We’ve published a consultation that sets out a number of changes we are proposing as part of our market review into the ownership and competitiveness of infrastructure provision. 

What are we consulting on?

Our final report into the ownership and competitiveness of the infrastructure that supports the three interbank payment systems - Bacs, Faster Payments Service (FPS) and LINK - found there is no effective competition in the provision of central infrastructure services for these systems.

We believe this is impacting the people and businesses that use payment systems, so we’ve proposed a range of measures to deliver change and improvements for users. 

This consultation sets out our proposed remedies and includes further assessment of the ownership issues identified in our final report. We have produced a factsheet that summarises these proposed remedies which you may find useful.

We welcome feedback on the detailed design of the two remedies outlined below and our assessment that they will be effective and proportionate. We also welcome feedback on our provisional assessment of VocaLink’s ownership in Chapter 5. Specific consultation questions can be found in Chapter 7.

What are the negative consequences of these competition issues on the users of payment services?

We believe that the lack of effective competition is leading to:

  • higher prices
  • less innovative services
  • less pressure on the supplier to be efficient
  • a lower quality of service 

What remedies are we consulting on?

Our final report set out three potential remedies.

This consultation is on the detailed design of two of these remedies:

  • mandating competitive procurement exercises for Bacs, FPS and LINK when the operators of these systems purchase central infrastructure services
  • introducing the ISO 20022 messaging standard in future procurements for Bacs and FPS

Given the proposed MasterCard acquisition of VocaLink, we’re not, at this stage, consulting on the third remedy (divestment remedy) set out in our final report because the proposed acquisition would address the ownership related competition problems identified in our final infrastructure market review.

This transaction is subject to merger approval by the Competition and Markets Authority. However, if the proposed acquisition does not complete, we intend to consult separately on a divestment remedy.  

What happens next?

Please send your comments (in either Word or text-readable PDF versions) by 1 February 2017 to infrastructurereview@psr.org.uk

Or in writing to:

Infrastructure Review Team

Payment Systems Regulator (15th floor)

25 The North Colonnade

Canary Wharf

London E14 5HS

Next steps

Once the consultation has closed, we will consider the responses received and expect to publish our final decision on the remedies in spring 2017. 

We will then if appropriate, issue any remedies.

Additional information

Read annexes 1 & 2 and annex 3 to the consultation.

As part of our work on remedies we asked a consultancy (Europe Economics) to undertake a study on costs and benefits of migration to ISO 20022 in SEPA. 

Read the final report for this market review, published in July 2016.

Read the non-confidential responses (published 13 October 2016) to the final report.

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