New payments regulator to help small banks against big rivals

Tim Wallace
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BIG BANKS could lose control of the payments system in 2015, as a new regulator is set up to focus on the issue, the Treasury said yesterday.

Currently the payments system is owned by the biggest banks, and smaller and new banks must pay their larger rivals to access it.

The government fears this could stifle competition in banking and wants the planned new Payments System Regulator to consider other ways of running the system.

The government also hopes it will make lenders more innovative on payments, pointing to countries like Sweden where payments can be made via mobile phones, and the Netherlands where online payments can be made without using card or account numbers.

“The reforms we are announcing will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services,” said financial secretary to the Treasury Sajid Javid.