That infrastructure enables the clearing and settlement of payments, and the transfer of funds. “The regulator found there is no effective competition in the provision of central infrastructure for the main U.K. retail payment systems—Bacs, Faster Payments and LINK,” the PSR said.
The regulator proposed two remedies to inject more competition into the system:
- To undertake a competitive procurement process for future central infrastructure contracts. This will ensure fair, open and transparent procurement of central payment systems infrastructure and will enable new technology providers to enter the market and drive new and innovative products and services.
- To adopt a common international messaging standard for Bacs and Faster Payments to lower barriers and encourage new entrants to the market.
The U.K. payments industry should immediately start implementing those reforms, with the goal of bringing benefits to consumers by 2020, according to the regulator. Work has already started: Faster Payments already has adopted common messaging standards, the PSR said.
“These remedies are another step forward in our strategy to bring about a once-in-a-generation change to U.K. payments,” said Hannah Nixon, managing director of the PSR. “This work will remove barriers to entry, create a competitive procurement process and drive innovation to help meet the needs of all users of payment systems—be they consumers, small businesses, or banks.”
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