PSR has published its interim report and proposed next steps for its market review into the supply of indirect access to payment systems. PSR’s interim conclusion is that work to open up access to payment systems is generating increasingly positive results. Although there are some specific concerns about choice, service quality and the ability of indirect payment service providers to switch providers, PSR and the industry are making changes to address these issues. The specific concerns raised in the interim report include:
- industry responses to financial crime regulation, aimed at preventing money laundering and terrorist financing, have meant that some indirect access providers are less willing to offer access to smaller payment service providers such as money remitters. As a result these companies have a limited choice of indirect access provider;
- the ability of current technical solutions for real-time payments to meet the required quality of service. This may limit the ability of challenger banks and other large payment providers to compete in related markets, such as retail banking; and
- banks, building societies and other payment providers face barriers to switching indirect access providers, which reduces competitive pressure and prevents them from securing the best possible price and quality of service.
Proposed steps to promote better choice in access services and improve service quality include expanding indirect access or current services, reviews of financial crime regulation and developing alternative access models for interbank payment systems. Consultation on these findings closes 5 May. (Source: PSR reports on indirect access to payment systems)