The UK Payment System Regulator’s (PSR) panel issued recommendations on May 10 to eliminate barriers for consumers and merchants to access digital payments in the UK.
The recommendations focus on how to improve open banking in retail payments, improve the consumer experience with existing recurring payments, reduce fraud risks and enable the use of digital identity in digital payments.
The panel’s suggestions go from changes in regulation to strengthening the relationship with key stakeholders and to better educating consumers on digital payments to reduce digital exclusion.
The report considered that a key barrier to digital payments is that many consumers, small businesses and small organizations don’t fully understand their digital payment options. The PSR should raise awareness and understanding of digital payment options, the panel argued, and it gave as an example the card-acquiring market review where the regulator is proposing remedies that may help merchants better understand and compare different payment services.
The second key recommendation is around open banking. The current legal mandate for open banking has been driven so far by the Competition Markets Authority (CMA) in an order following a retail banking investigation and by the Open Banking Implementation Entity (OBIE). But these have no mandate beyond the terms of the order. The panel recommends that the PSR, alongside the Financial Conduct Authority (FCA) take a regulatory oversight role to ensure that open banking develops beyond the CMA Order to enable new account-to-account retail payment services.