Recommendations on Payments Regulation for the Financial Conduct Authority and Payment Systems Regulator: November 2024
Introduction
On 15 November 2024, the UK government published a report containing recommendations on payments regulation for the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR). The report was commissioned by the Treasury and the Bank of England, and was conducted by an independent review panel chaired by Sir John Vickers.
Background
The payments landscape is rapidly evolving, with the emergence of new technologies and business models. This has led to calls for a review of the current regulatory framework to ensure that it is fit for purpose.
Recommendations
The review panel made a number of recommendations, including:
- The FCA and PSR should have a joint objective to promote competition, innovation and consumer protection in the payments market. This would provide a clear and consistent framework for regulation.
- The FCA should have primary responsibility for regulating payment service providers (PSPs). This would include responsibility for authorising and supervising PSPs, and for enforcing the relevant regulations.
- The PSR should have responsibility for regulating payment systems. This would include responsibility for authorising and supervising payment systems, and for setting and enforcing standards for payment systems.
- The FCA and PSR should work closely together to ensure that the regulatory framework is effective and efficient. This would include sharing information, coordinating investigations and enforcement actions, and developing joint policies.
Next Steps
The government will now consider the recommendations of the review panel. It will then publish a consultation paper setting out its proposals for reforming the payments regulatory framework.
Conclusion
The review of payments regulation is a welcome step towards ensuring that the UK payments market is fair, competitive and innovative. The recommendations of the review panel provide a clear and consistent framework for regulation, and will help to protect consumers and promote economic growth.
Additional Information
- The full report of the review panel can be found here.
- The Treasury’s website has more information on the review of payments regulation.
- The FCA’s website has more information on its role in regulating the payments market.
- The PSR’s website has more information on its role in regulating payment systems.
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