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Payments and portability, again

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The Minister says that customers should have account number portability so that they can switch provides just like they do with mobile phone numbers. But banks accounts don’t have SIMs, so here’s what we should do.

What with one thing and another I was too busy to put together a response to the call for consultation on digital currencies from the UK Treasury and the “Minister for the City” Andrea Leadsom. I’ve just looked through the British Bankers Association (BBA) and Payments Council response though, and it’s not bad. It says, essentially, digital currencies might be good or bad.

“Digital currencies and the distributed ledger functionalities that enable them are an innovative technology that can potentially offer benefits to consumers, businesses, government, and the wider economy.”

[From UK banking body moves to regulate bitcoin – Payments Cards & Mobile]

I have to admit to having a soft spot for the Minister. In a letter to The Daily Telegraph back in September 2013, she noted that (just as I had predicted) that the Current Account Switching Service that launched that month was (I paraphrase) a bit of a waste of time and money. She then went on to say that customers should have account number portability and be able to switch banks as easily as they can switch mobile phone operators. As I have pointed out before, this is not the solution, because bank account numbers and mobile phone numbers are not the same thing at all.

A phone number is an indirect reference to your phone (well, your SIM card actually) whereas the account number is the “target”. Thus, we shouldn’t really compare the account number to the phone number, but think of it more as the SIM

[From Could bank account numbers be portable like mobile numbers?]

I am not against the principle that the Minister espouses but the implementation. She formulates the problem as:

Ever since I was first elected I have been campaigning to ensure customers can change their bank accounts as easily as a customer can change their mobile phone provider.

[From Andrea Leadsom | Home]

So what implementation should we have then? Well, if we treat the bank account number as the SIM number (its conceptual equivalent) and find something else to be the equivalent of the mobile phone numbers. There are two possibilities in my opinion. One is to have virtual account numbers. I’ve previously put forward the “7-0” solution around this.

The 70 code is unused, so we can issue people with VANs of the form 70-ZX-XX 99999999. These would be compatible with all existing systems and with the IBAN scheme.

[From A suggestion for doing something about account switching in the UK]

The idea here is that the customer gives billers, employers, counterparties the “70” account number that never changes but then chooses which bank account to map it to. They can change this at any time, there’s no need to go back to the billers, employers, counterparties and get them to change anything.

The other way to approach it (and the better way in the long run) is to stopping messing about with 1960s sort codes and account number and use names instead. I used to have a CompuServe number (100017,3342 if memory serves) but now I have a Facebook id, a Twitter id and a LinkedIn id. Why can’t I have an Account ID? As I said at last year’s Payment Innovation conference,

this all links to the discussions about the idea of a financial service passport (or a “pay name”) at techUK last year. I really think that the idea of pseudonymous, strongly-authenticated CDD-inside identities is an idea whose time has come.

[From Payment system regulation as barrier to payment system innovation]

Account numbers! Goodness me! The Minister should be dragging us into 2015 not 1965. I shall mention this to her at the techUK dinner on 24th February where I shall be putting on a suit and tie and using the cutlery in the correct order as the chair of the techUK Payments Group. See you there.

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