Examining the UK Payments Landscape
In July 2020, HM Treasury published a “Payments Landscape Review: Call for Evidence” for a strategic review of the UK payments industry. Following industry feedback, HM Treasury released its response to the Call for Evidence in October 2021, which outlines a number of initiatives to ensure the payments industry remains at the forefront of technology and technology. innovation.
The main initiatives include:
Faster Payments is the UK system for near instant payments. Most internet and telephone banking payments under £ 100,000 are processed here. It is also the payment rail for Open Banking payments.
Reimbursement and liability requirements (much like the chargeback regime of some card systems) will be introduced to apply to all participants in the system. HM Treasury is working with the Payment System Regulator on the next steps (in the same context, the PSR just published its anti-APP scam consultation on November 18, 2021 which will be covered in a separate blog)
Open Banking payments are essentially direct account-to-account payments. While there have been many innovations in the payments industry, HM Treasury notes that most tend to rely on cards.
On infrastructure, Pay.UK (the operator of most UK payment systems) will be responsible for reviewing the changes needed to improve support for card-less account-to-account payments.
HM Treasury, FCA and PSR are also considering potential changes to regulatory requirements for Open Banking to better support its development. These will likely go through the relevant consultation process in due course.
The UK government wants to ensure a flexible and proportionate regulatory framework for payments. This is part of the overall review of the future regulatory framework (which covers the entire financial services industry in the UK) whereby the proposed approach is that the general framework (in this case for payments) be defined in legislation while detailed requirements and technical standards will be left to the regulator (here, the FCA) to design and implement. This would ensure that regulatory responses are faster as no legislative process needs to be activated to make changes to the relevant rules.
HM Treasury will also consult on the integration of systemically important companies into payment chains within the oversight of the Bank of England. This suggests that companies in a systemically important position in the relevant payment chain may be subject to Bank of England oversight, whether or not they are subject to regulation. The scope of this proposed regime is currently unclear.
In addition, the paper notes other initiatives in this regard, including the proposed regulation for stablecoin and the exploration of a possible digital currency from the UK central bank.
Copyright 2021 K & L GatesRevue nationale de droit, volume XI, number 323