A new arrangement designed to encourage fairer banking took a leap forward last week as the Government announced proposals for introducing competition-focused regulation for payment systems.
To ensure your money is working as hard as possible, compare savings accounts with Propertywide.
A world where the banking sector concentrates on consumers is seemingly just around the corner, following the launch of last weeks consultation, which forms part of the Government’s objective to create a more competitive, consumer-focused banking sector.
“Our banking system is too concentrated. We want new banks on our high streets offering real competition and challenging for better customer service. I am determined to deliver that,” said George Osborne.
Under the proposed changes, a regulator – which will be either the Financial Conduct Authority or another of the existing regulators – will be awarded new powers to ensure that challenger banks have the opportunity to compete alongside their larger competitors.
The payments system regulator will have the power to ensure access to payment systems is on open, fair and transparent terms for all banks, including challengers and smaller players so that all competitors are on a level playing field. This will include price-setting powers.
The regulator will also be able to force payment systems and their direct members to invest to deliver new innovations, offering new services like mobile payments to customers.
It will also ensure that consumer views are fully taken into account when it comes to decisions regarding payment systems such as cheques.
Ownership of payment systems by the big banks will be brought to a close if such action is deemed necessary.
The regulator will cover Bacs, CHAPs, Faster Payments, the cheque clearing companies, Link and the main card schemes (Visa, MasterCard, American Express), and their direct members (the big banks).