The Payment Systems Regulator (PSR) has published its Annual Plan and Budget for 2018/19, stating it will not shy away from direct intervention and using its competition powers.

Hannah Nixon, managing director of the PSR, said it has succeeded in shaking up a sector that was dominated by major players. “By opening up access in payment systems, we’ve made good progress on levelling the playing field. This is critical to boosting competition in retail banking and improving the range and quality of services that consumers receive.”

The PSR will continue to oversee the procurement process in infrastructure for payment systems, removing barriers and opening up the industry to new and innovative technology providers. It will also develop a reimbursement model for the victims of authorised push payment scams - reducing the number of consumers affected by this scam and minimising the harm caused.

The annual report stated: “The PSR will not shy away from direct intervention, particularly when the interests of those that use payment systems are concerned. This includes intervention using its competition powers.”

During the last year, the PSR opened its first Competition Act 1998 case and carried out several searches under warrant at business premises.

This year will see the establishment of the New Payment System Operator (NPSO) and the introduction of the New Payments Architecture (NPA), in order to transform the UK interbank payment systems. The NPA will help to fight fraud by introducing a confirmation of payee service - enabling consumers to have greater confidence that they are paying who they intend to.

Looking at the cards market, the PSR will continue to monitor compliance with the Interchange Fee Regulation (IFR) and consider wider issues on how this market works. “We will also consider contactless payments and whether developments in this area could have an effect on our statutory objectives,” the document read.

The report also mentioned Brexit, stating that the PSR is supporting the Treasury in its work to transpose all EU-derived financial services legislation into UK law. It will check for any potential ‘deficiencies’ that would prevent retained EU law from operating effectively after the UK withdraws from the EU.

“The longer-term impact of Brexit on the overall regulatory framework for payment systems in the UK will depend, in part, on the UK’s future relationship with the EU,” according to the report. “Given the range of potential outcomes and the uncertainty at this stage, we are continuing to prepare for a range of scenarios to ensure a robust regulatory system is in place on day one. We are also seeking to mitigate any risks that may arise as a result of withdrawal.”

Finally, the PSR will continue the exploratory work started last year in data, competitive dynamics and consumer protection, as well as ensuring the provision of free-to-use ATMs.

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