By Sam Tabahriti
LONDON (Reuters) – Britain’s payments regulator will be abolished and its remit absorbed by another financial regulator, the government said on Tuesday, as it aims to cut red tape in favour of growth.
The Payment Systems Regulator (PSR), which oversees systems including MasterCard and bank transfers, tackles problems such as fraud, excessive fees and lack of competition among banks and payment providers.
The government said its decision to axe the PSR followed businesses complaining that the UK’s financial regulatory system was overly complex due to the country’s three financial regulators – the Financial Conduct Authority (FCA), the Bank of England’s Prudential Regulatory Authority and the PSR.
The payments watchdog will instead be wrapped within the FCA, the government said, providing a single point of contact for businesses and ultimately reducing expenses, particularly for smaller companies aiming to expand.
“This is the latest step in our efforts to kickstart economic growth,” Prime Minister Keir Starmer said in a statement.
In mid-January, Finance Minister Rachel Reeves, who has been under pressure to meet Starmer’s 2024 election promise of faster economic growth, urged Britain’s regulators to develop policies that do not overly burden companies.
She later forced out the chairman of Britain’s Competition Markets Authority, saying he did not agree with her views on how to speed up the country’s slow-moving economy.
In Tuesday’s statement, Reeves described the country’s regulatory system as “burdensome to the point of choking off innovation, investment and growth”.
Nikhil Rathi, FCA Chief Executive, said it was “the right time to put in place a more streamlined regulatory framework”, following recent efforts to improve coordination and clarity on watchdogs’ responsibilities.
“We will work closely with government, the Bank of England and the payment sector as the details of this change are decided and to ensure the transfer of any powers is smooth,” he said in a statement.
(Reporting by Sam Tabahriti, additional reporting by Sinead Cruise, Editing by William James, Ed Osmond and Louise Heavens)
