UK payments industry warns government regulatory overhaul more ‘reshuffle than reform’

Earlier this year, the government outlined plans to kill off the PSR – which looks after payment systems like Faster Payments and the major card schemes – with most of its work consolidated into the Financial Conduct Authority, making it easier for firms to deal with one port of call.

The move was part of a wider National Payments Vision, designed to cut through the “regulatory congestion” facing the sector to deliver a world-leading ecosystem based on next generation technology that delivers economic growth.

At the time, the Payments Association welcomed the decision to close the PSR, with its director of policy and government regulation, Riccardo Tordera-Ricchi, saying the regulator “sealed its own fate” and that “it’s about time a bold decision was made”.

However, responding to a government consultation paper on the change, the association has warned that the plans for a post-PSR landscape “risk jeopardising UK payments reform”.

Saying that it strongly supports the National Payments Vision, the association says its backing for the change in regulatory oversight is conditional on a clear delineation of the roles of the FCA and the Bank of England, credible regulatory burden reduction, protection of statutory fair access, and a coherent competition remit.

Tordera-Ricchi says: “Our members stress the need for flexible, proportionate supervisory tools without duplicative rules or directions. Concerns remain about who will have clear responsibility for competition oversight in the payments market, with participants keen for greater clarity on this point.

“In addition, stakeholders continue to highlight ambiguity around the respective roles and responsibilities of the FCA and the Bank of England, calling for these to be clearly defined and communicated.”