FCA Wants Your Input On Payment Systems Regulation

Are bad payment systems causing you needless expense, anxiety, sleepless nights, depression or hair loss? Save on therapy bills by contacting the Financial Conduct Authority - free of charge!

That's right. From now until 15 April you can unburden yourself to a professional just by answering the following questions:*

"Question 1: Do you have any views on which payment systems should be considered for designation? If this includes parties other than the UK payment systems listed..., please explain why.

Question 2: Where do you believe competition is effective or ineffective within UK payment systems? 

Question 3: At which level(s) is there potential for competition to drive benefits for service-users, in terms of costs, quality or innovation?

Question 4: What are the main factors impeding more effective competition at each level?

Question 5: What functions do you think need to be performed collaboratively in the industry? How best can this be achieved?

Question 6: Do you think the current ownership structure creates problems? If so, please explain your concerns with the current structure.

Question 7: How might the regulator address any issues with the current ownership structure? Please explain how any remedy, including any alternate model, might address any or all of the issues you have identified and also highlight any potential concerns associated with such alternate ownership.

Question 8: Do you have any concerns about the current governance of UK payment systems?

Question 9: What do you believe is the appropriate governance structure for UK payment systems?

Question 10: How do you access UK payment systems? Please provide details (e.g. direct or indirect, the conditions, fees and requirements for access etc.) for each payment system you have access to and any concerns you may have with your current arrangements. If you do not currently have access to UK payment systems, please provide details on how you participate within the UK payment industry, and detail any concerns or constraints you may have in this regard.

Question 11: For the access you described above (in question 10), are the access terms and conditions (including fees) fair and reasonable? If not, please provide details.

Question 12: Does the access arrangement you currently have limit your ability to compete or impact on the service - users’ experience in any way?

Question 13: If you access payment systems indirectly through a sponsoring agreement with a direct member bank, do you have sufficient choice in sponsoring banks? Would you prefer to access payment systems directly? What do you see as the benefits and risks of doing so?

Question 14: Do you act as a sponsoring bank, providing indirect access to any payment system participant in the UK (please provide details for each payment system you provide access to)? If yes: To whom do you provide indirect access? What are the major risks and costs associated with providing such indirect access? On what basis do you choose whether to provide indirect access? Are there any barriers to becoming a sponsoring bank?

Question 15: What changes to access rules and conditions would you like to see? Are there any alternative routes to gain access to payment systems that you believe should be developed (e.g. a second tier membership to payment system operators)?

Question 16: Do you have any other comments regarding access?

Question 17: What improvements or changes do you believe are required in the provision and use of infrastructure in the UK? We would also be interested in your views on the cost of such changes, for you or for the industry as a whole. What considerations, if any, need to be considered regarding the impact of any changes or improvements on the resilience and re liability of payments systems?

Question 18: What changes, if any, are needed regarding messaging standards in the UK? For example, would the adoption of ISO20022 standards alleviate any concerns or improve any constraints you experience? What timeframe and considerations would need to be taken into account in adopting new standards?

Question 19: What solutions can be developed to increase competition in the provision of infrastructure and/or managed services to support the technical and operational functions of agency banks partici pating in UK payment systems? How can this be achieved, and what will the impact and benefits of this be to your business?

Question 20: Are incentives to innovate clear under current arrangements? Please also include any concerns you may have regarding fee arrangements and the impact of changing fee structures (such as changes to interchange fees).

Question 21: Do any factors limit your ability or incentives, either collectively or unilaterally, to innovate within UK payment systems?

Question 22: What changes, if any, are needed to facilitate a greater pace of innovation in UK banking and payments? Please refer to your previous answers where relevant.

Question 23: What do you believe are the benefits and limitations of collectively driven innovation vs. unilateral innovation?

Question 24: Do you have any other comments or concerns you would like to highlight?

Question 25: What, if any, are the significant benefits you see regulation bringing?

Question 26: What, if any, are the risks arising from regulation of payment systems?

Question 27: How do you think regulation might affect your business and your participation in UK payment systems?

*Conditions apply. Your answers and any supporting material must be sent under an approved cover sheet set out in Annex 1 to the address shown in Annex 2. The FCA's new web page on payment services regulation is here.