The Payment Systems Regulator (PSR) has published its annual report and accounts for 2020/21, which sets out its achievements over the past financial year.
In 2020/21, the PSR addressed immediate issues in the payments market while also making progress towards longer-term improvements which benefit everyone.
This year, the PSR has:
- Fought payment fraud by overseeing the introduction and expansion of a new Confirmation of Payee service aimed at preventing scams and improving security in interbank payments (when a payment is made from one bank account to another)
- Protected access to cash by working with industry and other authorities, ensuring people could continue accessing their cash throughout the pandemic and beyond.
- Carried out effective enforcement by investigating potential cartel behaviour in the prepaid cards market, putting a stop to harmful practices affecting vulnerable members of society.
- Kept the UK’s new payment system on track by identifying risks to the industry’s delivery of the UK’s New Payments Architecture, and intervened to reset the programme so it can provide better services for people making payments.
- Worked to improve card-acquiring services by carrying out a market review following concerns that the supply of this vital part of the card payments process may not be working well for merchants – and, ultimately, consumers.
- Focused on the future by engaging with a wide range of stakeholders as it developed its future strategy - focusing on outcomes that will help make sure payment systems continue to work well for everybody.
Chris Hemsley, Managing Director of the Payment Systems Regulator, said:
‘I’m incredibly proud of the way my colleagues have responded to the challenges they faced this year and the amount of vital work we, as a team, have been able to deliver.
‘We have kept our focus on our important work and adapted our ways of working to continue preventing fraud, protecting access to cash and stepping in where we see anti-competitive behaviour. This was particularly important at a time when many people have become more vulnerable.
‘We will continue to bring our payments knowledge together with our policy-making and legal analysis to make a real difference to how payments support people and businesses.’
Key projects in 2020/21
The regulator has continued to work with industry and consumer groups on cash reform. This was especially important during lockdowns, as the PSR’s work helped people get their cash when access was severely limited.
The PSR also made sure the six biggest banking groups launched the Confirmation of Payee service to protect consumers, and other users of payment systems from payment scams.
The PSR took decisive action and intervened in Pay.UK’s development of the new payments architecture when it saw that the long-term benefits could be in jeopardy. The regulator’s work will help make sure Pay.UK develops this new payment system in a way that promotes effective competition and innovation, giving people more security and choice in interbank payments.
It also announced a settlement with three parties in its investigation into the prepaid cards market; three parties have already agreed to pay fines of over £32 million if the PSR concludes that they infringed competition law.
With an increased focus on the longer term, the regulator started discussions with a variety of different groups – industry participants, businesses and consumer groups – about its strategy for the next five years. Starting this discussion remotely saw an evolution in the way the PSR engaged with people. Video presentations, webinars and blogs formed the basis of a ‘digital-first’ approach which bolstered the quality and volume of the feedback the PSR received.
With an eye on the future, the PSR is also exploring the role that interbank payments could play in providing more choice to businesses and consumers as well as looking in detail at cryptocurrencies.
Throughout a testing year, the PSR has continued to build its capability and skills. As a specialist regulator, the PSR was able to keep its focus on payments, address key issues and long-term reforms during the pandemic, to make a difference.
The regulator has focussed on ensuring that it has the right mix of payments and regulatory specialist knowledge, as well as economic and legal skills.