This shift was not driven by any policy but as a consequence of technology providing more convenient ways for us to transact with each other. The shift as I recall has generated very little controversy or political attention. There has been a political response, but this has more about financial inclusion, about ensuring access to a bank account and to “One of the most important forms of currency in England in Henry's time were notched "tally sticks" used to record debts. Tally sticks were quite explicitly IOUs: both parties to a transaction would take a hazelwood twig, notch it to indicate the amount owed, and then split it in half. The creditor would keep one half, called "the stock" (hence the origin of the term "stock holder") and the debtor kept the other, called "the stub" (hence the origin of the term "ticket stub.") Tax assessors used such twigs to calculate amounts owed by local sheriffs. Often, though, rather than wait for the taxes to come due, Henry's exchequer would often sell the tallies at a discount, and they would circulate, as tokens of debt owed to the government, to anyone willing to trade for them. Modern banknotes actually work on a similar principle, except in reverse.” Graeber (2011) 3 The Payments of Wages Act 1960, as amended by the Truck Act. 2  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  commercial bank money so that people were not left behind by the change.
And this year, we will consult on giving greater access to our balance sheet as well as our infrastructure to non-bank payment providers. There is also still considerable opportunity to improve the domestic retail payment systems. FPS is not available, unlike in some other countries, at the till. And while the card schemes offer instant transaction it can take a number of days for merchants to receive the value of the transaction. These add to costs which are eventually borne by consumers. Two years ago, the 3 main scheme companies in the UK were consolidated into one entity that now is developing a new single ‘instant payment’ interbank system - the ‘New Payments Architecture’. The aim is to provide a faster, more resilient, and more efficient interbank system that is open to bank and non-bank payment service providers, and one that will enable and encourage innovation and competition including instant payment at the point of sale. Innovation and competition can lead to better, cheaper, payments services in the economy. But, the payment systems on which we depend have to be reliable and robust, prudentially and operationally. Regulation, therefore needs to keep pace with the changes in the payments landscape and the proliferation of new actors. The same risks have to be subject to the same regulation. The current regulatory regime focusses on the banks and core payment systems that have traditionally performed most of the functions, the ‘chain of actions’, involved in making transactions.