Economic Secretary and City Minister Kitty Ussher today announced that the Financial Services Authority will be the UK regulator for the provision of payment services, established by the Payment Services Directive.
Kitty Ussher made the announcement in a speech to Global Consumer Money Transfers conference. The money transfer sector, along with other payment service providers, will become subject to regulation under the Directive, which needs to be implemented in all EU Member States by November 2009. An EU political agreement was reached on the Payment Services Directive earlier this year.
The overarching aim of the Payment Services Directive is to support the Single Market in financial services. Currently, cross-border competition in payments is hampered by differing national standards. The Directive creates a harmonised legal framework for payment services such as direct debits, card payments, and remittances.
The Directive seeks to improve consumer choice by opening up the payments market to greater competition. This is supported by the agreement reached on a new licencing regime for non-bank payment service providers such as money transfer operators, which will allow them to operate throughout the EU.
The details of implementing the provisions of the Payment Services Directive into UK law are now being considered, and the Treasury will publish a consultation document on implementation later this year.
Kitty Ussher said: "We now need to consider how best to implement the Payment Services Directive in the UK and ensure the regime we create is proportionate and risk-based. In consulting on our approach to implementation this autumn we will be looking to support further competition, choice, efficiency and innovation in the payments market, and balance this with ensuring appropriate consumer protection, true to the aims of the Directive."
While the FSA will be the UK regulator for the provision of payment services under the Payment Services Directive, HMRC will retain responsibility for supervising the anti-money laundering requirements on money service businesses, in line with their enhanced supervisory role set out in the Government's Financial Crime Strategy..
Kitty Ussher said: "HMRC are experienced anti-money laundering and counter terrorist financing supervisors. By retaining supervision of money service businesses HMRC will provide continuity for the sector and be able to utilise their enhanced supervisory powers under the Money Laundering Regulations 2007."
The Money Laundering Regulations 2007, which implement the Third Money Laundering Directive, come into effect on 15 December of this year.