Treasury is required to review the PSRs 2017 and is launching its review alongside a Call for Evidence on the evolution of UK payments regulation.
Key points to note are:
- the consultation in 2022 on payments regulation and the systemic perimeter, on which the Government will respond in 2023;
- the upcoming consultation on stablecoin and cryptoasset regulation; and
- the ongoing vision for Open Banking.
Underpinning all the separate initiatives are the PSRs, which form part of retained EU law.
The review has found, in general:
- that the PSRs have fostered a strong, innovative and competitive UK payment sector that is recognised globally;
- that in isolation the PSRs are not sufficient to foster meaningful competition via Open Banking; and
- therefore, that the regulatory framework for payments is potentially not working as well as it could in a number of respects.
When seeking evidence on views for development of the PSRs, Treasury will also welcome views on the EMR, the Cross-Border Payments Regulation, the Interchange Fee Regulation, SEPA and ongoing developments. It is proposing to consider specific issues, including clarity and fairness and fraud protection, as well as regulation which fosters regulatory objectives, encourages Open Banking and ensures customers can both make informed choices and have fair access to the payment system.
Among the specific questions on which Treasury seeks input are:
- how the payment services framework should evolve;
- whether there is a case for rationalising and removing the distinction between EMIs and PIs;
- whether the scope and definitions in the current laws are clear;
- whether exclusions continue to be appropriate;
- how, if at all, the authorisation process should be reformed – including the registration process for small institutions;
- how the regulatory framework for AISPs and PISPs is working;
- whether the registration framework for agents should be reformed;
- whether the current information provision framework is working and whether there should be any changes to the Cross Border Payments Regulation to increase transparency;
- how users and providers have experienced termination of payment services contracts and their respective rights; and
- whether and if so how the framework should make provision for charges for payment services, information and measures to address fraud.
Treasury has also published a post implementation review of the Payment Card Interchange Fee Regulations.
Comments are needed by 7 April 2023.