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Assessing the impact of non-banks on the payments business: The challenge to safety, efficiency, customer loyalty and payment revenue streams
Journal of Payments Strategy & Systems,
1
(4),
290-303
(2007)
Abstract
This paper explores the impact of non-banks in the payments/transactional banking arena and some of the business models they use. These non-traditional bank competitors include: retailers, mobile phone operators, beneficiary service providers, payment service providers, system operators, direct debit and other bureaus, payroll service providers, money transfer service providers, etc. A high level overview of each of these ‘new’ competitors is given and then a brief synopsis of some of the risks inherent in the services provided. The impact these competitors are having on banks, the financial services industry and other stakeholders and other issues need to be considered, namely the needs they have identified and are fulfilling where banks have not played or cannot easily play; more specifically, the unlevel playing field they compete in with banks, due to little or no regulation and/or regulatory oversight of these players and the effects on the risk, safety and efficiency of the payment system. How can the services they offer be fulfilled in a more appropriate risk-based manner, what can these competitors learn from each other and how could regulators possibly address the issues to enable the non-banks to fulfil the identified needs but ensure risks are adequately addressed?
Keywords: Payments; transactions; competitors; regulation; business models; beneficiary; retailers; mobile; payroll
The full article is available to subscribers to the journal.
Author's Biography
Brian Le Sar has 20 years’ experience in the banking and consulting sectors. He is currently Director, Payment Business Systems, for the Standard Bank Group and is responsible for conceptualising the bank’s domestic and international payments strategic and system requirements for the future and then ensuring the design and development thereof. Brian is also responsible for the Group’s Africa payments portfolio. Prior to this, he held the position of Director, Group Payments Strategy & Interbank, and was responsible for managing the Group’s payments strategy, which focused on issues such as dis-intermediation, cannibalisation, migration and payment and channel optimisation. Within the inter-bank payments arena, he is responsible at both bank and industry level for managing changes which have an impact on, or are affected by, industry initiatives within the National Payments System and focuses on, among other things, risk reduction within the industry. Brian is a Council Member (Ex-Chairman) of the Payments Association of South Africa (PASA) and current Chairman of the PASA Governance Committee. He is currently a member of the Standing Committee to Review the NPS (National Payment System) Act and the South African Reserve Bank’s National Payment System Strategy Committee. Brian was part of the core team establishing Payment Clearing House (PCH) Agreements for the industry and, until recently, a director on the Bankserv board, the largest domestic payments clearing house operator in South Africa. He was also, until recently, a member of the Bankserv Board People Management Committee. He holds a B.Comm (Honours) and an MBA.
