UK encourages competition in payments industry

london

The British government has launched a public consultation on which firms should be supervised by a new consumer payments regulator, in a bid to inject more competition into a rapidly changing sector.

Visa, Mastercard and the main interbank systems such as Bacs, CHAPS, Faster Payments, Link and the cheque clearing system may come under the new Payments Systems Regulator from April next year, according to Reuters.

The new body comes from an attempt to ensure that established payments systems offer access to new entrants on fair terms.

A key focus will be transparency, so that new players can challenge established financial institutions with new, innovative payment options.

The Payments Systems Regulator can even order the owners of the more established systems to break them up or sell them.  Over 90 percent of credit and charge card transactions and all debit card transactions in Britain are now made through Visa or MasterCard.

The government said that recent examples of innovation in payments include the ability to pay in cheques digitally using a mobile phone, and the introduction of a current account switching service.

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