Increased competition in the financial transactions sector has moved a step closer with the appointment of a managing director of the newly created regulator that will oversee the payments sector and introduce more competition.
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The Payments Systems Regulator (PSR), as the organisation is known, was announced last month and will be operational next April.
Hannah Nixon, who was a senior partner at Ofgem, has been named PSR managing director by the Financial Conduct Authority (FCA).
The regulator wants competition in the sector because most large payment systems are owned by banks and there are concerns that the sector lacks transparency and innovation.
Economic secretary to the Treasury, Andrea Leadsom MP, said: “The government set up the Payments Systems Regulator to increase competition in the banking sector and encourage innovation so that customers can realise the benefits of new technologies.
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“I wish Hannah Nixon great success as the PSR’s first managing director. She has an important role to deliver real change and ensure the payment systems work to promote banking competition in the best interests of consumers.”
With banks currently suffering IT glitches and a negative public perception, some in the industry believe they could soon face competition in other lines of business, such as current accounts offered by other sectors.
Reputation could drive improvements as customers gradually move away if a bank becomes known for poor IT and reliability. Consumers use web-based services, which are trusted and have good IT, every day. If services such as PayPal, eBay, Amazon, Facebook and Twitter moved into banking, they would attract customers. Their systems already contain details about people and businesses and handle monetary transactions.