UK Treasury Creates New Financial Regulator to Even Playing Field

The UK is looking to promote competition in the payment sector by creating a regulating body that will increase transparency and fairness.

The regulator will sit under the UK’s Financial Conduct Authority, and use the FCA’s resources to complete its objectives.

In the UK alone, 17.5 billion payment transactions occurred last year. It’s a huge industry dominated by a handful of players, mostly large banks who wield an unfair advantage over smaller firms. The Treasury believes it is unfair that these banks have the ability to charge consumers and small firms, high fees, block access, and charge for accessing services.

Recognizing this, the new regulating body’s goals are to:

1. Order changes to how payment systems such as Faster Payments or Bacs operate
2. Make it cheaper for smaller banks to access payments systems
3. Investigate and impose fines or other sanctions when rules are broken

It’s an initiative that will try to protect consumers by reducing or eliminating unfair fees, and encourage the growth and quality of services that people will have access to.

According to Financial Secretary to the Treasury, Sajid Javid, “An open and transparent payments system is crucial to give new players freedom to challenge the big banks without unfair barriers. The reforms we are announcing today will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services.”