Progress update on PSR’s work

Chris Hemsley, Managing Director of the Payment Systems Regulator (PSR) delivered a speech at last week’s Westminster Business Forum: Payments, policy and regulation – infrastructure, innovation and end-user priorities.  Following feedback from stakeholders on the PSR’s role, Mr Hemsley spoke about the progress the regulator is making in a number of key areas:

• Collaboration across regulators: the PSR is working closely with the FCA, BoE and the government to improve the regulators’ coordination in effecting change in the financial sector.
• PSR strategy: in response to stakeholder feedback, PSR is developing a clearer strategy and intends to publish a draft strategy statement later in 2020.
• Access to cash: in addition to supporting LINK’s commitment to protect the 2016 geographic footprint of ATMs, PSR is working to develop practical and long term sustainable cash access models to better facilitate the cash transition in a way that works for consumers and the UK economy.  The PSR also intends to collaborate with the BoE in its work on wholesale cash distribution.
• New Payments Architecture (NPA): the PSR intends to publish a Policy Statement to explain what bidders, participants and other users can expect from the PSR as the NPA becomes a reality.  The PSR intends to publish a Call for Inputs in the coming days on how some of its competition and innovation concerns could be addressed.
• Preventing fraud and protecting those who fall victim: on APP scams, whilst the PSR welcomed the Contingent Reimbursement Model Code, it is looking at whether this voluntary code is effective in protecting people who fall victim to this type of fraud.  The PSR also wants to see more banks and building societies signed up to the code and acknowledges that more work needs to be done in order to achieve this.  In terms of the PSR’s position, Mr Hemsley confirmed that (1) he supports the principle of using a rule change in the payment systems to introduce protection for consumers; (2) he supports the concept that a bank or building society should be able to recover this cost from another firm, where that firm has failed to take reasonable steps to prevent the fraud from happening in the first place and (3) he does not agree that a mandatory fund to reimburse victims is the right direction of travel.  Mr Hemsley concluded by emphasising the principle that “prevention is better than the cure” and highlighted the introduction of Confirmation of Payee by the end of March 2020.  From this date, banks will have to check the name on the account that someone is paying into, as well as the account number and sort code.