UK payments regulators take grilling
The UK’s Payment Systems Regulator (PSR) lined itself up for quite the bashing as it set out its reviewed objectives for the year ahead.
Stoic? Not much. Most of the difficult questions were deferred to the FCA (not in attendance) or deflected using the convenient buffer of collective regulatory responsibility – that is to say that to address many of the concerns raised, collaboration among the different regulatory bodies is required, namely the FCA and international regulators. Collective responsibility, collective blame.
Dominic Thorncroft, chair of the Association of UK Payment Institutions (AUKPI) said a large amount of the 1,000-plus firms regulated by the FCA are not able to access payment systems. “We heard yesterday that Raphaels Bank, which was meant to come in and provide some service, will not actually be doing that.
“As things stand there are no banks allowing access to these many payments firms, so your aspirations to deliver competition in the market will come to nothing unless this can be addressed properly, and I’m afraid at the moment we are not making any progress at all.” Scathing stuff.
Another disgruntled punter argued: “Basic access to bank accounts are not being provided to institutions that provide payments across the country. It is a case of inclusivity in accessing banking accounts, not necessarily indirect access. Banks are averse to providing accounts to APIs and institutions.”
But that’s fair enough. Everyone loves to harangue a regulator, yet they all turn very much to the regulator for support during anxious times. It was pretty clear, given the questions asked by attendees, that payment industry stakeholders want the PSR to become more of a spokesperson for their concerns in the next couple of years, around Brexit and around incoming European regulation, Payment Services Directive, mark 2 (PSD2).
And within that, the main concern, speaking to stakeholders, is around data protection. Incoming GDPR regulation is very much at the forefront of business strategy.
While they are not worried about commercial opportunities, or indeed being phased out, they are to a certain extent floundering as to how to reconfigure their operations. New regulation stipulates what they cannot do; it’s up to them to figure out what they can. And how.
The complaints, however, were put over with the decorum befitting a parliamentary select committee- exasperation aside, cordiality, deferentiality and diplomacy held sway.
And it must be said, the good grace with which the PSR endeavours to maintain the dialogue, does illustrate a certain commitment to the cause. Payments industry people, hats off to you all.