The government is reportedly exploring whether to get rid of the UK’s payments watchdog.

According to Sky News, ministers are considering scrapping the Payment Systems Regulator (PSR) and folding it into the Financial Conduct Authority (FCA).

The news website said that a decision in principle is anticipated within weeks, with sources saying over the weekend that the government is “actively considering” the move.

The reports come after business secretary Jonathan Reynolds suggested that there could be changes to the UK's wider regulatory framework earlier this year.

"We've got to genuinely ask ourselves the question: have we got the right number of regulators?" he told journalists.

Last week, the Financial Times also reported that chancellor Rachel Reeves is planning an audit of 130 British regulators to make sure they are contributing to growth.

The newspaper said that this would include exploring if some of those bodies should be scrapped.

“It’s well known the government is auditing the role of regulators, and decisions on the regulatory structure are rightly for them and parliament," a PSR spokesperson told FStech. "We are focussed on working with the FCA and the Bank of England to deliver safe, competitive and innovative payment systems.”

The PSR recently decided to join the role of managing director of the PSR with the new FCA executive director of payments and digital finance.

On 12 February, when giving evidence to the House of Lords, the PSR's interim managing director David Geale addressed the question of the PSR's future.

“…the regulatory structure is, of course, a matter for the Government and we will work with that," he said. "The PSR was set up in legislation as an economic regulator specifically for payment systems: plugging a gap that would otherwise exist between the role of the FCA and the Bank of England.

"The FCA does not regulate payment systems.”

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