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Making a difference – the PSR’s 2018/19 Annual Report

Published 09 07 2019

The Payment Systems Regulator (PSR) has today published its Annual Report and Accounts for 2018/19, which reports on its activity over the past financial year.

The year saw the regulator continuing to make a difference in areas that really matter to people in their day-to-day lives – either through engagement and collaboration or by using its powers to deliver change. 

The PSR continued to work with the payments industry to reduce fraud, by fighting authorised push payment scams. In 2019 this led to the introduction of a new industry code that has seen banks take more responsibility for preventing these scams and giving consumers better protection than ever before.

The regulator has also looked at how people get access to cash in the UK, and the role it can play in making sure everyone continues to have free access to cash. This has included work with LINK, the main UK ATM network operator, to ensure it maintains the broad geographic spread of free-to-use cash machines. In October 2018, the PSR gave LINK a specific direction instructing it to do all it can to fulfil its commitments to protect isolated ATMs.

Continuing focus on competition and innovation

The PSR launched its third market review, a major project looking in detail at the supply of card-acquiring services, and whether this vital part of card payment systems is working well for merchants and consumers. The regulator finalised its terms of reference for this important work in January and is now gathering and analysing information and evidence. 

The PSR’s programme on improving access to payment systems saw continued progress, with more payment service providers (PSPs) than ever connecting to the interbank systems – since the PSR became operational in 2015, the number of direct participants in Faster Payments has more than doubled. Another significant step was made with the first non-bank PSPs joining Faster Payments in 2018. This increased access is a vital part of stimulating competition and innovation in payments, improving choice for businesses and allowing them to offer new services to consumers.

The regulator has also been monitoring the development of a new payments architecture (NPA) for the UK interbank systems – an overhaul of the infrastructure supporting the systems which should further stimulate competition and innovation and give people a greater choice of payment services. The NPA is being developed by Pay.UK, the operator of Bacs, Faster Payments and Cheque and Credit.

It is also important that payments firms comply with their legal obligations. Reflecting this, the PSR continued work on its first Competition Act 1998 (CA98) case, and opened seven investigations into suspected breaches of the Interchange Fee Regulation. These investigations are ongoing.

Evolving as an organisation

The PSR moved to its new office in Stratford in summer 2018, giving it the facilities and technology to help its staff work and collaborate even more efficiently and flexibly. It has also continued its recruitment programme to bring the team up to its target operating model – equipping it to deal with the broadening scope of its activities and making it ready for the challenges of the future.

Louise Buckley, Co-Managing Director of the Payment Systems Regulator, said:

“In the last year we’ve continued to deliver in core areas while growing into new ones. We’ve increased our work on consumer issues and maintained our progress on key ongoing projects, focusing our resources to have the most impact where it really matters. 

“The common thread that links this success is our people’s engagement with our purpose and their drive to make payments work well for all of us in our day-to-day lives.”

Chris Hemsley, Co-Managing Director of the Payment Systems Regulator, said:

“The launch of the industry code to help prevent APP scams is a significant step in protecting consumers from fraud. It’s a great example of our flexible approach to regulation, collaborating with a wide range of stakeholders to bring about genuinely meaningful outcomes on important issues. 

“Much of the work we did last year will carry through into the next. We will continue to do all we can to protect people and make sure they have a choice of payment methods that suit their needs.”