The Government is to create a Payment Systems Regulator, giving retailers hope that it will help tackle the high fees they pay to process transactions.
The regulator will be responsible for increasing competition in the payments sector, ensuring that new players can access the payments system in a fairer and more transparent way and decrease the hold of the big banks on the sector.
British Retail Consortium director general Helen Dickinson said it was a “bold step” by the Government.
“Its first focus should be reducing excessive and anti-competitive card fees,” Dickinson said. “Reducing these fees would support the UK retail industry, boosting our ability to invest and innovate while continuing to deliver low prices and great value to customers.
“To benefit consumers effectively, the new body will need the right people and organisations represented on its board, including relevant businesses. We look forward to working closely with Government and the Payment Systems Regulator to support these developments.”
The regulator’s main focus will be on making payment systems faster and cheaper for smaller banks to access payments systems, while it will investigate and impose fines when rules are broken.
Financial secretary to the Treasury Sajid Javid said: “An open and transparent payments system is crucial to give new players freedom to challenge the big banks without unfair barriers. The reforms we are announcing today will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services.”
The regulator will report into the Financial Conduct Authority, which will support it through its regulatory and financial services knowledge.