PACNET WORLD PAYMENTS GUIDE United Kingdom

United KingdomPACNET WORLD PAYMENTS GUIDE

Pac NetS E R V I C E S L T D

IntroductionThe world is a big place. There are more than 7 billion people living in 196 countries across the globe – and we’re more connected than at anytime in history. The digital age has ushered in an unprecedented era of access and opportunity. As markets expand, merchants must navigate the complex intricacies of currency, regulation and customer preference associated with each individual country.

The PacNet World Payments Guide is the comprehensive resource for international merchants, containing all pertinent banking and financial information for each country and each region, designed to help businesses expand their markets across the world.

The United Kingdomboasts the 5th largestconsumer marketin the world.

Comprised of the countries of England, Scotland, Wales and Northern Ireland, the United Kingdom (UK) boasts the 5th largest consumer market in the world, with household expenditures in the top 10 globally. With a stable economy and an increasingly diverse population, the United Kingdom is an attractive market with emerging opportunities for merchants – particularly ecommerce merchants. The UK boasts the highest percentage of ecommerce sales in Europe (more than 30 percent) and recent government figures suggest ecommerce sales are approaching 500 million Pounds sterling annually. International ecommerce merchants who operate in the United States, Australia, Canada and similar markets can easily replicate their existing ecommerce businesses in the UK. In order to successfully market to the United Kingdom, merchants must navigate the intricacies and regulations of the UK’s legal and financial systems. The following guide provides basic facts and considerations for merchants and marketers seeking to conduct business in the United Kingdom.

PacNet World Payments Guide: United Kingdom PacNet Services Ltd. | pacnetservices.com4

OVERVIEW

Country

Population

Currency

Denominations (Paper)

Continent

Language

Denominations (Coins*)

United Kingdom (UK)

64 million

Pounds Sterling (GBP)

£5, £10, £20, £50

Europe

English

1p, 2p, 5p, 10p, 50p, £1

and £2

* Accu-Rate Corp can purchase CAD coin at a slight discount/handling charge. It may be used without discount to purchase other currencies

Banking SystemThe UK banking system is dominated by a few extremely large institutions, including Royal Bank of Scotland, Barclays, Lloyds TSB, HBOS and HSBC. Despite lingering issues related to the 2008 global financial crisis – and a damaged public image stemming from high profile scandals – the UK’s banking system is on solid footing from a global standpoint. The UK boasts roughly 70,000 automated teller machines (ATMs), with more than

INSTITUTION


100 million enabled cards in circulation. Though most consumers utilize electronic banking, paper cheques remain viable.

Those wishing to sell and market in the United Kingdom must be cognizant of the various regulatory agency policies which are relatively strict, often enforced – and in a state of rapid and continuous change. Direct marketers should pay close attention to the rules and regulations of the following institutions:

Additional Regulatory Information

Consumer protection also falls under the objectives of the Financial Conduct Authority, which replaced the Financial Services Authority in April 2013.

As a member of the European Union (EU), the UK has adopted various EU consumer protection regulations.

The PacNet Group maintains relationships with legal counselors specializing in UK direct marketing law to help our clients avoid liability issues in direct marketing efforts. Marketers must consider all regulations to avoid prosecution and successfully conduct business.

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REGULATORY ENVIRONMENT

The Competition Commission

Responsible for the investigation and regulation of mergers, markets and major industries.

The Food Standards Agency (FSA)

Regulates food products and dietary supplements, and sets rules for labelling, packaging and sales of these products.

The Information Commissioner’s Office (ICO)

An independent public body tasked with protecting personal information and promoting public access to official information. The ICO enforces the Data Protection Act, privacy and electronic communications regulations, the Freedom of Information Act and environmental information regulations.

The Office of FairTrading (OFT)

The UK’s competition and consumer authority, responsible with ensuring fair trade. The OFT can intervene in cases of non-compliance.

The Advertising Standards Authority (ASA)

An independent agency tasked with regulating advertising, sales promotions and direct marketing.


Consumers in the UK pay for goods in a variety of ways including cash, cheques credit/debit cards and elec-tronic cheques. Nearly 75 percent of all purchases in the UK are made via debit and credit cards, with daily purchases nearing £1.5 billion. The use of “contactless cards”, which allow consumers to make purchases without entering a PIN, are on the rise.

The PacNet Group offers full service payment and check clearing services in the UK, including:

PACNET TRANSACTION SERVICES

PAYMENT VALIDITY PERIODS

ChequesCheques are legally valid for

six months. However, cheques older than six months are

often cashed without issue.

Bank DraftsUK bank drafts do not expire.

Postal OrdersLike cheques, are legally valid for six months, but can often

be cashed far past their expiration date.

Inbound Bank Transfers

Company dedicated accounts can be opened in the name of PacNet Services Ltd. Re: client name, with a maximum transaction value of GBP 9,999.99. Previous day reporting is available in RAVEN format. In order to send payments correctly, customers must provide the following information: the bank name, address, sort code, account number, account name and a reference number no longer than 15 characters.

Unpaid Items and Representation

PacNet returns unpaid items (non sufficient funds, closed accounts, drawer deceased, fraudulent items, etc.) to the depositing agency by post. PacNet offers representation for timed deposits to maximize the likelihood of collection, fora fee equaling 20 percent of item value.

Outbound Bank Transfers

PacNet Services offices and Accu-Rate Corp. offer wire transfers in GBP and other hard currencies with a typical delivery time of one business day. Currency of recipient funds are governed by the receiver’s account. To initiate a wire transfer to the UK, the payee’s name, address, IBAN, SWIFT code, bank branch name and address are required.


Special Rule Cheque Clearing

Many UK, Gibraltar, Guernsey, IOM and Jersey residents hold Euro accounts and issue cheques drawn from them. The UK has a rudimen-tary Euro clearing system, and PacNet offices accept Euro cheques, subject to a EUR 10 processing fee.

Cheque Issue

Pounds sterling cheques are available from Chexx Inc. for bulk issuance of outbound payments. Individual foreign exchange transactions may also be processed through Accu-Rate Corp.

Cash Services

Cash is accepted at PacNet Services offices, Accu-Rate Corp., and is also available for purchase from Accu-Rate Corp.

Cheque Clearing Collection

A small number of residents hold US Dollar accounts in the UK, and occasionally issue cheques on them. However, there is no USD clearing system in the UK and such cheques are considered collection items. It is not uncommon for UK residents to alter the currency on cheques – particularly to US Dollars. Many foreign residents make payments to our clients with foreign currency drafts drawn on UK banks. PacNet accepts such items on a collection basis, crediting the client on receipt of value, for a collection fee of EUR 30 per item.

Direct Debit Services

Direct debit is a common method of recurring payments in the UK. Authorisation can be given on paper, on the Internet or by phone – provided the payer is the sole account holder. If not, a paper mandate must be signed. In order to offer this payment method, merchants must apply for a Service User Number (SUN). PacNet provides direct debit services – managing paperwork and technical details, including the procurement of a SUN within six weeks – to help merchants navigate the strict UK direct debit process.

Raven Online

PacNet’s full-service online transaction management system allows merchants to view activity across all accounts, including: payments, credits, returns, etc. Credits may take up to two business days to reach the beneficiary account. Debit transactions may take up to five business days to complete.

Air Transport Services

PacNet Air offers direct, luxury private transportation to over 100 UK airports. Flying time to most English and Welsh destinations is approximately one hour, with a maximum of two hours from Irish departure points to the most remote Scottish islands.


CONCLUSION

The United Kingdom is rife with business opportunities. Changing dynamics and growing diversity have opened up markets that did not previously exist. With the right strategies and information, merchants and marketers can capitalize on this vibrant market. The PacNet Group has extensive experience in international transaction services and provides merchants with the tools and systems needed to achieve international success. Contact a PacNet representative today to learn more.

General Cheque Clearing

PacNet offices provide facilities to accept and negotiate GBP cheques and can facilitate payment to third parties. Postal orders are accepted as well.

UK Specific Payment Systems

In 2009 UK banks jointly introduced Faster Payments to replace the existing CHAPS payments system. While the service level agreement for Faster Payments is expressed in hours, payments originated electronically by bank customers typically are cleared into recipient UK bank accounts within 15 to 20 seconds. PacNet Services offices are originators of Faster Payments and can offer low cost, high speed transfers to approximately 98 percent of all UK bank accounts. Our software is designed to automatically convert transfers from Faster Payment ineligible accounts to CHAPS – usually with next day credit.

Credit Card Processing

PacNet offers full, unrestricted credit card processing and refunds in GBP, with the vendor name appearing on cardholder statements.

Pac NetS E R V I C E S L T D

PacNet Services, founded in 1994 by a team of international banking experts, is the leading provider of international payment processing services to the direct response industry. PacNet helps companies of all sizes execute global commerce with innovative payment systems and services.

To learn more about how PacNet can help you navigate complex international commerce issues, contact us for a free consultation today.

© Copyright 2016, PacNet Services Ltd.

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Contact us for a risk-free consultation today. We are committed to making international payment processing a convenient and cost-effective part of your operations.

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PACNET WORLD PAYMENTS GUIDE United Kingdom