The UK’s new Payment Systems Regulator (PSR) has issued proposals for regulating the £75 trillion industry through a package of measures that aim to promote innovation and competition while providing fairer access to payment systems.
The PSR said that it plans to create a Payment Strategy Forum with broad stakeholder representation to chart the future direction of new payments initiatives. It will also undertake two market reviews to assess the ownership and competitiveness of the current UK infrastructure and look at how indirect access is provided.
“The systems we have today have been developed incrementally over time by the major banks,” said Hannah Nixon, managing director of the PSR. “So while they are relatively resilient, they are often treated as back office functions. Competition is limited, decision making opaque, and this is stifling innovation. This has to change.”
The PSR will regulate the largest and most important payment systems when it opens for business next April. HM Treasury is currently consulting which systems to include and has proposed the main interbank payment systems: Bacs (formerly Bankers’ Automated Clearing Services), Clearing House Automated Payment System (Chaps), Faster Payments, Link, Cheque and Credit Clearing, Northern Ireland Cheque Clearing, and the UK’s two major card systems, MasterCard and Visa.
The watchdog will have the power to carry out enforcement investigations, issue penalties and censures, and compel operators to take remedial action. The PSR will also handle commercial disputes regarding access to payment systems or fees and charges relating to services provided by them. It also has the power to force a firm to sell its interests in an operator.
The proposed measures are open for consultation until 12 January 2015.
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