The UK government is considering abolishing the Payment Systems Regulator (PSR) as part of a plan to reduce red tape. Ministers are reviewing whether to merge the PSR with the Financial Conduct Authority (FCA).
Regulatory Overhaul Underway
The decision, expected within weeks, is part of a broader effort to reform Britain’s regulatory landscape. Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves aim to cut bureaucracy and stimulate economic growth.
Recently, the chairman of the Competition and Markets Authority (CMA), Marcus Bokkerink, was replaced by former Amazon executive Doug Gurr. The leaders of the Financial Ombudsman Service have also announced their resignations.
Scrapping the PSR
Jonathan Reynolds, the business secretary, hinted at possible regulatory changes in January. He stated, “We’ve got to genuinely ask ourselves the question: have we got the right number of regulators?”
Reports indicate that the chancellor will conduct a full audit of 130 regulators. The government seeks to ensure these bodies focus on economic growth and efficiency.
Role of the PSR
The PSR, created in 2013 and operational since 2015, oversees the UK’s payment systems. It employs around 160 people and is accountable to Parliament.
However, industry leaders and politicians have criticized its approach to regulation, particularly regarding fraud reimbursements. Some argue that no other major economy has a standalone payments regulator, questioning its necessity.
Government’s Growth Strategy
On Christmas Eve, Starmer and Reeves urged major regulators, including Ofcom, Ofgem, and Ofwat, to suggest ways to reduce bureaucracy. Reeves has since held multiple discussions with regulatory heads to explore reforms.
Despite criticism, many believe the PSR plays a crucial role in a rapidly evolving payments industry. David Geale, its interim managing director, has led the organization since last summer, while Aidene Walsh serves as its chair.
Uncertain Future
The Treasury has declined to comment on the potential abolition of the PSR. The regulator itself has not responded to inquiries regarding its future.
If the government proceeds, merging the PSR with the FCA could mark a significant shift in the UK’s financial regulatory framework. Many stakeholders are closely watching how these changes unfold.
Stay tuned to London Pulse News for further updates on this story and other developments in UK financial regulation.
