PSR sets out its 2024/25 commitments

What does this mean?

The PSR’s plan focuses on its commitments for 2024/25, structured around the following themes:

Protection

• A key priority for the PSR is to work with the industry to reduce the level of fraud. Initiatives include the implementation of the  reimbursement requirements for authorised push payment (APP) fraud, publishing the second set of APP fraud data, and working with payment service providers (PSPs) on the expansion of Confirmation of Payee coverage.

Competition

• The PSR will later this year publish the outcome of its market reviews on the competition which Mastercard and Visa face in card payments, a final report on cross-border interchange fees, and an interim and final reports on PSR’s card scheme and processing fees market review. If the PSR finds markets are not working well, it will consult on remedies.

Unlocking account-to-account payments

• The PSR commits to clarify the future regulation of open banking, enable the phased expansion of variable recurring payments, as well as engage with stakeholders to understand what support consumers and businesses need to regularly adopt account-to-account payments for retail purchases. The PSR will also continue to focus on next generation payments infrastructure. Including that account-to-account payments provide improvements in fraud detection, access and competition.

Access and choice

• The PSR will review the effectiveness of Specific Direction 12 (SD12) in maintaining access to free-to-use cash machines through the LINK network. It will also publish its research on the barriers consumers face in using digital payments, and set out how it will support the take-up of digital payment methods, including exploring how businesses can offer a wider set of variable payment options.

The PSR will expand its role in supervision and compliance monitoring, as it strengthens its regulatory toolkit and develops new frameworks. Among other actions, the PSR will implement its supervisory approach to enhance oversight of payment systems and operators, as well as develop and implement its compliance monitoring framework to ensure firms meet their obligations.

The annual plan also reflects on the PSR's progress and priorities against its five-year strategy. The strategy was set in 2022 to promote competition, innovation, access, and protection in payment systems and markets.

The PSR will conduct a mid-strategy review this financial year and consider what changes, if any, it needs to make to ensure that payment systems in the UK deliver strong outcomes now and in the future. It will share the views with the Government, as it develops its National Payments Vision.

What do firms need to do?

The PSR’s plans to enhance its supervision and compliance monitoring will naturally cascade down to banking and payments firms. Market participants should consider the downstream impact on their systems and processes, including staff training.

The PSR and other authorities continue to prioritise activities to prevent and tackle payments fraud. With the final APP imbursement rules coming into force in October 2024, all market participants can expect further scrutiny on their data and compliance, and wider operations.

Firms should also closely monitor potential changes on fees and competition, as well as the PSR’s advancements to open banking and new payment methods, including distributed ledger technology, digital wallets, and a potential digital pound. Any changes are expected to align with the Government’s National Payments Vision, due to be published in 2024.

Next steps

The PSR will conduct a mid-strategy review in 2024/25 to consider further potential changes required on its practices against its five-year strategy.