In the Chinese year of the rooster, the consumer could win out. There are currently a few consumer protection and competition issues coming to the fore, some of which may set a precedent. And in the context of a changing banking environment, arguably putting more control in the customer’s hands, for example the onset of PSD2 changes, it all points to a changing landscape. Anna Milne writes
Firstly, MasterCard’s acquisition of VocaLink, the CMA (Competition and Markets Authority) has raised concerns about VocaLink and MasterCard being two of the three most credible providers of infrastructure services to the LINK ATM network operating across the UK.
The network is of course owned by the banks and if two of the three best infrastructure providers are in cahoots, this reduces the playing field and therefore the opportunity for the banks to achieve value for money when tendering for infrastructure provision, hence the chance of cost hikes being passed on to consumers.
MasterCard came back with a pretty credible response, which seems to have placated the regulator. VocaLink will make its connectivity infrastructure available to an alternative infrastructure provider, meaning a competitor could serve members of the LINK ATM network through VocaLink’s connection, instead of having to build their own.
VocaLink will also contribute to LINK members’ switching costs and relinquish rights to the the LIS5 messaging standard (used to communicate between members cross-network) to the LINK members.
All of the measures relate to cost reduction of course, and as such it remains to be seen quite to what extent VocaLink will let go of the cash reins but for now it seems an adequate response.
Secondly, again involving MasterCard, the hearing for the consumer class action is taking place to establish whether it will go ahead or not. This would be a landmark trial and something of a coup for consumers all round. In the interests of balance, I won’t harp on too much about MasterCard.
The retail banking investigation into competition continues, the latest update of which is that switching stats are deemed too low and banks are to be asked to honour switchers’ overdraft facilities at their current establishments- or at least to inform immediately if they cannot.
Over Christmas, it has emerged that a record amount of cash was withdrawn, more than the total amount withdrawn on the busiest shopping day before Christmas last year. I must say, I too have embarked on a cash-only spend habit for the month of January, purely for research purposes. Enough people had said to me in the run-up to Christmas that they find cash so much easier for budgeting and curbing expenditure that I decided to give the old goat a go again.
The most remarkable difference thus far is the increase in the number of times I’m washing my hands. Cash is just dirty and unhygienic. As for budgeting, it’s harder to remember exactly what it is all spent on but I do concede that when you have a physical sum in your wallet, diminishing before your very eyes, it helps in deciding whether a purchase is truly necessary or just superfluous expenditure. It’s been a useful exercise but I’ll be back tapping my contactless cards next week, albeit looking forward to the next raft of mobile wallet budgeting tools a la Monzo and the like that are surely coming our way this year. And surely at some point soon they will converge upon a decent, ubiquitous, solid solution.