6 degrees of separation – from reality
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26 June 2013Gareth Lodge
Many of us will have heard the theory of 6 degrees of separation. This suggests that anyone could be introduced to anyone else on the planet in 6 steps or less. This has in turn spawned a version called 6 degrees of Kevin Bacon, where any actor can be linked to Kevin Bacon – try typing Bacon's Number into Google with an actor’s name and it will show you the number and connection route. In the payments industry, that separation is probably closer to 2 than 6. It’s inevitable that most of us who have worked in the UK will know someone close to the recent Payments Council Roadmap. When I say how thorough and well written it is, this isn’t out of politeness however. The Payments Council find themselves somewhat between a rock and a hard place, with the regulator seeming set on radical change come what may, rather than based on any tangible or rationale reason. Hence the terrible play on words in the title – the 6 outcomes set out by the roadmap suffer from 6 degrees of separation from reality. To be fair, the paper does not purport to be doing anything other than set out the options. But the danger is that the politicians will see these as possible solutions, rather than the setting out a set of theoretical options. The single largest barrier for many of the options is that significant investments have already been made in the banks payment systems and infrastructure, and often at the behest of the regulator. For instance, do a simple sum of the costs of the following initiatives:
- the upgrade of VocaLink to the new processing platform;
- adoption of SEPA standards;
- the cost of implementing Faster Payments;
- and the investments made in banks new payment platforms to respond to these changes