The new areas of work will build upon the successes achieved since the PSR started work and help make sure the PSR continues to understand industry developments, and so continues to promote competition and innovation and ensure the interests of those that use payment systems remain at the heart of what it does.
We have achieved some positive results since we were set up and work in several areas is starting to pay off.
For example, it’s now easier, quicker and cheaper to gain access to payment systems. This year alone will be the most successful year for access, with as many as ten new providers gaining direct access to interbank payments systems; levelling the playing field is essential if we are to have greater competition in retail banking services.
The follow up work from our market review into the ownership and competitiveness of the infrastructure supporting Bacs, FPS, and LINK and the game-changing Final Strategy of the Payments Strategy Forum, will also drive real benefits for users of payment systems.
But, as the payments industry evolves, we must take the time to understand developments to ensure payment systems remain accessible, reliable and secure for all that use them.
This Annual Plan sets out how we are going to do that.’
Alongside its wider work programme, the Annual Plan highlights three particular areas of focus in 2017/18:
- The implications for consumers of a changing payments sector
- The increasing use of payments data
- Changing competitive dynamics
The PSR also confirmed that its budget for 2017/18 will be £12 million.
Working in consumers’ interests
In 2016 the PSR published the findings of its review into authorised push payment scams, concluding that further work was needed to tackle the problem. As well as continuing this work, in 2017/18 the PSR will take a broader look at its role in respect of consumer protection and identify what, if anything, it may need to do in this area.
This will involve looking at ways to help consumers better understand the risks and benefits associated with making everyday payments such as transferring money to a friend, to the more significant transactions such as buying a house.
The PSR will build a clearer picture to understand what consumer protection issues exist now and what issues might arise in future and highlight any regulatory gaps.
The increasing use of payments data
The data associated with payments appears to be becoming increasingly important as its availability and commercial use increases. This may also have implications for consumer protection, particularly in respect of how the information is shared and handled. As a result, the PSR will work on identifying and understanding developing issues as the market continues to evolve.
It will also work with other relevant public bodies to understand the role, if any, we should play alongside other regulators.
Changing competitive dynamics
Rapid innovation in the payments sector, spurred on by the evolution of technology and changing consumer preferences and needs, will help to create a potential for a change in the competitive dynamics of the market.
To this end, the PSR will look to answer a number of questions such as: how the economics of the sector are changing, where competitive advantages may come from in future and the underlying implications for market structure and competition. This work is also important as part of the PSR’s role as a competition authority.
The PSR’s ongoing work programme
The Annual Plan also sets out the details of the PSR’s existing projects. This includes the work of the Payments Strategy Forum and more specifically, its recommendation to create a single payment system operator (PSO) to reduce costs and complexities with multiple PSOs. 2017/18 will also see the PSR publish the final remedies that it believes need to be made to reform the provision of payment systems infrastructure in the UK.
The PSR will also continue its work as the lead UK regulator for the Interchange Fee Regulation, set out how it will exercise its powers to monitor the relevant elements of the second Payment Services Directive (commonly called PSD2), and continue its work looking at contactless mobile payments.
While 2017/18 promises to be a busy and exciting year with significant new areas of work, we will continue to build on the momentum gained last year, such as our work on access, infrastructure provision and the outcomes of the Forum’s final strategy.
Plenty has been achieved, but with so much more in the pipeline I am excited about the next chapter.’
Notes to editors
- Read the Annual Plan and Budget for 2017/18.
- Last year’s Annual Plan and Budget.
- The PSR was incorporated on 1 April 2014 and became fully operational on 1 April 2015.
- The PSR is the regulator and concurrent competition authority for payment systems in the UK and all participants in those payment systems (payment service providers, operators and infrastructure providers to those payment systems).
- The PSR has three statutory objectives:
- to promote effective competition in the markets for payment systems and for services provided by those systems, including between operators, payment service providers and infrastructure providers, in the interest of service-users
- to promote the development of innovation in payment systems, in particular the infrastructure used to operate payment systems, in the interest of service-users
- to ensure that payment systems are operated and developed in a way that considers and promotes the interests of service-users