Shearman & Sterling LLP | FinReg | UK Payments Regulator Paper on Use of Data in the Payments Industry
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  • UK Payments Regulator Paper on Use of Data in the Payments Industry
    Following the publication of a discussion paper in June 2018, the U.K. Payment Systems Regulator has published its response paper on the issue of data in the payments industry. The discussion paper outlined three potential areas where data use could directly affect the PSR's statutory objectives of promoting competition and innovation. These are:
    • Reluctance of end-users to share payments data with third-party providers of other payments-related services (so-called "overlay services"), due to concerns over whether their data will be treated appropriately.
    • Limitations on access to global datasets for potential providers of newer, more innovative payment services, including limited access to the global datasets that would provide valuable information for development of new industry anti-money laundering or anti-fraud measures.
    • Potential barriers that could prevent customers and businesses from getting the benefits from additional "enhanced" data attached to transactions. The benefits from enhanced data include cheaper and more efficient payments processing (leading to cheaper service provision to end-users).

    "Payments data" in this context includes a mix of financial, transactional, behavioral and other types of data, which payment service providers collect in the course of providing payment services to end-users.

    The response paper provides a summary of the feedback that the PSR received to its discussion paper as well as the PSR's response. The PSR confirms that it will work with Pay.UK to assess the ways that data can be used in the U.K.'s new payments architecture (NPA), which is being designed by Pay.UK. Pay.UK is the operator of the Bacs, Faster Payments and Cheque and Credit payment systems.

    View the response paper.

    View details of the 2018 discussion paper.

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