Innovating on the payments 'national grid'

He’s not a transaction banker but he plays an integral role in the industry, working for the company that underpins the bulk of retail payment flows in the UK. Chris Dunne, payment services director at VocaLink, could be described as a plumber of the transaction banking industry, overseeing the pipes for inter-bank payments. Excluding high-value payments – which run over CHAPS (a same-day automated payment system) – and the card transactions that run on networks such as Visa and MasterCard, VocaLink provides the plumbing for the other flows on the bank-to-bank networks of Bankers' Automated Clearing Services (BACS) and Faster Payments as well as the ATM network LiNK. 

Mr Dunne has had a career in connecting the pipes between banks. He previously worked for Reuters, where he was head of strategy for treasury services, a role in which he connected banks for foreign exchange and money market transactions. He then worked for what was then known as BACS, which became Voca and then VocaLink. He worked on re-architecting the BACS platform and, more recently, has been working on Faster Payments, which was launched in the UK in May 2008. The international version of Faster Payments has now gone live in Singapore, and VocaLink has been in the bidding process to do the same in Australia. 

Faster Payments does not just mean that people receive their bank transfers more quickly. The technology enables further innovation, as the combination of mobile and real-time payments means that other innovations can be layered on top of it, such as Barclays’ mobile money transfer scheme Pingit and Zapp, a mobile payment app. In April 2014, the UK’s Payments Council launched Paym, a service that connects mobile phone numbers with bank accounts so that the mobile number can be used a proxy for a person’s bank account details. In the UK, it is no longer necessary to share a bank account number for a bank transfer. Instead, it is possible to make a bank-to-bank transfer by sending the payment to a person’s mobile number. 

This, however, does not mean that cash is going to die any time soon. While cash volumes are decreasing in shops in the UK, the amount being withdrawn from ATMs is remaining constant, says Mr Dunne. This could mean one of two things: either people are keeping cash under the mattress or the informal economy is alive and kicking.