The Government has today published a consultation on the future regulation and governance of the payments industry, Mark Hoban, Financial Secretary to the Treasury, has announced. The payments industry, which sets strategy on important payment mechanisms including the future of cheques, is central to the functioning of the economy, yet the Government does not feel it has always responded effectively to the needs of consumers.
The consultation - which forms part of a package of measures announced today that will increase competition and consumer protection in the banking sector - proposes reforms that will protect those who rely on more traditional payment mechanisms by ensuring that consumer concerns are taken into account.
The Government’s preferred option is the creation of a new body - the Payments Strategy Board - to monitor and make recommendations to the payments industry. It would be run by a mixture of senior industry and non-industry representatives, including from consumer organisations. This board would ensure that competition concerns and consumer views would be fully considered as part of the decision making process.
Mr Hoban said:
We need a payments system that responds to the needs of customers and is not just run for the banks. Today’s package of measures is another step by the Government to make sure that the financial sector provides an effective and competitive service to the real economy.
Notes for editors
Today’s consultation comes as part of a package of measures to increase competition and further help to protect consumers, including the sale of Lloyds branches to the Co-operative Bank and additional powers for the Office of Fair Trading to protect consumers in the consumer credit market.
The consultation, which proposes three options for reform of the payments services industry, closes on 10 October 2012. The full consultation paper can be found here: http://www.hm-treasury.gov.uk/consult_setting_strategy_uk_payments.htm
It follows the publication in June 2012 of the Government’s White Paper, which details how the Government will implement the recommendations of the Independent Commission on Banking (ICB). The White Paper can be found here: http://www.hm-treasury.gov.uk/fin_stability_regreform_icb.htm
On 16 June 2010, the Chancellor of the Exchequer and the Secretary of State for Business announced the creation of the ICB, to be chaired by Sir John Vickers. The Commission was asked to consider structural and related non-structural reforms to the UK banking sector to promote financial stability and competition, and to make recommendations to the Government by the end of September 2011.