PSR calls for more competition in payments

PSR calls for more competition in payments

The UK needs more competition in its retail payments infrastructure, writes Paybefore, Banking Technology‘s sister publication. That’s the conclusion of a new report from the country’s Payment Systems Regulator (PSR).

That infrastructure enables the clearing and settlement of payments, and the transfer of funds. “The regulator found there is no effective competition in the provision of central infrastructure for the main UK retail payment systems – Bacs, Faster Payments and LINK,” the PSR says.

The regulator proposed two remedies to inject more competition into the system:

  • To undertake a competitive procurement process for future central infrastructure contracts. This will ensure fair, open and transparent procurement of central payment systems infrastructure and will enable new technology providers to enter the market and drive new and innovative products and services.
  • To adopt a common international messaging standard for Bacs and Faster Payments to lower barriers and encourage new entrants to the market.

The UK payments industry should immediately start implementing those reforms, with the goal of bringing benefits to consumers by 2020, according to the regulator. Work has already started: Faster Payments already has adopted common messaging standards, the PSR says.

“These remedies are another step forward in our strategy to bring about a once-in-a-generation change to UK payments,” states Hannah Nixon, managing director of the PSR. “This work will remove barriers to entry, create a competitive procurement process and drive innovation to help meet the needs of all users of payment systems – be they consumers, small businesses, or banks.”

  • Chris Brown 27 June, 2017 at 1820

    It’s great that the PSR would like to make UK payments more competitive, but if we really want to create competition we should set up a system that allows banks and other financial institutions to communicate with, and compete with, each other directly. Without the need of any central infrastructure or 3rd party networks.

    We’ve had some thoughts on this idea [link removed]

  • Post a comment

    Threaded commenting powered by interconnect/it code.