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Table of Contents

Lead Story

The $7.25 billion settlement proposal: What you need to know

News

Industry Update

New happenings at The Green Sheet

Kate Gillespie
The Green Sheet Inc.

Websites under fire for urging settlement rejection

U.K. rejects payment council for regulator

Virtual currency getting real world attention

Lawsuit claims user authentication patent infringement

Selling Prepaid

Prepaid in brief

Mobile wallets not catching on, yet

Prepaid prescribed for financial health

Views

Fed report shows mobile adoption soaring

Patti Murphy
ProScribes Inc.

Bud break in payments

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Paperwork in the digital age

Dale S. Laszig
Castles Technology Co. Ltd.

PII is not your mother's PCI

Ross Federgreen
CSR

Brobot strikes again

Nicholas Cucci
Network Merchants Inc.

Take command of consumer end-point devices

Mustafa Shehabi
PayCube Inc.

Stand out by being true to yourself

Jeff Fortney
Clearent LLC

Company Profile

National Processing Co.

New Products

Pocket-sized mobile printers

SM-S220i, SM-T300i
Star Micronics America Inc.

Reaching out to Level III clients

ePNBillPay with Level III Enhanced Data
eProcessing Network LLC

Inspiration

Use your emotions, not vice versa

Features

Get your message out, socially

Departments

Readers Speak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

April 22, 2013  •  Issue 13:04:02

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U.K. rejects payment council for regulator

Payment companies in the United Kingdom have until June 25, 2013, to respond to a new plan to end payments industry self-regulation and appoint a regulator for retail payment systems.

HM Treasury, the financial policymaker of the U.K. government, issued a paper titled Setting the strategy for UK Payments in July 2012. The paper offered alternatives for "improving the way that payments strategy is made in the UK" and said the government favored introducing a national Payments Strategy Board to "set strategy" for the industry.

Change in recommendation

However a new policy paper released March 26, 2013, called Opening up UK payments discarded the idea of a payments board in favor of a regulator. The Treasury stated further developments led it to conclude a payment board would not be able to deliver the kind of improvements in the industry the government wants initiated. Those aims would best be delivered by a "new regime of economic regulation" that would "establish a new competition-focused, utility-style regulator for retail payment systems."

The Treasury said it decided on a regulator because of "a series of high profile examples where the self-regulation of financial services ... has been discredited." It added that a payment strategy board "would have been open to strong industry influence" and would not have been capable of tackling payment systems problems the Treasury has identified.

The government also said it is concerned with barriers to competition in the U.K. banking market - primarily the fact that the majority of the payments industry in the U.K. is owned or controlled by just a few banks. "It has become clear that there are significant concerns around the potential for the terms on which competitors can access the payment systems to act as a barrier to entry in retail banking," Opening up UK payments stated. The Treasury said this issue can only be effectively addressed with a new system of economic regulation.

The government also found that "regulatory powers would have been needed to make a payment strategy board effective. Giving regulatory powers to a body that would be susceptible to strong industry influence risks a return of the system of self-regulation in financial services." The government said it will not do that and recommended the Financial Conduct Authority or another existing economic regulator take on the regulatory role for the payments industry.

Proposed regulatory powers

The Treasury recommends the payment regulator be given authority to enforce prohibitions on anti-competitive agreements and refer members of the payments industry to the government's Competition Commission for investigation. Members of the payment system in the U.K. should also be licensed through the regulator, the Treasury said.

The government also believes the regulator should have the power to gather information, issue enforcement orders, impose financial penalties for a data breach, share information with other European governments, create advisory bodies, levy charges on regulated members of the payment system to finance regulation activities, and be able to amend license conditions.

A copy of the government plan for payment regulation and directions on how to comment before the June 25 deadline can be downloaded at www.hm-treasury.gov.uk/d/consult_opening_up_uk_payments.pdf.

For additional news stories, please visit www.greensheet.com and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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