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Liz Truss, the Conservative frontrunner to be the UK's next Prime Minister, has eyed up a financial regulatory merger, while also making commitments to ensure access to cash remains stable.
If Truss wins the Tory leadership race, which concludes on September 5, she will examine the roles of the Payment Systems Regulator (PSR), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), a source in her leadership campaign has told the UK press.
First reported by the Financial Times, the campaign source said that the leadership candidate wants to focus on economic growth, including a possible merger of the three financial regulators.
Since its inception in 2015, the PSR has garnered criticism from the UK’s payments industry for issues such as the slow development of the National Payments Architecture, and a lack of teeth when it comes to the large card schemes, Mastercard and Visa.
The FCA has not been safe from scrutiny either. It has garnered criticism for failing consumers due to the collapse of mini-bond seller London Capital Finance.
Its workers have also taken industrial action, with affiliated trade union Unite complaining: “The imposition of changes to pay, terms and conditions at the FCA has left thousands of staff worse off.”
“It is frankly disgusting that a public sector employer like the FCA thinks it can behave with such contempt towards its workers,” said Unite leader Sharon Graham.
The City watchdog has shifted towards a consumer protection focus recently, with the rollout of the Consumer Duty next year, which will mean new compliance requirements for payments and e-money institutions when they bring new products to market.
Truss, currently the UK’s foreign minister, is due to win the contest by a decisive majority, in a move that has surprised onlookers.
At the start of the contest, a majority of Conservative parliamentarians backed her rival, Rishi Sunak, who previously served as the UK’s finance minister.
His backers included John Glen, who until recently served as the UK’s minister responsible for payments, including access to cash legislation and the implementation of regulation for the buy now, pay later (BNPL) sector.
Hard cash
At hustings in Belfast that took place on Wednesday (August 17), Truss said that she was committed to ensuring access to cash remained stable in the UK.
“It seems to me some businesses will only accept cash and some businesses will only accept cards,” she apparently told the audience. “But we should make sure that people are able to use cash where they don’t have alternatives. I think that is important.”
Sunak has access to cash credentials himself, considering the work of the Treasury during his tenure as chancellor.
He used his 2021 Mansion House speech to state that: “We’re protecting access to cash, consulting on new laws to make sure people only need to travel a reasonable distance to pay in or take out cash.”
Such laws were introduced to parliament earlier this year through the Financial Services and Markets Bill.
The UK is not the only country in Europe set on introducing better access to cash following the rapid rise of digital payments.
In Spain, the newly adopted consumer protection law allows consumers the freedom to pay in cash and authorities have the power to sanction retailers for refusing payments in cash.
Meanwhile, Sweden introduced a law in 2019 compelling banks that provide payment accounts with basic features to supply places for cash withdrawals.
Belgium, meanwhile, has gone the other way, requiring merchants to provide a digital payments option.
