The chief executive of the UK's payments watchdog has indicated that the formal abolition of the regulator is unlikely to occur before the first quarter of 2027, as mounting criticism targets the sluggish pace of reforms within the financial payments sector.
Timeline for Regulatory Change
David Geale, the managing director at the Payment Systems Regulator (PSR), addressed MPs on the Treasury Committee, clarifying the anticipated timeline for the body's dissolution. He emphasised that he has "not seen the outcome" of the Treasury's ongoing consultation regarding the payments regulator and remains unaware of "the exact timings of the bill" required to enact the abolition.
"I am anticipating it's not going to be any earlier than the first quarter of next year," Geale stated during the parliamentary session. This announcement follows the landmark policy declaration last year by Sir Keir Starmer and Rachel Reeves, who championed the PSR's abolition as a strategic move to stimulate economic growth and reduce what they termed "unnecessary regulation."
Government's Payments Overhaul
Subsequent to the initial announcement, the Chancellor unveiled the government's National Payments Vision (NPV), a comprehensive initiative designed to overhaul the payments landscape. At a recent London conference, Geale revealed that the government plans to publish a Payments Forward Plan within the "next couple of months," which is expected to outline a detailed roadmap of initiatives supporting the NPV's objectives.
Criticism of Slow Progress
Despite these plans, industry stakeholders have expressed frustration over the perceived lack of tangible progress. When questioned by lawmakers on whether any "practical difference" has been observed since the announcement that the PSR would be consolidated into the Financial Conduct Authority (FCA), Geale conceded that staff were "largely doing the same thing."
"I would anticipate as we consolidate further into the FCA there will be some efficiencies," he added, noting that some cost savings have already been achieved by not replacing senior colleagues who have departed the regulator. The PSR's annual budget stands at £28 million, which Geale expects the organisation to come "reasonably under" this year.
Industry Perspectives
At the City and Financial Global's Payments Regulation and Innovation Summit, Natalie Lewis, chair of the event and head of payments at Travers Smith, acknowledged recent regulatory advancements but highlighted ongoing industry impatience. "We still seem to be waiting for something to happen," Lewis remarked, applauding progress while suggesting the sector awaits more decisive action.
Echoing this sentiment, The Payments Association, which serves as the industry body for the payment sector, commented last year that current developments resemble more of a "reshuffle than a reform," underscoring calls for more substantive changes to drive innovation and efficiency in UK payments.
