The PAYTECH Book

It’s the Ecosystem, Stupid! Keeping Ahead in a Payments Ecosystem

By Simon Hanson

Head of Public Affairs, BACS

Payments underpin the UK economy and ensure our competitiveness internationally. It’s generally accepted that the UK enjoys one of the most technically advanced and secure payments ecosystems in the world. But what is required to make sure this leadership position is maintained? And what is the future for the UK’s payments ecosystem?

What is a Payments Ecosystem?

Broadly defined, a business ecosystem is a network of related and interlinked businesses that interact with each other to supply complementing components of the value proposition offered to prospective customers.

So, an ecosystem is the network of organizations – including suppliers, distributors, customers, competitors, government agencies, and so on – involved in the delivery of a specific product or service through both competition and cooperation, as with every ecosystem.

Classic ecosystem theory suggests that each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive, as in a biological ecosystem.

And therein is the problem. An ecosystem is a closed system, clearly defined and governed by rules and laws. And as it is in an ecosystem’s very nature to be stable and secure, it supports its constituents in a networked value chain, making access to new members difficult unless they ...