How Payment Systems Regulator's abolishment could influence growth

The move has been described as part of the deregulatory agenda of the Government, which so far has seen them remove the previous onshore wind ban, began a ‘root and branch’ review of the water sector, as well as the setting of financial services regulators on a growth agenda.

Prime Minister Keir Starmer said: “This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive-up living standards and get more money in people’s pockets.” 

The Payment Systems Regulator (PSR), originally established by the Financial Services Act in 2013, oversees everything from the designated payment systems such as CHAPS and Faster Payments to the major credit card networks like Visa and Mastercard. 

The expected effect is a reduction in complexity and costs for businesses. Smaller firms should see a larger change with the multiple layers of oversight removed. A single point of contact, by incorporating the PSR into the FCA, should create a process that is simpler and more streamlined. 

However, some stakeholders might worry that the transition creates at least short-term uncertainty. The loss of a specialised payments regulator could also result in a lesser focussed oversight overall.

In a supporting statement Chancellor Rachel Reeves added: “The regulatory system has become burdensome to the point of choking off innovation, investment and growth. We will free businesses from that stranglehold, delivering on our Plan for Change to kickstart economic growth and put more money into working people’s pockets.”