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Competition

Creating a more competitive marketplace is key

A competitive marketplace benefits consumers

One of our key aims is to promote effective competition in the payment systems industry we regulate.

We want to have payment systems that are open, transparent and easy to access.  This will drive increased competition which will benefit everyone who uses payment systems.

As a new regulator we will keep our policies under review to ensure they have the effect we intended and adjust our policies if needed. 

Regulatory directions to improve markets

Our first important action to improve the operation of the payment systems market has been to issue a number of important directions which are set out in our Policy Statement.

These are aimed at improving the ability of entrants to gain direct access to payment systems by requiring open, fair access terms and conditions and regular reporting.

To improve the ability of entrants to gain indirect access we require sponsor banks who provide such services to publish their terms and conditions. This will make it easier for payment service providers to assess their indirect access options, strengthen their bargaining power and compete more effectively in the provision of services.

Market reviews

Our second key action is to launch two detailed market reviews that will examine some of the key aspects of payment systems markets. We can then decide if we need to take further action.

Indirect access market review

Our market review into the provision of indirect access is aimed at gathering detailed evidence to determine whether current indirect access arrangements promote competition in the interests of those who use payment services or whether changes are needed.

Payments infrastructure market review

Our market review into the ownership and competitiveness of payments infrastructure will examine whether existing arrangements are delivering good results or whether changes are needed.

Payment cards

We are also looking closely at the payment cards market to ensure it’s operating in the best interests of users of payment card systems.

Our programme of work on cards is driven by new legislation that has been introduced at European level. The EU Interchange Fee Regulation (IFR) sets new caps on interchange fees and new requirements on card systems in Europe.  We expect to be given the role of monitoring and enforcing the IFR.

Our work will look at how the IFR may apply in the UK and interact with other card fees.We will develop our framework for monitoring compliance with the IFR, including the business rules being imposed on card systems.

Our programme of work will also explore other concerns our stakeholders have about card systems including transparency, governance and access.

We will determine if we need to take action, including whether or not to apply our directions about service-user interests and transparency of card systems.

Interchange fees and cards programme of work