The Payments Systems Regulator (PSR) has set out plans to investigate high card fees and explore ways to encourage more competitive deals for merchants.

Setting out its plans for 2022/23, the payments watchdog said that one of its priorities would be increase competition between payment systems, including unlocking the potential of account-to-account payments and encouraging better deals for merchants by comparing and switching advisers.

Account-to-account payments could provide ‘credible alternatives’ to card payments in retail, the regulator said.

It comes after card schemes have come under increasing pressure from retailers and merchants including Amazon to control rising fees.

The PSR is also overseeing Pay.UK’s work to deliver the New Payments Architecture (NPA), ensuring it sufficiently allows payment service providers to compete for customers.

The regulator said another focus for this year would be using its powers to ensure that more people and businesses have the added security of the name-checking service Confirmation of Payee (CoP).

It is also taking steps now to prepare for proposed legislative changes that should allow the PSR to act against rising levels of Authorised Push Payment (APP) fraud.

In addition, the PSR said it is currently providing its input on the regulatory framework for potential new payment systems, such as cryptoasset-based options.

“These new systems have the potential to increase choice and add to competition,” the PSR added.

The PSR also foresees disruption from the impact of global events on the cost of living for consumers and businesses, which they said “may affect what people need from payments to support their daily lives.”

Commenting on the PSR’s priorities for the year, Chris Hemsley, managing director at the PSR, said: “Over the past year we’ve taken bold action to bring change in payments – and our work has made improvements for people and businesses across the UK.

“We’ll continue to act swiftly and decisively to make sure that consumers and businesses are protected, and to promote innovation and competition where it counts.”
He added: “We have some big tasks ahead of us, including taking further steps to protect people against APP fraud and encouraging greater competition in the cards market.”

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