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The UK’s Payment Systems Regulator (PSR) has published a call for views on its proposed approach to supervision, having established a Supervision and Compliance Monitoring division last year.
The PSR is proposing several key initiatives in a new public consultation focusing on its Supervision and Compliance Monitoring division.
Stakeholders now have until June 7 to respond to the call for feedback.
“The PSR has a distinct role in regulating payment systems and the firms that operate them. Through our supervision work, we want to be explicit in setting out our expectations, and in holding regulated firms to account against them,” said Oliver Hanmer, head of supervision and compliance monitoring at the PSR.
Hanmer said that supervision “done well” comes from effective relationships between the regulator and the regulated, with a clear and open channel of communication between the two parties.
“These relationships help us to improve our understanding of the payments sector and ensure that our regulation is targeted and proportionate.”
The division was created to drive compliance with the PSR’s requirements, something that has become increasingly important as the regulator uses its powers to boost competition, increase choice and tackle payment fraud.
The regulator hopes that the new department will improve outcomes for everybody who uses payment systems by deterring and challenging poor practice within firms.
Through supervision and regular engagement, it aims to establish effective, ongoing relationships with the firms it regulates.
This approach will be evidence-based and guided by the PSR's remit and the regulatory framework governing its work, according to the regulator.
The primary focus will be on the PSR’s regulatory relationship with payment system operators, such as Pay.UK, Visa and Mastercard.
However, the consultation suggests that this focus may evolve to include other types of firms if necessary.
A dedicated supervision team within the PSR will manage relationships with supervised firms. This function will complement, not replace, existing PSR functions.
The PSR also plans to provide supervised firms with a set of principles outlining regulatory expectations aligned with its strategic priorities and statutory objectives. These principles are expected to be applied flexibly, considering the diverse aims and needs of different firms.
Supervision will serve as a valuable tool for evaluating the impact of policy initiatives and supporting the PSR’s horizon scanning efforts.
Furthermore, the PSR intends to engage with other regulatory authorities to avoid duplicative activities and, where possible, enhance regulatory efficiencies.
