The Payment Systems Regulator (PSR) has issued a call for Input on competition issues that could arise in the UK’s New Payments Architecture (NPA)
The regulator is inviting all interested parties to respond to a ‘call for Input’ which seeks to gather feedback on the likelihood of competition issues materialising in the NPA and how harmful or significant they could prove to be.
The overall aim is to provide greater clarity and more detail on the PSR’s expectations, concerns and regulatory approach.
Ultimately, the PSR will publish a ‘Policy Statement’ to explain what bidders, participants and other users can expect from the regulator as the NPA becomes a reality. The PSR expects to publish this statement before the end of 2020.
The PSR is the regulatory and concurrent competition authority for payment systems in the UK and all participants in those payment systems. This includes payment service providers, operators and infrastructure providers to those payment systems.
The NPA is the UK payments industry’s proposed new way of organising the clearing and settlement of payments between banks, known as interbank payments.
The importance of the NPA
“The importance of the NPA should not be underestimated. It is a once-in-a-generation change to the very fabric of the UK’s interbank payment systems,” the PSR says. “It will facilitate the development of services that make transactions safer and give everyone more control over who, when and how they pay.”
Whether paying employee wages, or transferring money to a friend using internet banking, interbank payments are a key part of everyday life for businesses and consumers alike.
The PSR says it wants to see the NPA delivered in a way that drives innovation in payment systems and benefits the people and businesses who use them. This can be done by boosting competition between existing and new payments services as well as enhancing resilience and security in payments.
The payment systems infrastructure
The payment systems infrastructure is the network through which payments are cleared and settled. Thanks to this network, funds can be transferred and payments be made to other people and organisations.
Without this network, salaries would not be paid into bank accounts, cards would not be able to withdraw cash from ATMs. Recurring bills would not be paid, and items would not be able to be purchased from retailers – both in-store and online.
Chris Hemsley, Managing Director of the PSR, commented: “The renewal of the UK’s interbank payments infrastructure, through the NPA, has the potential to deliver innovative new services and products for businesses and consumers.”