Beginning April 2015 a new regulator will oversee the UK payment industry’s systems. As a result, the Financial Conduct Authority (FCA) has requested opinions on the main issues facing the UK payment sector today.
According to the FCA’s finding, the primary issues facing the UK payment sector are reflected in a lack of transparency and innovation. the industry is lead by large banks and firms, and pushes smaller financial institutions to outer rim of the sector, being unable to compete.
“This sector is critical to the economy so it must reflect the needs of people and firms and enjoy their confidence. We need to know if the sector is as open as it should be to new entrants into the market and are consumers getting the best possible deal?” Added Martin Wheatley, FCA chief executive.
The banking reform act of 2013 introduced the new regulator as a subsidiary of the FCA. When operational in April 2015 the newly founded regulator will focus on 3 main objectives:
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· promoting competition
· promoting innovation and
· ensuring that payment systems operate in the interests of their users
The regulator will operate independently from the FCA and will consist of its own proprietary board members and managing director. The regulator and the FCA will work closely together and are already looking into promoting competition in retail banking and reducing the barriers for entry by smaller operations. Currently the FCA is responsible for the conduct supervision of all regulated financial firms in the UK.
The UK payment sector processes over 7 billion transactions a year worth over £75 trillion.