We caught up with Gregor Dobbie, CEO of Vocalink, a Mastercard company, about why the business is vital to the UK economy and what's in store for the future.
Can you start by explaining what Vocalink does?
Vocalink enables economies to function in a new, digital world by providing vital payment infrastructures. Put simply, we design, build and operate the UK payments infrastructure, which underpins the provision of the Bacs payment system, the Direct Debit system, the UK ATM LINK switching platform covering 65,000 ATMs and the UK Faster Payments systems.
It’s not something we tend to think about on a daily basis, but if you consider that about 90% of the UK’s salary payments flow through our systems, you can see that Vocalink is instrumental to the smooth running of our economy – without Vocalink, payment of salaries wouldn’t be possible.
Importantly, in a digital age, Vocalink is continually innovating to ensure that consumers and businesses have choice and flexibility in terms of how they transact.
So, basically, Vocalink is in charge of the plumbing of our entire digital payments infrastructure. That must be some responsibility for you as CEO, no?
Vocalink provides a vital service to the nation. Put simply, without Vocalink people wouldn’t get paid, people wouldn’t be able to pay, or get cash. Our importance to the UK economy requires us to be supervised by the Bank of England, providing a constant reminder to me of the role that Vocalink plays to the functioning of people’s and businesses’ everyday life. So yes, I am aware of my personal responsibilities as a result!
Hence resilience is a key focus for Vocalink?
The most important aspects of my job are to ensure resilience of the existing systems while balancing that with continued innovation – constantly striving to ensure that we are meeting the needs and expectations in a fast-paced digital world.
If somebody asked me ‘what keeps you awake at night?’ it is that our services continue to operate at the highest standards and level that our economy requires them to. When it comes to innovation, we have to consider additional factors that might not be relevant to start-ups and other fintech groups. For example, we carry an enormous burden of responsibility because we play a critical role in people’s everyday lives. Therefore, I spend a considerable amount of time shepherding our innovation strategy to ensure the upmost resilience while also imagining and creating leading-edge new products and services that are relevant to not only the UK but also globally.
What do you think then the potential is for innovation in payments to actually benefit greater society?
That’s an interesting one. One of the best quotes in banking recently came from was Ross McEwan when he was CEO of RBS. He noted that his busiest branch now was the 7:01am train from Reading to Paddington on a Monday morning – essentially he predicted the end of physical banking because everyone’s using an app. This is indicative of the huge transformation thanks to digital and online convenience that is driving how we bank, pay people, get paid and manage our finances.
Further afield, we are seeing innovation in payments revolutionise communities and now, whole economies by liberating the unbanked, making previous complicated daily transactions simple, reducing reliance on cash and helping people to get paid faster and through additional options. For example, if you look at Thailand where Vocalink implemented award-winning PromptPay, one of the world’s most successful real-time payments platforms, Thai citizens were able to make and receive payments into their bank accounts or into digital wallets linked to their national ID, mobile phone numbers or email addresses. Since launch, it has attracted 43mn subscribers and carried more than 450mn transactions with a cumulative value of over £52bn.
We will expect to see more economies and nations transform as the momentum for real-time payments and additional solutions continues.
However, there’s always a balance to be achieved. While significant numbers of people in the UK are turning to digital payment solutions, there is still a demand for the more traditional way of banking and payments. I am concerned by the closure of high street bank branches as it removes the infrastructure for many who still depend on it. In this way, technological advances could be considered to penalise some people in society who are unable to turn to digital solutions.
It’s a similar issue around access to cash with many shops and cafes only accepting cards of digital payments.
That’s true. A lot of the work we do with the Post Office is aimed at helping get access to cash for those people who live in remote locations, or who are unable to travel long distances, by enabling transactions for banking customers over Post Office counters. At the same time, we facilitate the ATM transactions. So, I’m a big believer in choice and a big believer that you have to offer a number of solutions so that communities across the UK are provided for.
From your position you get to see and experience a really good view of how payments and financial services has changed and developed over the last decade. As you look forward, what are your hopes for the UK FinTech sector in these coming years?
There is no doubt that the UK is the pioneer and leading innovator in the world of real-time payments. We have developed the technologies, nurtured the skillsets and trailblazed new innovations that are now demanded the world over.
A key reason for Vocalink’s success overseas is that we’ve exported both the experience, the innovations and the talent. So, if I look at my current pipeline, I’ve probably got about fifty-six countries all on the journey of doing faster payments, real time payments. Well we did that eleven years ago in the UK. It has allowed us to continually innovate and build sophisticated real-time payments solutions globally – for example, the RTP® network in the US took the best of our work in the UK, Singapore and Thailand to create one of the world’s most powerful real time payments solutions.
So, I very much see, and I say this to colleagues here, we are a reference site for the rest of the world for new payment innovation and that’s why the UK is an exciting place to work in payments. My hope would be that we continue to be the shining light.