We reported on the 15th March that the Government was to hand regulator powers over key players to pave way for new payment methods for customers and more banking competition, in this post
A new watchdog set up to regulate Britain’s £75tn a year payments industry plans to take control of the money transfer systems from the big high street banks. The Payment Systems Regulator (PSR), which launch on Wednesday 1st April, promises to change the way that payments operate in the UK.
The largest banks, such as Barclays and Royal Bank of Scotland, own and control the main systems.
“We want to break open the control of payment systems, so it’s not just the big banks that control them who can use them,”
“We need to make sure all those who use them or need access can have a real voice in the way these things are controlled — whether it’s a challenger bank, or a payment innovator.” Said Hannah Nixon to the Financial Times.
“Our approach will bring change to the industry, injecting competition and innovation where it is needed most”
The regulator will work on allowing faster and fairer direct access to the systems and will require incumbent banks to subscribe to a code of conduct making the terms of gaining access clearer. If the banks do not make changes to allow more open access, the regulator has the power to intervene.
- A new and inclusive strategy setting process that really involves users of these systems for the first time. This will be done by setting up a Payments Strategy Forum to develop a long-term vision for how payment systems should develop and identify priority areas for the industry to work together where appropriate to deliver this vision.
- Increasing transparency around how decisions are made, and who is making them, We will shine a light on the control and governance of payment systems, challenge payment system operators to explain how they have listened to people and organisations that use payment systems, and check that operators are really taking payment systems in a direction that meets people’s needs.
- Improving the way people and businesses gain access to a payment system – whether directly or indirectly – to be clearer and fairer and in a way that fosters innovative and competitive solutions for customers using payment systems.
As well as confirming its final policy, the PSR published draft terms of reference for two market reviews and announced a card payment systems programme of work.