The UK's new Payment Systems Regulator (PSR) has set out its plans to regulate the £75 trillion industry via a package of measures intended to promote innovation and competition and provide fairer access to payment systems.
The PSR says it intends 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 infrastructure and look at how indirect access is provided.
Hannah Nixon, managing director of the PSR, says: "The systems we have today have been developed incrementally over time by the major banks. 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 will regulate the largest and most important payment systems when its opens for business in April 2015. HM Treasury is currently consulting which systems to include and has proposed the main interbank payment systems: Bacs, Chaps, Faster Payments, Link, Cheque and Credit Clearing, Northern Ireland Cheque Clearing, and the two largest card systems in the UK, 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.
Open for consultation until 12 January 2015, the full package of measures proposed by the regulator can be found here