The Daily Update from John Doyle
Amidst the crisis the regulators are still working on improving and protecting the payments infrastructure. Yesterday I reviewed the FCA plan and today I’m reviewing the PSR plan. Tomorrow I’ll cover the workplan of the UK Regulation Authority.
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PSR Plan Review
The PSR, the newly established regulator for UK payments has published its annual plan for 220/21.
The plan was written before the Covid-19 crisis but subsequent updates do take into account the devastating effect that Covid-19 will have on our industry as well as wider society.
The three core objectives of the plan are:
- Responding to the COVID-19 pandemic and ensuring the UK’s payment systems remain world-leading and deliver good outcomes for all users
- Continuing its work to protect the interests of the people and businesses who rely on payment systems in unprecedented times
- Making sure that everyone can choose to make payments in ways that work for them as the economy, payments markets and individual’s preferences change
The interesting thing here is these objectives mirror the FCA’s objectives which I talked about yesterday. So, harmony reigns.
The highlights of the plan are:
The PSR continue to be concerned about access to cash and are stepping up their activities to protect the ATM network. Cash is vital to many vulnerable people and must be maintained. At the same time, the PSR feel it is important to continue to develop new digital solutions and improve technology. They are guided by the principle that choice of payment methods needs to be clear.
They will focus heavily tis year on changes to the payment infrastructure and a key part of that is the New Payments Architecture (NPA). They see that the introduction of NPA is part of the essential plans that will provide efficient operations and continue to drive down fraud. They have yet to publish their interim report on NPA and so rumours abound as to whether the NPA will cover all schemes, some schemes or just the Faster Payments scheme which seems to be the direction.
Interestingly there’s no detail on who might be selected to run the architecture ‘rails’. Will there be aa single or multiple provider of NPA. But, they are clear they believe the outcomes of NPA will benefit all sectors of society.
Confirmation of Payee (COP) has been effective already in reducing fraud as reported by Lloyds Bank. What is not clear is how many banks have adopted COP. The deadline was 31st March this year, who met the deadline and who did not.
They have given an update on the Card acquiring review project and they hope to publish their report in 2020/21. Look forward to seeing some detail soon.
They have reiterated that the ATM network is vital to helping vulnerable customers and access to cash is important.
However, there focus on digital solutions is also correct as offering customers a choice is very important. Digital solutions can and should be embraced alongside cash.
The PSR was created in the first place by the desire to merge the schemes and provide a single scheme and infrastructure so I was pleased to see the PSR is looking to open access to payment systems. Promoting competition is especially important, so I will be watching progress on this closely. I am very much in favour of the schemes being merged and lowering entry costs to make them more accessible and consequently create more competition.
Preventing fraud is high on the PSRs list and they are making good progress in several areas. It will be good to see more detail as the plan develops. Industry initiatives need to be established with the PSR at the helm.
The PSR discuss their plan to increase their enforcement powers and their teams to support this. That is a good thing as the market needs to be managed properly so there is a level playing field.
The PSR and the FCA yesterday, talked a lot about co-operation between regulators and that is a welcome initiative as we need joined up thinking. Tomorrow I will review the work plan that has been issued by the UKRA who co-ordinate all the regulatory work.
The Payments Business View
This and the FCA make interesting reading. There is clearly an attempt to harmonise objectives and goals and that is to be applauded. I am looking forward to more detail when that comes available.
Both organisations deserve our support and then they will implement changes that we all understand and agree with. The days of imposition by the regulation fraternity are over one hopes, and a more collaborative style is beginning to emerge. The Payments Business will do all it can to support them in their endeavours.
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