Last month I asked where is the national payments vision? After last night’s Mansion House meeting in London with the UK Chancellor, it has finally been released. So, what’s in the plan?
First, there are two regulators involved in payments: the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR). The consultation discovered that the two authorities often work separately and are uncoordinated. Decision: the FCA will lead anything that requires payments regulation under their remit, where it collides with the PSR.
Second, a lot of the payments infrastructure is too slow to change. Upgrades need to move faster and more efficiently, and there is now a new committee being put in place to reform this, replacing the mass of bankers and consultants who had been dealing with it before.
Three, Open Banking and Fraud take the lead. The OBIE (Open Banking Implementation Entity, which became Open Banking Ltd) will be replaced by the FCA to lead the regulations in this space. Equally, with fraud, the FCA takes over. That’s quite interesting as the PSR recently introduced laws implemented on 7 October 2024 to combat Authorised Push Payment (APP) fraud activities. It was quite controversial as they originally wanted a reimbursement level to be set at £415,000 but, late in the day, reduced it to £85,000 (the same as the financial services compensation scheme, FSCS).
Basically, all new regulatory changes required in the payments space will be lead by the FCA which begs the question: why do we need the PSR?
Fourth, digital identity is a thing. In the Garner paper I referred to, there is a discussion around where digital identity in the UK goes. What’s interesting is the paper released today states that there will be “measures to establish a statutory footing for digital verification services without creating a mandatory digital ID system”. Interesting.
Fifth, you cannot have a payments vision without some form of mention of digital currencies, so here it is but, a bit like the rest of the vision, it is all about committees and working parties to investigate and explore ideas without any mandate or decision. Ah well.
Finally, the Government will establish a NPVS (National Payments Vision and Strategy) committee to deliver the NPVS. Hmmmm … who’s going to be on that Committee?
Fraud and other ideas are mentioned, but it does not set a clear vision overall. Instead it seems to be an amalgamation of things for committees to grapple with and clearly stating that it is all down to the FCA to sort out.
Here is the report:
