The UK government’s decision to eliminate the Payment Systems Regulator (PSR) has drawn criticism from a prominent industry association, which argues that the plans resemble a “reshuffle rather than a reform.”
Earlier this year, the government announced intentions to dissolve the PSR, the body overseeing payment systems like Faster Payments and major card schemes. Its responsibilities would largely be transferred to the Financial Conduct Authority (FCA), streamlining processes for businesses by creating a single point of contact.
This decision was part of a broader National Payments Vision aimed at resolving the “regulatory congestion” within the sector and fostering a world-class ecosystem utilizing next-generation technology to stimulate economic growth.
Initially, the Payments Association supported the move, with Riccardo Tordera-Ricchi, its director of policy and government regulation, stating that the regulator “sealed its own fate” and welcomed the bold choice.
However, in response to a government consultation paper regarding the changes, the association cautioned that the proposed post-PSR framework could “jeopardize UK payments reform.” While they support the National Payments Vision, their approval of the regulatory shift hinges on a clear definition of the roles of the FCA and the Bank of England, credible reductions in regulatory burdens, the safeguarding of fair access, and a coherent competition framework.
Tordera-Ricchi emphasized the need for adaptable, proportionate supervisory tools without overlapping rules. Concerns persist about clear competition oversight responsibilities in the payments market, with stakeholders seeking clarity regarding the roles of the FCA and the Bank of England.