What the U.K.’s New Payments Regulator Wants (Nov. 25, 2014)
Payments industry participants are getting a taste of what compliance might be like under its new regulator the Payment Systems Regulator (PSR). In a recently published consultation paper, the PSR outlined several proposals it says will promote competition and innovation and ensure that payment systems are developed and operated in the interests of service-users, such as consumers, businesses and government departments.
The PSR intends to open up the payments industry, “making it easier for a wider range of parties to access payment systems and compete and innovate around them,” according to Hannah Nixon, PSR managing director. The PSR was incorporated earlier this year and will become fully operational in April 2015. The PSR is a subsidiary of the Financial Conduct Authority (FCA), but it’s an independent economic regulator with its own objectives and governance. “We propose to take control of the industry strategy-developing and -setting process to increase the pace of change. And we will ensure the voice of service-users is more appropriately represented throughout decision-making processes,” Nixon wrote in the consultation paper.
The PSR will have some specific new powers, previously out of the scope of any U.K. regulators, such as the power to regulate card schemes and infrastructure providers, according to Prepaid International Forum (PIF). The PSR also will have the power to require established networks to allow third-party access to their systems, which would make it easier for smaller players and and new entrants to access essential payments systems; alter commercial agreements related to designated systems, including service levels, fees and charges; and require owners of payment systems to sell their interests in them, subject to certain conditions and approval from HM Treasury.
“The ability of the PSR to intervene in areas such as ownership of U.K. payment systems, for example, stems from Her Majesty’s Treasury’s 2013 consultation, Opening up U.K. Payments, which identified a number of issues, including the reliance of smaller players and new entrants having to seek access to systems jointly owned by their major competitors,” a PIF spokesperson tells Paybefore. “For nonbanks, other PSPs and new entrants, the PSR could be a powerful ally given that one of its objectives is to ensure competition is working, innovative and moving forward,” he adds.
Industry participants have until 5 p.m., Jan. 12, 2015, to comment on the PSR’s policy proposals. Comments can be emailed to [email protected], or sent to Payment Systems Regulator, Consultation Response Team, 25 The North Colonnade, Canary Wharf, London E14 5HS.
“PIF welcomes the PSR’s proposal to lead on the strategy-setting process by launching a new forum for industry participants,” the PIF spokesperson says. “If effective, the [proposal] would give smaller players a voice in the strategy-setting process, he suggests.
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