HM Treasury Requests Comment on ‘Payment System’ Designation (Oct. 14, 2014)
Major credit and debit card providers in the U.K. are among the main “payment systems” the government is proposing to bring under the purview of the new Payment Systems Regulator (PSR), beginning next April. The PSR, which was created under the Financial Services (Banking Reform) Act 2013, will be a “powerful new competition-focused, economic regulator for retail payment systems in the U.K.,” according to the government.
HM Treasury today released a consultation paper describing which payment systems it proposes to designate for regulation by the new PSR, including Visa and MasterCard, as well as the main interbank systems—Bacs, CHAPS, Faster Payments, Link and the check clearing system—and explained its reasons for the designations. For example, 92 percent of credit and charge card transactions and 100 percent of debit card transactions in Britain are made through Visa or MasterCard, and the main interbank payment systems cleared 7.3 billion items, worth more than £75.7 billion (US$120.5 billion) last year. Economic Secretary to the Treasury Andrea Leadsom says the proposals are intended to increase competition and give new players freedom to challenge the big banks without unfair barriers.
HM Treasury will accept responses to its proposals for the next four weeks, after which it will make its final decision. Any designation orders will be effective by April 1 2015, at which time the PSR will assume responsibility for regulating the designated payment systems. Comments may be emailed to [email protected] or mailed to Payments Consultation, Banking & Credit Team, Floor 1, Red, HM Treasury, 1 Horse Guards Road
London SW1A 2HQ.
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