The Payment Expert Podcast is joined by Justin Jacobs, Chief Policy and Engagement Officer at Pay.UK, to discuss programmability, interoperability, fraud prevention, and what it takes to maintain trust as digital money evolves
Stablecoins, tokenised deposits and account-to-account rails are multiplying alongside traditional payment systems – and how those different forms of money coexist, interoperate and stay secure is the central challenge facing the industry.
Justin Jacobs, Chief Policy and Engagement Officer at Pay.UK and formerly at the Bank of England, joined the Payment Expert Podcast to discuss what a multi-money world means in practice.
He sees three distinct opportunities in the change:
- New use cases through programmability
- Greater point-of-sale optionality
- And faster and cheaper cross-border payments.
He notes the framing for customers should be use cases rather than technology, as most end users care about reliability, speed, cost and consumer protection, not the mechanics underneath.
Programmability is where Jacobs sees potential in the near-term.
He says: “Linking the completion of the payment to a specific outcome” – delivery versus payment being the clearest example, where a transaction only confirms when a purchase arrives – changes what payments can do rather than simply how they move money. “It does what it says on the tin,” he says.
PAY.UK: No “walled gardens” in the interoperability push
For that potential to be realised, interoperability has to work. Jacobs points out what he calls the “walled garden” risk: fragmented liquidity pools and friction at the boundaries between payment types undermine the whole proposition.
“You don’t want money that is unreliable,” he says, pointing to stablecoin redeemability as a baseline consumer expectation.
The vision Pay.UK is working towards is one where transitions between forms of money happen seamlessly behind the scenes – and where liquidity is managed efficiently across the system rather than sitting in separate pools.
“How we can manage that in one pool so that banks can move money around easily without having to have separate pools with different sorts of payment systems, I think will be important,” he says.
The same logic can be applied to fraud prevention; Jacobs points to confirmation of payee as a foundation the industry now takes for granted – the ability to verify that an account belongs to who you think it does before a payment completes.
Pay.UK’s enhanced data exchange programme, which enables banks and PSPs to share fraud markers beyond basic account details, is close to launch and builds on that foundation.
His closing advice to firms is to resist waiting for regulation to set the agenda. “Don’t wait for regulation to have the answer. Think through the risks. And if you’re managing risk well, on the whole, I’m pretty confident you’ll be meeting regulatory expectations.”
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