governance Archives

Payments Industry Policy and Government Round-up

In recent months, the Commonwealth Government has announced a number of initiatives that touch on the world of payments. We are pleased to be working in a collaborative capacity with the government on the topics outlined below. If you would…

A strange brew – regulator releases its final policy statement on UK Payments

The new UK Payment Systems Regulator (PSR) became operational on 1 April 2015 and as reported in the most recent edition of Payments Monitor (APCA's quarterly newsletter), released its first major policy statement, entitled “A new regulatory framework for the payment systems in the UK”. The PSR has laid down a significant agenda. This includes the establishment of the “Payments Strategy Forum” to develop a collaborative industry strategy and effectively replace the UK Payments Council. The payment system is a network and a strong shared vision and collaborative strategy is critical for success. Collaborative bodies, such as Australia's own Australian Payments Council, recognise the need to have forums that bring industry together. However to be successful, the new Strategy Forum will need active industry participation. If industry is only there to assist in the implementation of public policy, then the new Forum will fall short of expectations.

Tough medicine for the UK payments system – but how sick is the patient?

On 13 November 2014, the UK Payments System Regulator (PSR) released “A new regulatory framework for payment systems in the UK”. This document outlines, and seeks feedback on, the PSR’s thinking on its regulatory approach in the lead-up to becoming operational in April 2015. The PSR is a new economic regulator that sits within the Financial Conduct Authority and has broad powers to designate payment systems and impose standards. While on paper, the PSR’s powers are not too dissimilar to those of Australia’s own Payments System Board, at first glance, the 13 November consultation paper suggests a much more invasive, and it could be argued ill-conceived, regulatory stance.

Of payment regulators and payments councils

Try Googling "Payments Council", at least from Australia, and the first entry you get is the UK Payments Council home page, trumpeting its Faster Payments service, its mobile to mobile payments facility "Paym" and its automated account switching service. The next four entries relate to the joint RBA/APCA consultation on, and establishment of, an Australian Payments Council, which is approaching completion with an inaugural meeting later this year. One might be forgiven for assuming that Australia is in the process of establishing the same kind of body that already exists, and appears to be doing quite a good job, in the UK. Now try Googling "Payment Systems Regulator". The first four entries relate to the UK development of a new regulator with extensive powers over retail payment systems. The fifth entry is the home page of RBA's Payments System Board, established more than 15 years ago with (rather less extensive) powers to regulate Australian payment systems. Again, one might be forgiven for assuming that the UK was in the process of establishing a regulatory framework on the long-standing and, according to the Financial System Inquiry (FSI), successful Australian model. Both these assumptions would be wrong. Beware the besetting sin of an information-rich age: analysis by search engine.

Big ideas in a little province

I had the honour and pleasure of recently attending and participating in the Canadian Payment Association’s Payments Panorama 2014, held this year in beautiful Charlottetown, Prince Edward Island. Prince Edward Island is Canada’s smallest province, with a mere 0.5% of the Canadian population and a total area only twice that of the Australian Capital Territory. Yet on this postage stamp gem in the Gulf of St Lawrence, some big ideas concerning the future of Canadian payments were being discussed. By way of background, Canada and Australia share many features and our payment landscapes have some similarities. Both have a long-standing national payments body and a competitive national domestic debit card scheme. Australians and Canadians are enthusiastically embracing new ways of paying, including mobile and contactless. The Government and regulators in both countries have intervened on the fractious issue of interchange fees, though Canada has adopted a more disclosure-based approach than the harder caps found in Australia.