Keep Calm and Carry On Paying

As a result of Covid-19 the Payment System Regulator (PSR) has updated its expectations regarding the timing of some of its workstreams, with the current focus being to ensure that payment systems continue to work for everyone and that adequate protections are maintained for those making and receiving payments during this time. This is particularly important given there has been a push for more people to use contactless and card-based payment methods, whilst there being a recognition of the need to protect the supply of cash for those who do not have access to other means of payment. In that respect, the PSR has been working with other stakeholders to ensure the continued access to cash for consumers who need it or want it.

PSR programme of work

The PSR was established in 2015 to regulate the systems used in the UK to facilitate payments. In order to fulfil its role, the PSR was given a number of functions and powers, and like the other UK financial services regulators, has an ongoing programme of work as set out in its annual business plan.

In relation to Covid-19, the PSR has confirmed that it has been working together with the government, Bank of England, Financial Conduct Authority and Competition & Markets Authority to provide industry with guidance and coordinated support during the pandemic. The PSR has also established a webpage where Covid-19-related updates will be published.

PSR’s 2020/2021 Business Plan

The PSR’s 2020/2021 Business Plan was drafted before the disruption caused by Covid-19, with the key projects being a continuation of existing work:

  • Support of Pay.UK’s development of the New Payments Architecture to deliver a resilient digital payments platform to benefit payers and payees
  • Continued access to cash and ATM networks for those who still use cash in an increasingly digital world
  • Assessing whether the market for card-acquiring services works well and is supported by effective competition
  • Continued work to prevent authorised push payment scams and implementing a framework to protect victims
  • Assessing whether Payment systems and markets are more competitive and/or can deliver better outcomes for users
Change in focus following Covid-19

However, as a result of Covid-19, the PSR recognises that businesses should be focusing their efforts on supporting their customers as best they can at this difficult time. Whilst none have been particularly significant, the PSR has taken a number of actions to help support businesses’ efforts in getting through the Covid-19 pandemic:

  • The call for input on the PSR’s Competition and Innovation in the UK’s New Payments Architecture was extended from 24 March to 1 May.
  • Banks required to implement the Confirmation of Payee (CoP) obligations by 31 March have been told that in order to maintain the resilience of the banking industry at the present time, if they were unable to fully implement CoP by the deadline, they should still take appropriate steps to roll it out, even if it takes them past the end of March.
  • The PSR also set out its expectation that customers who would have benefitted from the timely implementation of CoP should not otherwise be disadvantaged by any Covid-19-related delay, including that banks should provide refunds for victims of fraud if timely implementation of CoP would have prevented the fraud from happening.
  • Increasing the speed with which the PSR pays its own suppliers.
What’s happening next?

These developments are welcome, and show a degree of pragmatism by the PSR in helping businesses during this unprecedented period. The PSR has confirmed that if and when circumstances develop further, they will look to take additional actions as appropriate.