UK Government Proposes Abolition of the Payments Council
The British government has issued proposals that would lead to the UK Payments Council losing its power to govern the payments systems for banks.
Financial services minister, Mark Hoban, said on 19 July that he envisaged a new body that would be directly supervised by market regulators, thereby ending a system under which the banks, as owners of the payments networks, also decide policy.
The government’s published consultation proposes the creation of a new body called the Payments Strategy Board (PSB) to monitor and make recommendations to the payments industry. It would be run by a mixture of senior industry and non-industry representatives, including individuals from consumer groups.
The move follows the Payments Council’s announcement in 2009 that banks and building societies should phase out the use of cheques by 2018. The decision was subsequently reversed last July in the face of opposition from ministers and consumer groups, but had already triggered calls for the Payments Council to be reformed to better reflect consumer interests, and to be directly supervised.
The government said the council’s original decision had caused anxiety for many people, particularly the elderly and those reliant on cheques to conduct their daily business, such as charities, clubs and small businesses.
The consultation period will run until 10 October and the government has requested feedback on the proposals from the payments industry, consumers, consumer groups and trade bodies.