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FCA: PSR ‘Call for Inputs’

April 2014

Executive Summary

  • The UK’s card market is dynamic and mature and the biggest in the EU. UK consumers represent 31% of the overall card market and 73% of the credit card market, with over 25 card providers issuing cards and around 10 companies acquiring services on behalf of merchants. The UK market is also world-leading in collaborating in the interests of the consumer and merchants – with national initiatives such as chip & PIN and the rollout of contactless cards on various transit networks being admired and emulated globally. This collaboration happens between the different players – issuing and acquiring banks, card schemes and merchants – working through non-competitive forums such as the UK Cards Association.
  • As a proactive trade association, we seek to work closely with regulators across the card payments arena to ensure they have the data and information they need to make proportionate and evidence-based decisions. UK banks and card companies are subject to regulation from a number of UK and European regulators – including the Financial Conduct Authority, Prudential Regulation Authority, Bank of England, the Treasury, and now the Competition Markets Authority and the Payments Systems Regulator (PSR) - which can result in a fragmented approach. We therefore welcome the opportunity to inform the regulatory approach and design of the PSR.
  • We believe that within the UK/EU regulatory framework the PSR can help payment providers, merchants and consumers by providing a focused and impartial view in how the payment system network should operate across the UK. Our main request is that, in taking any action, the regulator considers how components operate as a whole, rather than looking at different parts in silo, and recognises that changes will have consequences across the wider payment system. We would also look for any resulting regulation to support and be flexible enough to allow for the fast-moving innovation in this area. We would urge the regulator to conduct in-depth and quantifiable analysis of the payments landscape – in terms of competition, innovation and consumer outcomes - as it shapes its policy approach over time. A UK regulator will also need to consider the ability for the UK market to compete internationally and have the resources to be able to invest in and enhance its competitive features and future infrastructure.

If you'd like to see the whole consultation, please click on the link below.

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