New regulation of payment systems revealed
The recently formed Payment Systems Regulator (PSR) has revealed how it plans to regulate the payments industry when it takes over in April next year.
It is hoped that the role of the PSR will help to increase competition within the sector, promote the use of technology and ensure payment systems are operated in a way that reflects the interest of users.
The sector is worth around £75 trillion and it is hoped that the PSR involvement, as well as initiatives from the Financial Conduct Authority and Competition and Markets Authority, will improve the UK banking industry.
Consultation on the new plans will last until January next year and the measures to be discussed include opening up the ownership, control and governance of payment systems. The proposals will also look at various ways of increasing transparency.
Hannah Nixon, managing director of the PSR, explained in 2013 that more than 21 billion financial transactions were made via payment systems and it is a key part of day-to-day activity.
She added: “It’s vital, therefore, for the UK to have world-class payment systems. 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.”
Ms Nixon added that the introduction of such factors would play an important role in increasing consumer confidence and ensuring the UK payments industry remains at the cutting edge of technology.
The PSR will conduct two market reviews by April 2015 to look at the ownership and competitiveness of the current infrastructure and how indirect access to structures is given.
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