The UK’s biggest supermarket chain has responded to criticism by pledging to speed up payments to its suppliers.
Tesco’s chief executive, Dave Lewis, said that from next June the company would ensure that payments to its smallest suppliers that deliver up to £100,000 of products annually went out within 14 days. He also promised a “simpler” payment model for the 2,000 firms that supply Tesco, which include a number of small family-owned businesses.
Medium-sized suppliers providing up to £10m of products per year, will have their accounts settled within 23 days and major suppliers will have to wait no more than 28 days.
The company hopes that the move will improve its reputation after accusations were made that it deliberately delayed payments, employed unacceptable methods in booking commercial income from suppliers and routinely flouted industry standards on payments.
A survey of the country’s internet users finds that over 70% no longer use cash for day-to-day purchases.
The Federal Reserve Banks and The Clearing House develop local market practices to facilitate end-to-end payments tracking for their participants.
The European Banking Authority said that its proposed rules for stronger customer authentication would be relaxed for payments under €10.
A relatively small population and take-up of the latest technologies makes the country a testbed for payment innovation, according to an ANZ Group report.