The Payment Systems Regulator (PSR) has published a proposed five-year strategy, which aims to ensure payments and payment systems “work well for everybody.”

The new strategy hopes to enable fairer competition and access to payments.

The payments watchdog said that the approach will protect what’s working well but change what isn’t, laying the foundation for new products, ways to pay, and new payment systems.

“Because payments are an essential part of daily life and a vital element in the UK economy, everybody should have a fair choice about how they make and receive them - and be protected when doing so,” said Chris Hemsley, PSR managing director. “Our new strategy sets out how we are aiming to make this happen.”

Hemsley said that the regulator will continue to focus on promoting effective competition between the companies that offer payment services to people and businesses – including banks and building societies.

“But we will increasingly focus on how to make sure that the different payment systems themselves compete with each other: the current card systems; the existing and new ‘interbank’ systems; and any new payment systems that launch in the future,” he added.
“With healthy competition at each level comes new and exciting innovations, more choice for consumers and merchants, and possible savings for all of us in the products and services we buy.”

The PSR said that the strategy has been informed by extensive engagement with stakeholders and its own observations since it began work in March 2015.

The PSR has identified four strategic outcomes that it wants to help bring about in the next five years:

• Priority 1: Ensure users have continued access to the payment services they rely upon and support effective choice of alternative payment options.
• Priority 2: Ensure users are sufficiently protected when using the UK's payment systems, now and in the future.
• Priority 3: Promote competition in markets and protect users where that competition is not sufficient, including a) between payment systems within the UK and b) in the markets supported by them.
• Priority 4: Ensure the renewal and future governance of the UK's interbank payment systems supports innovation and competition in payments.

In the strategy the PSR also sets out a number of actions it will take to deliver these priorities. Some of the key actions the PSR is proposing include:

• Promoting competition between payment systems so that, for example, in future people may choose to use interbank payments (when a payment moves from one bank account to another, like an online transfer) to buy their groceries. Most people currently use card payment systems to do this.
• Continuing to protect access to cash for those that rely on it.
• Making sure that, as interbank payments develop (like in the example above), so do the consumer protections associated with them.
• Supporting developments to Pay.UK’s governance of the interbank rules so it has greater ability to enforce compliance with its rules and make changes that improve outcomes.
• Understanding and taking account of the perspective of vulnerable consumer groups towards new ways of paying and the choices available to them.

The PSR is now seeking feedback from everyone with an interest in payment systems and how they work. The deadline for responding is 10 September 2021.

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