In an already rapidly evolving and vibrant sector, the pandemic has accelerated further changes for the payments sector, with consumers placing increased reliance on the internet and digital communication to pay for goods and services.
Against this backdrop and with the UK now hopefully emerging from lockdown, we cast an eye to the horizon and touch on three developments for the payments sector during H2 2021.
From the 14 September 2021, all participants (issuers, schemes, acquirers and retailers) involved in the online payments ecosystem, will be expected to apply SCA to e-commerce transactions. Any non-compliance after the 14 September 2021 could be subject to the FCA’s full supervisory and enforcement action.
The PSR will publish its final report on the supply of card acquiring services during 2021. This follows the publication of its interim report in which the PSR stated that the supply of card acquiring services was not working well for small and medium sized merchants. For these types of merchants, the PSR identified three areas of concern: on merchant contracts for card acquiring services, on point-of-sale (POS) terminal contracts, and on the difficulty for merchants to compare prices. In order to address these concerns, the PSR identified a number of potential remedies to be aimed at making it easier for small and medium sized merchants to switch to a new provider or better deal, such as:
The PSR is currently considering responses from across the industry to the interim report and the proposed remedies to address the concerns identified for small and medium sized merchants. The final report and remedies to address the identified concerns is due in 2021 and industry participants should keenly review the final report once published.
The PSR is currently consulting on the New Payments Architecture (NPA) Programme, which is the programme to renew the clearing and settlement structure for interbank retail payments. The NPA programme, which is being carried out by Pay.UK (overseen by the PSR), seeks to enable increased participation, encourage greater innovation and competition and improve resilience. As the NPA Programme has been subject to several delays and challenges, the PSR has launched a consultation to tackle the issues impacting the delivery of the programme.
The PSR is due to report in Q4 2021 on the output of the consultation and set out its proposed remedies to address the delays and challenges impacting the NPA Programme. These remedies are likely to be focussed on measures to ensure that:
Should you wish to discuss any aspect of this article, please contact our Payments team who would be delighted to assist.
Contributor: Matt Atkinson (Associate)
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2021. Specific advice should be sought for specific cases. For more information see our terms & conditions.
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