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PSR paper on how payments data is used

The UK's Payment Systems Regulator (PSR) has published a discussion paper on how data is collected, used and shared in the payments industry. It identifies three key areas it needs to explore in more detail. The PSR's Hannah Nixon said: “The UK’s payments sector is rapidly evolving and data is becoming increasingly important. Every time you make a payment or withdraw money, you generate data.”

The rapidly evolving use of data – which is changing as the rules of regulation such as PSD2 take effect – presents opportunities and risks for payment service providers (PSPs) and the people and organisations that use payment systems. This will also create new business models and improve access for new entrants into the sector, stimulating competition and innovation, as well as enhance the detection of financial crime. The PSR's statement added: “On the other hand, the increased commercial use of data could influence how companies gain competitive advantage, which could have implications for end users in terms of the range or quality of services offered.

The three areas identified for greater focus are:

  • Concerns about sharing data with third-party payment service providers. The PSR says this could slow the development of innovative products and services.
  • Potential providers of new services may have limited access to data about transactions across a whole payment system ('global' datasets), including data that may help develop new ways to fight fraud and other financial crimes within the system
  • There are potential barriers that could stop consumers and businesses getting the benefits from additional ‘enhanced’ data attached to transactions. This data could make processing payments cheaper and more efficient, leading to cheaper services.

The discussion paper, Data in the Payments Industry, is available on the PSR website and the PSR will receive feedback until 5pm on 3 September 2018.

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