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Payment Matters 16: UK

Payment Matters 16: UK
  • United Kingdom
  • Financial services - Payment services

20-04-2015

In this issue:

PSR directions to start from 30 April 2015

On 13 March 2015 the Payment Systems Regulator (PSR) made an announcement concerning the proposed directions outlined in its November 2014 consultation paper, which will come into force during 2015. Where a direction was proposed to come into force on 1 April 2015, it has now been decided that no direction will come into force prior to 30 April 2015.

What this means for you

Stakeholders can benefit from the extended period to consider the directions in the PSR’s policy statement to the consultation paper, which will be released before the end of March 2015.

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The UK Cards Association launches 2015 manifesto

On 16 March 2015 the UK Cards Association announced that it had developed an industry manifesto to set out key messages on card payments, backed by a range of policy changes which the future government and legislature could deliver to support the industry to further improve the offer to consumers. Policy requests made on behalf of the industry include:

  • supporting a nationwide campaign to warn consumers and businesses of the dangers of scams;
  • removing legal barriers preventing the sharing of data on fraud and money laundering;
  • facilitating access to additional data, like student loans / Government records, to support responsible lending;
  • ensuring the credit industry forbearance framework is matched by HMRC, local authorities and utilities;
  • removing barriers/ encouraging collaboration in areas where commercial hurdles prevent innovation;
  • assessing regulation for consistency/ proportionality across overlapping bodies likes FCA, PSR and FOS; and
  • engaging proactively with EU and international bodies to ensure fair outcomes for the UK market.

What this means for you

The manifesto is a useful indication for card payment services providers of the perspective to the debate from the card payments industry. The recommendations could have an impact on future policy considerations.

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Payment Services (Amendment) Regulations 2015 come into force

On 5 March 2015 the Payment Services (Amendment) Regulations 2015 (SI 2015/422) were laid before Parliament, and came into force on 1 April 2015. This legislation amends the Payment Services Regulations 2009, transferring the functions of supervising and enforcing compliance with the requirements of the 2009 Regulations (relating to access to payment systems) from the Competition and Markets Authority to the new Payment Systems Regulator. This instrument also makes related amendments, including provision for the PSR’s funding for those functions. You can find the new legislation and explanatory notes here:

What this means for you

Firms and payment systems providers should be aware that (with effect from 1 April 2015) the PSR is now the regulatory body responsible for supervising and enforcing compliance with the 2009 Regulations relating to access to payment systems.

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Banking Act 2009 (Inter-Bank Payment Systems) (Disclosure and Publication of Specified Information) (Amendment) Regulations 2015

On 5 March 2015 the Banking Act 2009 (Inter-Bank Payment Systems) (Disclosure and Publication of Specified Information) (Amendment) Regulations 2015 were laid before Parliament and they came into force on 1 April 2015. These Regulations amend the Banking Act 2009 (Inter-Bank Payment Systems) (Disclosure and Publication of Specified Information) Regulations 2010, allowing the Bank of England to share information obtained by it in connection with its oversight of interbank payment systems with the Payment Systems Regulator.

What this means for you

Without these Regulations, the Bank of England would remain unable to share information that might be useful for the PSR’s functions, except when the information is relevant to financial stability. Please see the Treasury’s Explanatory Memorandum for further information.

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Bank of England speech on stability of payment systems

On 25 February 2015 the Bank of England published a speech by Andrew Bailey, BoE Director, Financial Market Infrastructure, on the BoE's role in maintaining financial stability through supervising systemically important payment systems.

What this means for you

The BoE's focus in supervising payment systems continues to be protecting and enhancing financial stability and it is identifying key criteria for financial stability against which it will assess change to the industry. This involves regulating increases in settlement risk, enhancing the robustness and resilience of UK payment systems, facilitating continuity of payment services in resolution and the effective supervision of payment systems.

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Payment Systems Regulator confirms how it will regulate payments industry

The Payment Systems Regulator (PSR), which became operational on 1 April 2015, published a Policy Statement on 25 March 2015 which confirms how it will regulate the payment systems industry.

What this means for you

The directions, policies and substantial programmes of work announced will impact on a broad range of players: from challenger banks, building societies and other payment service providers seeking access to payment systems, to the large banks who access them directly, to infrastructure providers and the operators of the systems themselves.

For further information please click here or contact Julia Woodward-Carlton or Abby Green.

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Current Account Switch Service enhancements come into effect for consumers and businesses

Two enhancements to the Current Account Switch Service (CASS), announced in the Chancellor’s Autumn Statement last December, have been implemented by the banking industry:

  • From 1 April 2015, organisations with a turnover of up to £5.5 million can switch their current account provider using CASS. The service was previously only available for small business with a turnover of up to €2 million. The extension of eligibility criteria increases the reach of the service to 99% of the UK’s SME market; and
  • The redirection service, which ensures that any payments accidentally made to the old account are automatically sent to the new account, has been extended to 36 months.

What this means for you

The switch guarantee and redirection service provided by the CASS will now be available to more businesses, charities and trusts, meaning that switching from one bank or building society to another is simpler, more reliable and hassle-free.

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Mobile payment apps usage is on the increase in the UK

Nearly half of people in the UK who have a smartphone or tablet expect to use mobile payment apps over the coming year, according to the ING International Survey on Mobile Banking. However, the highest levels of expected take-up of mobile payment apps in the 15 countries studied were in Turkey, Poland, the US, Italy and Spain.

What this means for you

The data shows a global trend of people using physical cash much less than they did before and this is set to continue. Mobile payment app providers need to ensure this rise is met with high levels of security, as lack of trust was found to be the main reason why some people who took part in the survey had not yet used mobile payment apps.

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