Payments regulation

Topic Guides

Payment services and systems are essential to the functioning of the real economy, as they provide the means by which funds are transferred between consumers, businesses and financial institutions. At a global level, the payments landscape is evolving rapidly as a result of technological innovation and other market and regulatory developments.

This topic guide provides information on various national and international laws and rules that regulate payment services and payment systems as well as general information on key market developments.

Inside this Topic Guide

Topic overview

The reliable and robust provision of payment services is essential to the functioning of the real economy. At their most basic, payment services are the means through which funds are transferred between consumers, businesses and financial institutions. In an increasingly digitalised world, electronic payments are becoming more prevalent whilst use of cash is on the decline. The rise of innovative payment services is being driven by technological advancements as well as by customer demand for more flexible and efficient ways of making payments. Payment systems, which are the financial market infrastructure underpinning the provision of payment services, have also become digitalised over the past few decades.

Provision of payment services is regulated in many advanced economies. As technology continues to develop and the payments landscape continues to evolve, policy makers are also considering how the regulatory framework for payment services may need to be updated to keep pace with innovation and other changes. Some areas of focus include financial exclusion risks for those unable to access digital payments easily, competition and anti-trust issues, operational resilience, cyber risks, anti-money laundering and the use of data in payments.

Clifford Chance contacts

Europe

Amsterdam

Marian Scheele

Frankfurt

Marc Benzler

London

Milan

Alberto Claretto Assandri

Paris

Frédérick Lacroix

EU payment services

Registration required

You need to be a registered user to see the full content of this page.

Log-in or register

UK payment services

Registration required

You need to be a registered user to see the full content of this page.

Log-in or register

Payment systems

International | EU | UK

International

Committee on Payments and Market Infrastructures (CPMI) and International Organisation of Securities Commissions (IOSCO)

CPMI webpage | CPMI principles, recommendations and guidance | IOSCO website

(13 July 2020) CPMI Stage 2 Report to the G20: Enhancing cross-border payments: building blocks of a global roadmap | Technical background report | Press release
(December 2014) CPMI/IOSCO Assessment methodology for the oversight expectations applicable to critical service providers - clarifies guidance on FMI's critical service providers against oversight expectations in Annex F of the April 2012 Principles for both supervisors and service providers
(December 2012) CPSS/IOSCO Principles for financial market infrastructures: Disclosure framework and Assessment methodology
(April 2012) CPSS/IOSCO Principles for financial market infrastructures - Sets of Principles on organisation of FMIs, credit and liquidity risk management, settlement, central securities depositories and exchange-of-value settlement systems, default management and responsibilities for supervisors. Replaces 2001 Principles | (August 2015) CPMI/IOSCO report on application of principles

EU

ECB Regulation on SIPS

ECB Regulation No 795/2014 (ECB/2014/28), amended by ECB Regulation No 2017/2094 (ECB/2017/32), on oversight requirements for systemically important payment systems implements the CPSS-IOSCO principles and defines systemically important payments systems (SIPS) for the eurozone and specifies oversight requirements for SIPS. Applies to systems operated by central banks and private operators | Consolidated version dated 6 December 2017

Entered into force 12 August 2014. Applied from 21 August 2015. Four SIPS identified by ECB: TARGET2, EURO1, STEP2-T and CORE(FR)

(26 July 2019) Decision of the ECB (ECB/2019/25) on the procedure and conditions for the exercise by a competent authority of certain powers in relation to oversight of SIPS | Response to the consultation on the draft Decision | Published in the OJ 16 August 2019 (Decision EU 2019/1349)
(15 June 2018) ECB methodology for payment systems

UK

(July 2020) HMT Payments Landscape Review: Call for evidence - closes 20 October 2020 | Webpage
(July 2018) Memorandum of Understanding on Payment Systems between the Bank of England, FCA, PSR and PRA

Payment Systems Regulator (PSR)

The PSR regulates payment systems designated by HM Treasury as systemically important under s. 185 Banking Act 2009 | Current list. Itis an independent regulator operating as a subsidiary of the FCA, has competition objectives and concurrent powers with the Competition and Markets Authority (CMA) and works to promote innovation, particularly in relation to infrastructure. It became fully operational on 1 April 2015.

Legal basis

Established under the Financial Services (Banking Reform) Act 2013:

See also Financial Services (Banking Reform) Act 2013 (Commencement No 1) Order 2014 (came into force 1 March 2014) and Financial Services (Banking Reform) Act 2013 (Commencement No 4) Order 2014 (came into force 1 April 2014).

Key documents

Market reviews

Market reviews
(28 July 2016) Final report: Market review into the ownership and competitiveness of infrastructure provision (MR15/2.3) | Factsheet | Press release
- (25 February 2016) Interim report: market review into the ownership and competitiveness of infrastructure provision (PSR MR15/2.2) | Press release
- (25 March 2015) Draft terms of reference
(21 July 2016) Final report: market review into the supply of indirect access to payment systems (MR15/1.3) | Press release
- (10 March 2016) Interim report: market review into the supply of indirect access to payment systems (PSR MR15/1.2) | Press release
- (25 March 2015) Draft terms of reference

Consultations and responses

(29 July 2020) PSR launches engagement on development of a long-term strategy | Strategy webpage | Initial consultation on innovation and future payment methods theme
(5 March 2020) Review of existing Directions: response to consultation CP19/3 on draft Directions (RP20/1) | Press release | Webpage | Factsheet
(28 January 2020) Call for input: competition and innovation in the UK's New Payments Architecture | Webpage | Press release

External materials

(15 May 2017) House of Commons Library, Briefing Paper: Payment Services Regulator

Payment Strategy Forum

The Payment Strategy Forum was established by the PSR in October 2015 to develop a strategy for payment systems in the UK. It was disbanded in December 2017 having fulfilled its remit.

(July 2017) Blueprint for the Future of UK Payments | Builds on 2016 report and sets out proposals for developing a new payments architecture (NPA), consolidating the interbank operator governance of Bacs, Cheque & Credit Clearing Company (C&CCC) and Faster Payments Scheme (FPS) into a single consolidated payment system operator (PSO), and measures on financial crime
(29 November 2016) A Payments Strategy for the 21st Century: Putting the needs of users first - final report on future UK payment strategy | Press release

Bank of England

Payment and settlement webpage
(14 July 2020) RTGS System and CHAPS Annual Report
(6 July 2020) CHAPS Enhanced ISO 20022 Messages - Industry Review
(December 2019) Access to UK Payment Schemes for Non-Bank Payment Service Providers
(9 October 2019) Financial Policy Summary and Record of the BoE's FPC meeting on 2 October discussing, among other things, principles to guide prudential regulation and supervision of payments activities
(July 2019) A brief introduction to RTGS and CHAPS

Pay.UK

Formerly the New Payment System Operator (NPSO), Pay.UK is the UK's retail payments authority tasked with providing retail payment services, rules and standards.