PSR launches new strategy setting out key priorities over next five years
The Payment Systems Regulator (PSR) has today published its new strategy, setting out its priorities and what it aims to achieve over the next five years.
The strategy recognises areas where payments markets and systems are working effectively, but also highlights where more work is needed. It brings together the regulator’s ideas for how payment systems and services should adapt for the future and focuses on the PSR’s core role – to protect the interests of people and businesses, and to promote effective competition and innovation in payments.
Chris Hemsley, the PSR’s Managing Director, said: “Payments are an essential part of daily life and it’s the PSR’s job to ensure that the systems underpinning them work well for everybody. Our new strategy sets out the priorities that will guide our work over the next five years.
“We will focus more on improving competition between payment systems, not just competition within payment systems. This is important because we know that the future of retail payments is becoming increasingly about digital payments, most of which are currently made using card payment systems.
“That’s why a key priority is to unlock the potential of account to account payments to provide credible alternatives to card payments – which are used for billions of pounds worth of retail payments. Our work to boost competition will drive innovation and improve service quality, while helping ensure people and businesses benefit and stay protected.”
The PSR’s strategic priorities
The PSR’s final strategy identifies four strategic priorities for the next five years. These are:
- Ensure users have continued access to the payment services they rely on, and support a choice of payment options.
- Ensure users are sufficiently protected when using the UK’s payment systems.
- Promote competition between UK payment systems and the markets supported by them; protecting users where that competition is not sufficient.
- Act to ensure the interbank systems provide the infrastructure, rules and incentives that foster innovation and competition in payments.
The strategy also describes the outcomes the PSR wants to see in the payments sector, as well as how it will measure progress towards achieving them.
How the PSR has responded to feedback
This final strategy has not significantly changed from the document consulted on last year, but the responses have helped identify some areas to amend or clarify. For example, the PSR has emphasised the importance of near-term outcomes as well as longer-term ones. In practical terms this clarifies that, as the regulator works to develop competition, it may need to act to protect users until competition has time to take effect. Linked to this, we have recently announced new work to examine card scheme fees and cross-border interchange fees, including considering whether shorter-term measures would be appropriate until we develop and implement any longer-term measures to introduce more competition.
The PSR has also adjusted its fourth priority to better reflect the changes taking place now and in the future to UK interbank payments. This makes clear that as the regulator works towards good outcomes for all interbank payments, this includes those initiated through Open Banking services.
How to find out more and get involved
As well as the full document, the PSR has also created a shorter summary version of the strategy which will help people glean the key points at a glance.
The regulator will talk to stakeholders about key areas in the new strategy and hear their views.
Chris Hemsley added: “This is an ambitious and exciting strategy. We are uniquely placed to make sure that payment systems can be used with confidence and are fit and sustainable for the future. As the economic regulator of payment systems, this is our core purpose.”
The strategy sets the PSR’s vision for the next five years; the regulator will publish its Annual Plan in March 2022 which will detail the regulator’s work plan for the year.