The Payment Systems Regulator (PSR) has set out a strategy to address the lack of effective competition in the provision of infrastructure for Bacs, Faster Payments Service (FPS) and LINK.

These three UK payment systems do not have effective competition for the provision of central infrastructure, according to a market review of the ownership and competitiveness of the infrastructure that supports the three UK payment systems.

According to the PSR, the common ownership and control of both the payment systems and the infrastructure provider are a key concern. It said there is also a need to:

• adopt a common international messaging standard to encourage new entrants, and
• create a competitive procurement process that addresses consumer needs.

The regulator has therefore proposed two measures:

• mandating a competitive procurement process that will enable new infrastructure providers with different technology to enter the market and drive new and innovative products and services.
• adopting a common international messaging standard for Bacs and FPS to lower barriers and encourage new entrants to the market.

These measures will benefit all users, from payment service providers to consumers, by creating a better choice of tailored payment services, the PSR argues.

Payments UK, the UK's trade association for the payments industry, welcomed the proposals. The association's James Whittle said: “As the PSR and the industry now develop and then implement this remedy, the priority will be to put in place an appropriate governance framework that will ensure implementation happens in the best way for customers and UK plc.”