Right now, the sector mainly consists of bank controlled monopolies

IFM Correspondent

January 3, 2017: The UK’s Payment Systems Regulator (PSR) has decided to foster a more competitive domestic playing field. PSR has three main objectives — promote competition, promote innovation and ensure that payment systems are developed and operated in the interests of users.

According to Hannah Nixon, Managing Director of the PSR, “The remedies we are putting forward today are another step in our strategy to bring about a once-in-a-generation change to UK payments. This will promote more effective competition and innovation that will help better meet the needs of all users of payment systems – be they consumers, small businesses or banks.”

The size of the payment system industry in the UK is £75 trillion and it mainly consists of bank controlled monopolies. But this is what PSR is seeking to change by introducing an environment that is conducive for domestic players and competition.

They aim is to improve the ability of entrants to gain direct access to payment systems by requiring open, fair access terms and conditions and regular reporting. Ultimately, it would like to support new entrants in the market by providing them with the required infrastructure.

The PSR is also pursuing the adoption of common payments messaging standards, like ISO 20022, for the payment service operators of Bacs and the Faster Payments Service (FPS). The authority is also looking at how to impose requirements that would promote competition in the area of procurement by Bacs, FPS and LINK when they’re buying infrastructure services from companies like VocaLink.

The PSR believes that the competitive pressure would provide impetus for service providers to offer better as well as efficient services to users.