Quick Summary: Payment Systems Regulator Strategy

In January (2022) the Payment Systems Regulator (PSR) published their latest strategy which sets out their priorities and what they aim to achieve over the next five years. 

In this edition of Payments:Unpacked Extra! we provide a quick summary of the strategy together with relevant links to the PSR’s website.


Strategic priorities

The PSRs strategy recognises areas where payments markets and systems are working effectively, but also highlights where more work is needed. It brings together ideas for how payment systems and services should adapt for the future and focuses on the PSR’s core role – to protect the interests of people and businesses, and to promote effective competition and innovation in payments. 

The strategy identifies four strategic priorities for the next five years. 

These are:

  • Ensure users have continued access to the payment services they rely on and support a choice of payment options.
  • Ensure users are sufficiently protected when using the UK’s payment systems.
  • Promote competition between UK payment systems and the markets supported by them; protecting users where that competition is not sufficient.
  • Act to ensure the interbank systems provide the infrastructure, rules and incentives that foster innovation and competition in payments.

At a glance

Introduction from Chris Hemsley, Managing Director are the PSR:

Payments are an essential part of daily life and it’s the PSR’s job to ensure that the systems underpinning them work well for everyone.

We want everyone to have access to payment services they need – and to be sufficiently protected when using them. In our new strategy, we set out our priorities and what we aim to achieve over the next five years.

The strategy recognises areas where payments markets and systems are working effectively, but also highlights where more work is needed. It brings together our ideas for how payment systems and services should adapt for the future and focuses on our core role – to protect the interests of people and businesses, and to promote effective competition and innovation in payments.

Natalie Timan, Head of Strategy, Analysis and Monitoring at the PSR outlines the next steps:

Outcomes and priority action areas

The summary version of the PSR’s strategy provides the following snapshot of outcomes (what they want to see) and priority action areas (what they will do):

Source: Payment Systems Regulator

For ease of consumption the PSR have produced a summary version of their strategy: PSR Strategy Summary Version.

You’ll find the full PSR Strategy document here: PSR Strategy.


Reflecting feedback

Back in Autumn 2021 the PSR consulted on this strategy and the feedback received helped to finalise their strategic approach and ensure that they focus on the right outcomes and, ultimately, publish a strategy that is balanced and credible in the eyes of those they regulate and protect – you can view Northey Point’s response to the draft stagey here: PSR strategy for a changing world.

However the final strategy has not significantly changed from the draft consultation document consulted, but the responses have helped identify some areas to amend or clarify. For example, the PSR have emphasised the importance of near-term outcomes as well as longer-term ones. In practical terms this clarifies that, as they work to develop competition, the PSR state that they may need to act to protect users until competition has time to take effect.

Linked to this, the PSR have recently announced new work to examine card scheme fees and cross-border interchange fees, including considering whether shorter-term measures would be appropriate until they develop and implement any longer-term measures to introduce more competition.

The PSR have also adjusted their fourth priority to better reflect the changes taking place now and in the future to UK interbank payments. This makes clear that as they work towards good outcomes for all interbank payments, this includes those initiated through Open Banking services.

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