Over the last few years the government has been working on a number of actions to ensure that consumers and businesses, as well as the wider economy, benefit to the fullest extent from payments networks. These include:
- setting up the world’s first economic regulator for payment systems – the Payment Systems Regulator (PSR) and bringing UK payment systems under formal regulation
- the PSR overseeing a change in the way the main UK retail payment systems are owned and governed, opening up access, enabling greater competition and innovation in payment services
- the government capping interchange fees and banning surcharging to reduce costs for consumers and businesses
- the PSR’s market review into the supply of card-acquiring services to ensure that the market works well for merchants, and ultimately end users
- the Competition and Markets Authority (CMA) driving forward Open Banking to offer the opportunity for consumers to pay for goods and services in shops and online directly from their accounts, rather than using a debit or credit card
The government is now issuing a Call for Evidence that will look at the following questions:
- To what extent do you consider that the government’s objective that UK payments networks operate for the benefit of end users has been met?
- What do you think industry, regulators and government should do in order to further ensure that UK payments networks operate for the benefit of end users?
- To what extent do you consider the government’s objective for a UK payments industry that promotes and develops new and existing payments networks has been met?
- What do you think industry, regulators and government should do in order to further promote and develop new and existing payments networks?
- To what extent do you consider the government’s objective to facilitate competition by permitting open access to participants or potential participants on reasonable commercial terms has been met?
- Are there further barriers preventing open access to participants or potential participants on reasonable commercial terms?
- What do you think industry, regulators and government should do in order to remove these barriers?
- To what extent do you consider the government’s objective for UK payment systems that are stable, reliable and efficient has been met?
- What do you think industry, regulators and government should do in order to further ensure UK payment systems that are stable, reliable and efficient?
- What is the impact of not having comprehensive scheme rules to deal with how participants should collectively act to resolve disputes and assign liability when a Faster Payment goes wrong?
- Are additional scheme rules needed to ensure opportunities for person-to-business payments over the system can effectively compete with major card schemes? If so, how could scheme rules achieve this?
- Why are payments with a longer clearing cycle still used and what are the barriers to moving these payments to a platform with faster clearing, e.g. Faster Payments?
- What is required to enable Payments Initiation Services to take off in the UK in a way which is safe and secure for the consumer?
- How does the advent of Payment Initiation Services through Open Banking interact with your answer as to whether additional rules are needed as part of Faster Payments? • Question 15:
- Will Open Banking deliver (and go beyond) the developments in account-to-account payments seen internationally? What are the lessons from international experiences that should be adopted in the UK, and what are the costs and benefits of doing so?
- Do you agree with the trends in new service providers and payments chains identified?
- What further trends do you expect to see in payments chains in the next 10 years?
- What opportunities and/or risks do these trends in new service providers and payments chains pose?
- What do you think industry, regulators and government should do in order to realise these opportunities and/ or address these risks?
- Do you think any changes are needed to payments regulation to ensure it keeps pace with the changing technological landscape?
- What further trends do you expect to see in cross-border payments in the next 10 years?
- What do you think industry, regulators and government should do in order to improve the functioning, speed and cost of cross-border payments for consumers taking into account the G20 work?
- Are there other opportunities and risks not captured by the questions elsewhere that you wish to highlight? If so, what do you believe the role is for government, regulators, and industry in responding to them?
The Call for Evidence can be found here
The ACT is preparing a response and if you are interested in sharing your views, please either send your responses to the above questions by email to technical@treasurers.org or call Naresh Aggarwal on 07595 850647. The deadline the ACT is working to prepare its response is September 30.
