Source: Payment Systems Regulator
In this piece, David Geale, the PSR's Managing Director reflects on the National Payments Vision, announced in the Chancellor's Mansion House Speech on 14 November 2024.
The critical importance of payments was emphasised by Rachel Reeves, the Chancellor of the Exchequer, as she announced the Government’s National Payments Vision in her Mansion House speech. I was in the audience to hear her set out the Government’s vision for a trusted world leading payments ecosystem, delivered on next generation technology, where consumers and businesses have greater choices of payment solutions to meet their needs and payments play their full role in supporting economic growth. As part of that Vision, she set out the importance of innovation, security and competition as key pillars for the payments ecosystem, underpinned by strong foundations – including an effective regulatory framework and resilient infrastructure to support innovation.
The PSR has worked with the Government, and with the FCA and Bank of England, in developing the National Payments Vision. We strongly welcome both the direction it provides and the accompanying recommendations letter which sets out the Government’s priorities for the UK’s payments sector.
We fully support the view that innovation, security and competition are the key areas of focus as the UK payments infrastructure evolves to meet new technology opportunities and changing service user needs. These have been the pillars of the PSR’s strategy, which we are currently reviewing, and we are clear that the Vision’s priorities – particularly the strong emphasis on competition and innovation - will be key PSR priorities into the future.
Competition is also clearly central to payments and has been a key PSR focus since our creation. We particularly welcome the strong support for account-to-account payments, providing greater choice to consumers and businesses than they currently have – helping to drive innovation and downward pressure on costs. The emphasis on economic growth is also important – we are already working hard to support this – creating opportunities for new players and will say more on our future focus in our mid-Strategy review.
There is much to welcome in the Vision, but I wanted to highlight a few particular areas:
- The UK led the world on developing the infrastructure to enable faster payments. We now need to go further and upgrade these systems as soon as possible so that we don’t fall behind. We will work with the Bank of England to clarify and refresh the requirements for the UK’s retail infrastructure, including the governance arrangements needed to deliver this. As the Vision emphasises, it is essential that the infrastructure of the future supports market innovation and competition. In light of the Vision’s direction on payments infrastructure, it is now our intention to consult on changing our obligations on Pay.UK in relation to the New Payments Architecture.
- Open banking, which has long been a key PSR priority, is key to realising a more competitive and innovative sector and we have played our role in establishing its foundations. We will deliver our current work on phase one of variable recurring payments – and will shortly publish our proposed next steps, working in tandem with participants across the ecosystem to keep up critical momentum. We will work closely with the FCA as it takes the lead for open banking to support its successful delivery and further development.
- Promoting high standards of consumer protection and ensuring safety for those making and receiving payments is core to customers having trust and confidence, and to ensuring they are protected. The PSR has achieved real improvements for users. This includes our world leading APP reimbursement rules to compensate victims, which have been effectively implemented and are protecting consumers now. We have also expanded Confirmation of Payee to help address fraud and payments made in error, and have published data on the fraud performance of firms, providing incentives for improvement. We have always been clear about the importance of keeping APP rules under review – and are pleased to confirm that the 12-month implementation review which we have previously committed to will be independently led. Better data sharing will play a critical role in addressing fraud into the future and we will work to support further data sharing initiatives, as well as publishing our own data. This includes our upcoming publication on the origination of fraud, including the role of social media, planned for later this year.
- We also welcome the focus on close collaboration between regulators. We already work closely with both the FCA and the Bank of England based on our current memorandum of understanding and will play a full role in taking forward updates to it as we all play to our strengths and collaborate effectively to take UK payments forward. We also welcome the Payments Vision Delivery Committee and will play an active role as it takes forward its important work.
We will shortly publish our mid-Strategy review. This will recognise the strong outcomes that we have delivered, following which we can now increase our focus on innovation and economic growth. We will say more on our ambitious future programme, and how we will support delivery of the Vision, when the mid-Strategy review is published.
We strongly share the Government’s vision for competitive and innovative payment systems which deliver for people and businesses and grows the economy. These are – and will continue to be - priorities for the PSR. We have an ambitious agenda ahead of us with the opportunity to shape positively UK payments for the future – and we look forward collaborating with all partners to deliver that.
