UK’s Payment Systems Regulator commits to work on VRPs in strategy review

The UK’s Payment Systems Regulator (PSR) has committed to working closely with the Financial Conduct Authority (FCA) to take forward work on the overall framework for commercial Open Banking payments, focusing on the initial phase of Variable Recurring Payments (VRPs), over the next two years.

The PSR made the commitment following the mid-term review of its five-year Strategy.

Since launching its Strategy in 2022, the PSR said it had made “strong progress in delivering positive change”, including introducing protections against authorised push payment (APP) fraud, advancing Open Banking, and reviewing card fees.

Now, the PSR has identified three “core commitments” within its remit for the remainder of the Strategy term, the first of which is completion of the work already underway to protect consumers and support competition.

Over the next two years in addition to focusing on VRPs, the PSR has said it will fully embed its APP fraud reimbursement requirements, including commissioning an independent review, and deliver the outcomes from its card market reviews.

With the Bank of England, the PSR has also promised to progress work to upgrade the Faster Payments system, and reform of Pay.UK, as well as to assess long-term retail infrastructure needs.

It called this work “critical to providing a sound foundation for future innovation and competition in payments”.

Finally, the PSR has committed to increasing its focus on competition and innovation in payments systems by building its innovation capability, and removing unnecessary barriers to payments innovation.

PSR managing director David Geale

David Geale, the PSR’s managing director, said: “We’ve made great progress – especially in protecting consumers through our world-leading approach to APP fraud. But we know there’s more to do.

“By taking ambitious but realistic action, we can ensure payment systems remain competitive and innovative, delivering real benefits for users and supporting economic growth.”

Geale added: “Collaboration with others has been key to our success so far, and it will remain central to how we achieve our priorities. We look forward to working with other regulators and stakeholders across the payments ecosystem to deliver this updated Strategy.”

The review of its five-year Strategy reflects “extensive engagement with stakeholders, trends in payments – both at home and abroad, the Government’s growth mission, and the impact of the National Payments Vision“.

Further reading: PSR issues response to call for views on expansion of VRPs