Unpopular opinions on consumer protection: a love story

Written by Leda Glyptis
13th February 2025

At the tail end of last year, I had the pleasure of participating in a NatWest event on the future of payments.

Consumer protection means nothing if it doesn’t apply where the consumer is and when the consumer needs it

We talked about APIs. We talked about open banking. We talked about BaaS. We talked about regulation. A lot. Because there is a lot of regulation. Because regulation matters. Because consumer protection matters.

And, rather unexpectedly, we talked about cash.

Richard Talbott, in fact, shared some research with us about the patterns of cash usage that, I must confess, surprised me.

Although the research confirms some of the things you would expect (vulnerable communities tend to rely on cash more and our reliance on cash overall is reducing), it also found that young people (yes, yes, the digital natives) tend to have a (statistically significant if not overwhelming) preference for cash over older people.

And also a whopping 81% of UK adults use cash for convenience. Not preference, you realise, that number is considerably lower. But convenience.

Who are these people and where do they live? I thought smugly to myself as I read the research sitting pretty in almost entirely cashless London.

Well, dear reader. I was about to find out exactly who those people were.

Because, on an annual Christmas shopping trip with a very dear friend, opting for cash in the name of convenience became a very real thing.

What happened is that we went to a shop, I went to pay first, the transaction went through fine (so it hit the ledger of my bank) and then their payment gateway provider timed out, so the transaction got stuck in limbo. Not settled. Not cancelled. Just there on my account. Not there on theirs.

“Oh, it happens all the time,” they said. “It’s OK, it will sort itself out. Pay again.”

Now.

What actually happened is that the UK has faster payments, so latency matters.

Which means that the latency of all the parts of the payment chain matter.

And if your e-commerce gateway (as was the case with this situation) or your payment initiation provider have decided they don’t need to have the same latency SLAs as the issuers or the banks, then you have transactions that make it all the way through to the end but can’t settle because… latency.

That is what happened.

I knew that. My friend knew that.

The shop assistant didn’t. Neither did her manager. Neither did the person at the other end of the phone when they called their provider. The solution offered by all three was ‘keep tapping your card, not all transactions will go through, it will be fine in the end’.

It was an experience, let me tell you.

Because the proposed solution of keep tapping would mean that someone could be out of pocket for (the amount owed) x (number of times tapped) for an undefined period of time until they sorted themselves out. Which, as it turned out, was seven working days.

Ultimately, the consumer is asked to underwrite the choice of supplier made by the merchant and, in this case, the inadequate technology investment said supplier has made. They are asked to underwrite this solution and they aren’t even aware that is what is happening.

Of course, nobody says any of that because… nobody knows any of that.

The shop assistant and the shopper shouldn’t have to understand payments to buy a new t-shirt.

Or should they?

Because, as I found out because (you know it) they got a lecture on latency whether they wanted one or not… this ‘kept happening’ and people just paid as many times as it took and ‘it all sorts itself out in a week or so’.

I am baffled by the trust people put in the system after it has failed to work the first time and they are literally willing to go in and do the same thing… again… expecting a different outcome, which we already know is the definition of insanity. But let’s not go down that rabbit hole now. Let’s stay on topic.

The fact that incorrect and inaccurate information is offered to the consumer at the point of sale is something we need to lose more sleep over.

We love to talk about consumer choice, but in this case the consumer had no choice. Or at least the consumer already embroiled in the process had no choice. Because my friend walked out of the shop, across the street to the bank and got out… you got it… cold, hard cash to bypass this nonsense. So that’s me told. This is who these people are: us.

And this in so many ways should be the punchline of this story. But it isn’t. Because the issue is not cash. It’s information. Regulation. And consumer protection.

Because my friend watched the rigmarole and opted out: got cash out for convenience and speed.

But I didn’t have that choice, I was already trapped in the Blair Witch Project of transactions.

So how do you deal with that?

So glad you asked.

This part is not going to be comfortable, but the reality is that most people will only be faced with digital payment options, issues and challenges at a point of sale that isn’t supervised in the moment by a representative of a regulated entity. So the person we are meant to protect is talking to someone who is not sworn to protect them, is not equipped to protect them and relies on information coming from vendors, which in this case means consumers have to carry the anxiety of being out of pocket for days when money may be short and when you don’t know and the person speaking to you doesn’t either what your recourse is if all five attempted transactions clear… and her telling you they won’t isn’t convincing even though it’s true… because I know it’s true… but she doesn’t… she is just saying it to keep the line moving.

Consumer protection means nothing if it doesn’t apply where the consumer is and when the consumer needs it.

So.

What am I suggesting?

We need to actually force (yes… I said force… which means I expect regulatory enforcement action to be part of this) all participants in the chain to do two things:

1) Demonstrably invest in the unhappy path.

Because not only was there no option other than ‘keep doing the thing that didn’t work’ offered to me in-store… they actually went so over-eager they cancelled ALL transactions and now they are trying to find a way for me to pay for the goods without physically needing to go into their store to repeat the thing that didn’t work in the first place… or ordering the goods all over again online because, check this out, they can’t not send them to me if we do that. And I will then have to find a way to post them back. Which is a faff.

It will be sorted. But none of this is inevitable.

So.

Unhappy path. Invest in it.

Seriously: there should be repercussions and fines for consumer-facing applications if you can’t demonstrate that there is a way to solve for things not going to plan.

2) Appreciate that, as counter intuitive as it is, the shop assistant needs to know whether ‘we stock this top in red’, ‘this comes in XS’ and ‘what has actually happened when a payment goes wrong’. We always joke and say it’s not the job of the supermarket checkout clerk to understand two-factor authentication or the cashier in a high-street retailer to understand the reasons why a real-time payment may not settle.

Only it is.

Because the way we have designed the payments ecosystem, they are the person standing in front of the customer transacting and being faced with something not going to plan and having no understanding of why that is happening. Not your CTO. Not your digital identity chief advocacy officer. Not your head of compliance. Not the issuer. Not the payments provider.

The shop floor assistant.

They are there when things go wrong and they are the one the customer asks, “What happened?” and “What happens now?” And the fact that they don’t know is not just unacceptable, it is unethical. Because all the answers I was given were actually wrong. And they were wrong because the person giving me answers had never been told the right information. She was not equipped to help, even though this ‘keeps happening’ as she told me. So consumer protection went out the window about seven times in the space of a 20-second conversation, and the only ones winning in the scenario are the suppliers who have sold an under-performing, inadequate gateway to a merchant who didn’t know what questions to ask and didn’t expect to be asked any questions in return.

But I tend to have questions.

It’s a thing.

As is protecting consumers in the moments that matter. Not the moments that are more convenient to regulate.

#LedaWrites

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.