In his first speech as Managing Director of the Payment Systems Regulator, Chris Hemsley today set out his priorities for the world’s first and only dedicated regulator of payment systems. Chris was speaking at the international banking and payments conference, Sibos, in London.
In his speech Chris focused on themes of innovation, competition and protecting people and he returned to these areas a number of times as he spoke.
The rapid pace of change in payments, Chris said, is both a challenge and opportunity, and he emphasised the importance of being able to harness the energy and creativity of the sector to secure good outcomes.
And while he discussed the range of work the PSR is doing, Chris singled out two priorities:
- How the rapid shift to digital payments interacts with the role of cash in the UK economy.
- The fundamental redesign of the UK’s interbank payments architecture, so that it is fit for purpose to meet the future needs of the UK’s digital economy.
The PSR’s managing director opened his speech by noting the PSR’s role in the payments landscape, and highlighted the exciting - if sometimes challenging - nature of the sector.
“Our role is to support innovation and improve competition in payments. But also to protect users of payment systems – which means promoting a good choice of how to pay which meets the needs of different people. And, of course, it means that these systems must be resilient and reliable.
“This is a really exciting time to be involved in the world of payments. The speed of change in our sector is breakneck!”
Moving onto the PSR’s priorities, Chris talked first about the regulator’s continuing work on cash.
“The fact that cash use is in decline is not in question. Ten years ago, cash accounted for 60% of all payments. Today it is less than 30%, and in ten years forecasts suggest it will be below 10% . This is a big shift.
“Our approach is based on our view that everyone should have a good choice of how to make payments in ways that work well for them.
“And not everyone wants to or – indeed – can choose digital payments. Even for those who want to choose digital methods, for a number of reasons, we are not there yet.”
Focusing on the need to act now to protect those who may be left behind in the transition to digital payments, Chris highlighted the importance of good engagement to build knowledge of the issues some communities are facing.
The PSR’s managing director called for more action from all parties about how best to engage with and support affected communities.
“There is a very real opportunity here to build a comprehensive community engagement scheme that would apply throughout the UK and would allow local communities to raise problems with access to cash.
“This would allow them to request support and assistance to resolve those problems – whether the solution is ATMs or other routes to cash.
“Ideally, this should be a one stop shop, that is widely promoted and easy to access and use.”
The PSR’s managing director moved on to his second priority: the renewal of virtually all of the infrastructure underpinning interbank payments . He said:
“Done well, this has the potential to future-proof the UK’s payments landscape by delivering a resilient, robust architecture that supports innovation and greater competition in overlay services. Overlay services that will benefit real people when they choose how to make their payments.”
Speaking about the role the PSR can play specifically, Chris said it was vital the regulator supported the various moving parts of this transformation.
“I see our role as critical to ensuring that these pieces fit together and that decisions taken now work towards a resilient, competitive and innovative inter-bank payment system.
“Indeed, the PSR – as an independent regulator working only on payment systems – provides focus on these issues, keeps an eye on the longer-term implications of decisions, and can provide consistency of approach over time.”
Chris closed by returning to the PSR’s three objectives, and highlighted again the critical role the regulator plays in supporting the UK economy.
“This is a fast-moving sector with an exciting future. And I’m excited to be taking up the reins at the PSR as we head into that future.
“The PSR has a vital role to play in ensuring that the UK’s payment landscape is competitive, supports innovation and – fundamentally – benefits people and businesses.”