From paper to reality


Speech by Hannah Nixon, managing director of the PSR, at the British Bankers' Association The Future of Payments Conference on 24  September 2015 in London.

This is the text of the speech as drafted and may differ from the delivered version.

Good morning.

I am delighted to be your keynote speaker today and my thanks to the British Bankers’ Association for the invitation.

Incidentally I also had the honour of giving the keynote speech at last year’s Future of Payments conference, which took place exactly the same day – 24 September.

Such a neat coincidence it is far too good an opportunity for me to pass up so I’m going use this anniversary as a convenient way of making some observations on the last 365 days.

But, this is a conference all about the future, so more than anything I want to focus on what happens next.

Three hundred and sixty five

Last year was a different time for the PSR. In September 2014 we were at a more gestational stage, and all eyes were on us.

We were busy working our way through stacks of stakeholder feedback and research to understand what we needed to do to deliver our objectives.

What approach should we take? What policies would make a real difference? What could we learn from the industry and other regulators?

It was a time of reflection and discussion. It resulted first in a Consultation Paper and, ultimately, our Policy Statement – which confirmed the approach we are using today.

Fundamentally, we’re focused on developing and protecting competitive markets where they can provide the conditions where innovation thrives and they deliver for consumers. And where competitive markets can’t achieve that, we will intervene proportionately and in an evidence-based way to drive better outcomes.

So a year has passed and we now have a regulatory framework that is already helping drive up performance in payments.

Our framework is hardwiring the core qualities we are looking for into the way you do business.

We’ve put in place a package of measures to improve access to payment systems, ensure payment systems are focused on their users and to speed up the pace of innovation.  These include requirements for clear and proportionate access terms and on boarding processes; requirements to ensure all users are appropriately represented in decision making; requirements to improve information provision in the sponsor bank market; and, most recently, the launch of the Payment Strategy Forum, which is working to drive innovation where industry collaboration is needed.

Encouragingly, we’re already beginning to see changes in the industry.  Changes that should improve the way that payments systems work and ultimately benefit all who use them.  For example:

  • It’s clear that payment systems are going up the agenda.  There’s still some way to go. But the banks, who ultimately own them, are beginning to see payment systems as the strategic assets they are; not simply as something that can be left alone as long as they don’t fail.
  • The process for joining a payment system directly is becoming clearer and easier.  We’re hearing that the time to connect is roughly halving from 12-18 months to around 6-9 months.
  • We’re expecting to see a number of new members of both interbank and card schemes next year.
  • There’s much greater transparency of information in the sponsor bank market now, and there are signs that new providers are looking to enter that market.