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. Today the Financial Conduct Authority (FCA) has asked for views on the key issues facing the payments sector.
Every year these payment systems process over 7 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, said:
“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 whether consumers are 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.
Notes for editors
- The call for inputs[1] – responses should be sent to [email protected] by 15 April 2014.
- More information on the new regulator[2].
- The new regulator will operate independently of the FCA, with its own board and managing director. The FCA will work closely with the new regulator, and is already looking at a number of ways to promote competition in retail banking and reduce barriers to entry, including a market study into cash-savings[3] and our work on mobile banking[4].
- On 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.