Creating a more competitive marketplace is key

One of our key aims is to promote effective competition in the payment systems industry we regulate.

We want to have payment systems that are open, transparent and easy to access.  This will drive increased competition which will benefit everyone who uses payment systems.

As a new regulator we will keep our policies under review to ensure they have the effect we intended and adjust our policies if needed. 

Regulatory directions to improve markets

Our first important action to improve the operation of the payment systems market has been to issue a number of important directions which are set out in our Policy Statement.

These are aimed at improving the ability of entrants to gain direct access to payment systems by requiring open, fair access terms and conditions and regular reporting.

To improve the ability of entrants to gain indirect access we require sponsor banks who provide such services to publish their terms and conditions. This will make it easier for payment service providers to assess their indirect access options, strengthen their bargaining power and compete more effectively in the provision of services.

Leniency arrangements in the regulated sectors 

The Payment Systems Regulator (PSR) is a concurrent competition regulator with the powers to enforce competition law in relation to participation in payments systems. Parties who come forward with information on cartel activity may be eligible for reduced penalties under the leniency regime. 

We stated in our CA98 guidance that we would expect leniency applications to be made directly to the CMA.

To protect the integrity of the leniency regime, we have now agreed with other concurrent regulators that the CMA should act as a single port of call for all leniency applications. We believe this position will provide further certainty and transparency for leniency applicants and ensure leniency is granted in a fair and consistent manner.

The CMA conducted a consultation on arrangements for the handling of leniency applications in UK regulated sectors and has published a report outlining stakeholder responses, which were in favour of the approach.  

Please see the CMA’s website for further information, or, for leniency enquiries or applications, call the CMA’s leniency number: 020 3738 6833.

Competition Director Disqualification

The CMA has published its revised Competition Disqualification Orders (CDO) Guidance. A link can be found here. The PSR will have regard to the CMA CDO Guidance where appropriate.

Market reviews

Another key action was to launch two detailed market reviews that examined some of the key aspects of payment systems markets. 

Indirect access market review

Our market review into the provision of indirect access was aimed at gathering detailed evidence to determine whether current indirect access arrangements promote competition in the interests of those who use payment services or whether changes are needed.

Payments infrastructure market review

Our market review into the ownership and competitiveness of payments infrastructure examined whether existing arrangements are delivering good results or whether changes are needed.

Payment cards

We are also looking closely at the payment cards market to ensure it’s operating in the best interests of users of payment card systems.

Our programme of work on cards is driven by new legislation that has been introduced at European level. The EU Interchange Fee Regulation (IFR) sets new caps on interchange fees and new requirements on card systems in Europe.  We expect to be given the role of monitoring and enforcing the IFR.

Our work will look at how the IFR may apply in the UK and interact with other card fees. We will develop our framework for monitoring compliance with the IFR, including the business rules being imposed on card systems.

Our programme of work will also explore other concerns our stakeholders have about card systems including transparency, governance and access.

We will determine if we need to take action, including whether or not to apply our directions about service-user interests and transparency of card systems.

Interchange fees and cards programme of work