Treasury has published a consultation on reforms aimed at improving the way the UK makes its payments strategy. This consultation follows the concerns caused by:

  • the Payments Council’s decision (now reversed) to abolish cheques;
  • the delays in delivering the Faster Payments Service; and
  • the Independent Commission on Banking highlighting the need for a level playing field and fairness when smaller firms access the payment systems.

The Government puts forward three options for reform:

  • changing the composition of the Board of the Payments Council to strengthen consumer representation and giving veto power to any two of the Board’s four independent directors;
  • introducing a new public body (the Payments Strategy Board), comprising industry and non-industry representatives and overseen by the Financial Conduct Authority (FCA), which would make public recommendations to the payments industry. The Payments Council would still have a role in accepting and delivering the recommendations on behalf of the industry ; or
  • creating a new regulator for the payments industry, similar to existing utility regulators.

At this stage, the Government favours the second alternative, as it would address the need for payment systems that are more responsive to the needs of all users while industry would still decide how best to deliver projects most effectively. Treasury seeks views by 10 October. (Source: Setting the Strategy for UK Payments)