprises in the bank statement is a simple and effective way to bring greater control over our personal finances.