A new regulator to oversee UK payment systems will be introduced by April 2015. Payment systems make every payment to or from UK consumers possible, by allowing funds to be transferred between people and businesses. The Financial Conduct Authority (FCA) has asked for views on the key issues facing the payments sector.
Every year these payment systems process over seven billion transactions, worth over £75 trillion. The FCA’s “call for inputs” will help shape the focus of the new regulator’s work.
Martin Wheatley, FCA Chief Executive, says this sector is critical to the economy so it must reflect the needs of people and firms and enjoy their confidence: “We need to know if the sector is as open as it should be to new entrants into the market and are consumers getting the best possible deal?
Competition will be high on the agenda of the new regulator. The largest payment systems are owned and managed by the big banks, but concerns have been raised that the sector lacks transparency and innovation. It also needs to be easier for challenger banks to access these systems and compete with the bigger players.
The Banking Reform Act (2013) created a new independent regulator for payment systems as a subsidiary of the FCA. The new regulator will be fully operational by 1 April 2015 and has three objectives: promoting competition; promoting innovation and ensuring that payment systems operate in the interests of their users.
There are a number of payment systems in use in the UK, and HM Treasury will consult on which payment systems will be overseen by the new regulator later this year.