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Exploring Perceptions of Consumer Protections in Payments

We (Pay.UK) have today published summary findings from primary research exploring perceptions of consumer protections in payments.

We commissioned PwC Research to undertake this primary research following from the secondary research published in November 2020 into Consumer Protections in Payments. The Pay.UK End User Advisory Council recommended primary research was undertaken, and we saw the great value in hearing from consumer directly about their experience of payments and consumer protections.

The research explored a range of topics, including consumer understanding of payment behaviours; the role of protections; usage and attitude to Faster Payments; and perceptions and gaps in payment protections.

Whilst the issue of fraud and APP scams are critical in today’s world, fraud was out of scope for this particular research as the detriment that customers face from authorised push payment (APP) scams is well known, and work is already being undertaken across the industry to improve solutions in this space.

The following paper covers a summary of the key research findings, highlighting differences between different consumer segments, their understanding of payment methods and protections and motivations for their choices. The paper concludes with next steps, including policy work on the topic. We have created a working group with UK Finance that has provided input and challenge into the process so far, and will continue into the next phase.

Along with our own project, the PSR is also looking at what protections may be needed. We hope that this primary research will be helpful in considering what detriments may arise, and how they may be addressed.

The research highlights:

  • Consumers report a range of motivations for using these payment methods – convenience and ease stand out as key, and therefore these could encourage uptake if a new method were to have these characteristics
  • Consumers are often unaware if and when they are using Faster Payments, and lines are more blurred with consumer-to-business payments. Protection is important but lack of it is currently not a barrier to more people using FPS
  • A range of factors may increase the need for additional protection in future:
    • Promotion by financial providers, retailers or tech companies
    • Increasingly fragmented payment provider markets (particularly online)
    • Increasing use of the Faster Payments Service (FPS) for ‘higher risk’ purchases.
  • It is important to note that financially vulnerable and less confident consumers, who have different motivations and levels of confidence, are currently seen to be less well placed to take advantage of existing protections. Future work should bear this in mind.