The proposals in the Strategy could bring about significant changes to the payments sector both in the short and longer term. The consultation on the draft Strategy will run from 13 July to 14 September. Most, if not all, financial services businesses will be affected by these proposals in some way. It would be advisable for those that will be affected to engage in the process by submitting a response to the consultation. The Strategy can be viewed here.
In Payment Matters 22 we reported that the Payment Systems Regulator (PSR) had published its interim findings from its market review into competition in the supply of indirect access to payment systems. On 21 July 2016, the PSR published its final report which broadly follows its interim findings.
The Report concludes that competition in the supply of indirect access appears to be producing “some good outcomes”. However, the PSR has identified specific concerns in respect of the quality of access being supplied, limited choice for certain payment system providers in the market, and barriers to switching.
The PSR has confirmed, as proposed at interim report stage, that it will not take any specific action to tackle these concerns because it is encouraged that developments already taking place in the market, combined with its own work, will be sufficient. Instead of monitoring the impact of these developments over a 12 month period, as proposed in its interim report, the PSR will include an overview of developments in the indirect access market in its annual access and governance reports – the next of which is due in early 2017.
At the same time, the PSR is consulting on draft guidance (also released on 21 July 2016) on how it proposes to use its regulatory powers to require operators of payment systems and indirect access providers to grant access to a payment system, or vary the terms of such access . This, coupled with its decision not to take action at the market-wide level, suggests the PSR may have an appetite for using these powers to address access issues between individual firms instead.