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The reforms, which will be implemented via amendments to the Banking Reform Bill, will ensure that new players can access payment systems in a fair and transparent way, competing with them on a more level playing field.
The new regulator will sit under the FCA, taking advantage of its existing regulatory and financial services knowledge and relationships. It will have a specific objective to promote competition in the banking sector and will be able to:
The government’s response to its consultation, Opening up UK payments, has also been published today. It lays out the government’s plan to reform the governance of the current payments systems to deliver one that works for all users and ensures better results for the end consumer.
The government wants the new regulator to help remove the barriers for new entrants, increasing competition, incentivising all market participants to improve services and reducing fees for consumers.
Financial Secretary to the Treasury, Sajid Javid said: “The government is determined to open up competition in the banking sector so that it serves the needs of the British economy, businesses and customers. An open and transparent payments system is crucial to give new players freedom to challenge the big banks without unfair barriers. The reforms we are announcing today will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services.”