With digital wallets now the go-to payment method for adults worldwide, the Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA) are joining forces to investigate how they could impact the UK’s financial ecosystem.
Apple Pay and Google Pay have become two of the most widely used digital wallets in the UK, leaving some wondering how big tech firms’ increasing influence over UK finance will ultimately impact people and businesses.
Due to the popularity of the payment method, the FCA and the PSR are hoping to gain a better understanding of the impact on consumers and businesses that digital wallets’ create, including:
- the range of benefits that digital wallets bring for service users
- whether there are any features that mean payments don’t work as well as they could for consumers and/or businesses
- their role in unlocking the potential of account-to-account payments and how they could impact competition between payment systems; and
- whether digital wallets could raise any significant competition, consumer protection or market integrity issues, either now or in the future.
“Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too,” said David Geale, managing director at the PSR.
“Collaboration between regulators and working with industry is crucial to ensure we’re on the front foot to support innovation and competition, making sure everyone benefits from access, protection and choice in payments.
We look forward to hearing views and evidence from a wide range of stakeholders throughout this process.”
Both of the regulators are interested in hearing from stakeholders across the payments and wider financial services landscape, including digital wallet and technology providers, as well as their service users and other parties with an interest in digital wallets.
The call for information will remain open until 5pm on Friday 13 September. The PSR and FCA will analyse all responses received and provide an update later in the year.
Nikhil Rathi, chief executive at the FCA, commented:
“The UK is seeing a seismic shift in how people pay, as digital wallets become a part of everyday life for many people. We want to make sure we can maximise the opportunities and benefits for consumers and businesses while protecting against any risks this technology may present.
The regulators will consider all feedback received and provide an update by Q1 2025.”
