Unplanned Effects of Modern Payment Methods

One of the unplanned effects of modern payment methods is that we are becoming less aware of the price we pay for things.  As we tap and go through transport turnstiles, and at the many thousands of locations where we use plastic to pay for our coffee, our lunch or whatever, the price of the things we buy has been relegated to the background.  For those fortunate enough to have enough wealth not to account for every penny, these transactions disappear in the plethora of digital noise that surrounds our lives. For those less fortunate, however, it makes the business of managing their money far harder. Cynically, it also allows retailers, transport providers and others to increase their prices without the consumer always being fully aware of the insidious increases.

The primary driver of these changes has been the introduction of contactless payments.  This increasingly successful payment method comes with the expectation that we won’t receive a receipt for the transaction, and, as a direct result, the chance to reflect on the price of individual items purchased has been removed.  A further cause has been the introduction of card on account, one-click shopping services, such as those offered by Amazon and many others.  These distance the buyer from the act of consciously considering the cost of the item and make shopping a therapeutic activity rather than a financial transaction that has to be paid for from available funds.  And the ever growing move to link on-line shopping services to instantly arranged lines of credit, only serves to further separate the act of shopping from its financial consequences.

For those in society able to manage their finances effectively; those happy souls who studiously go through every payment card statement and account for every penny, this situation offers no real threat and many opportunities. But for others, it is a world that offers unaffordable temptations and stealthy price rises.

One way of rebalancing the system would be to ensure that an electronic record of what has been purchased, and, importantly, the price paid – an electronic receipt –  is easily, if not instantly, available to all, weherever and whenever a payment product is used. This would require either a standardised approach that was adopted by all providers, or a collaboration between providers and the agreement to operating a shared, centralised, service.  Collaboration, or standardisation, is needed to protect both the consumer and the merchant from the need to have multiple ways of sending and receiving receipts.  Commercial attempts to deliver e-receipts have struggled to overcome this problem –  and businesses would benefit greatly from an ability to deliver their service from within a standardised, shared environment.

Standardisation should also address the form and design of the core elements of both e- and paper receipts.  For those who do check their receipts against their statements, or for those completing expense claims, the current wide variations in receipt design, and in the presentation of key information, is frustrating and time consuming.  And many receipts contain information that is largely irrelevant to the consumer, unnecessarily consuming paper that simply ends up in landfill sites.

A move to e-receipts on a nationwide basis would save millions of paper-rolls, reduce retailer costs, improve pricing transparency and support money management for all consumers.  It would supress devious price rises and provide an opportunity for innovative businesses to provide a variety of technology based services built on the back of the information flows created.  It may also allow the tax authorities to gain further insight to expenditure, and make it easier to assess tax.

In the past, the UK has been very adept at creating shared infrastructures to support such endeavours.  But whilst Open Banking is designed to address access to accounts, and may offer some support for this idea, it cannot address the need for purchase based information.  Therefore without a specific and common approach based on UK regulation, and changes to the law governing receipts, the benefits of electronic receipts cannot be realised for the country, its merchants, consumers or tax authorities.