Priorities of the Payment Services Regulator: what PSPs need to consider

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Priorities of the Payment Services Regulator

On 13 January 2022, the Payment Services Regulator (PSR) published its first formal strategy. The implementation of this five-year strategy will materially impact Payment Service Providers (PSPs) through increased focus on accessibility, protection, and competition.

Over the last six years, the PSR has become more established as an organisation and has decided to fully detail what it wants to attain and how to prioritise its work in the future. The strategy outlines four outcomes that the PSR wants to see in the next five years and four strategic priorities to achieve these outcomes, as detailed below.

OUTCOMES

Everyone has access to payment services that meet their needs

Users are adequately protected when using payment systems and services so they can use them with confidence

Payment systems enable effective competition in the provision of payment services

Payment systems are efficient and commercially sustainable

PRIORITIES 

Ensure users have continued access to the payment services they rely on, and support an effective choice of alternative payment options

Ensure users are sufficiently protected when using the UK’s payment systems

Promote competition between and within payment systems; protecting users where that competition is not sufficient

Act to ensure the interbank systems provide the infrastructure, rules and incentives that foster innovation and competition in payments

The PSR’s plan and strategic priorities will lead to material changes in the UK payment industry that will impact Payment Service Providers and the way they operate.

We have reviewed the PSR’s strategy in detail and believe that PSPs should consider the following questions under each of the three areas of focus: accessibility, protection, and competition.

Accessibility

  • Is there clarity about who the main users are and what are their needs; does product development consider such needs? What risks – if crystallised – could be detrimental to user needs and experience?
  • What processes and controls are in place to mitigate such risks; are there robust methodologies for monitoring, measuring and reporting such risks?
  • How are vulnerable customers identified? How do the processes around the design of new services ensure that their needs and accessibility requirements are considered?

Protection

  • What processes and controls are in place to prevent and/or detect scams, especially Authorised Push Payment (APP) scams?
  • What processes are in place to reduce the amount of harm done to victims?

Competition

  • How does the firm’s strategy and services differ from competitors, especially in terms of accessibility and security?
  • How does the use of interbank payment systems affect the firm’s outlook on innovation and product development?

Key references: 

The PSR Strategy (psr.org.uk)