Financial officials in the United Kingdom are laying the groundwork for a new regulator charged with overseeing the £75 trillion payment systems industry.

The Payment Systems Regulator (PSR) was incorporated last month as a subsidiary of the Financial Conduct Authority, with plans to have the new agency fully operational by April 2015. The Banking Reform Act of 2013 authorized the Financial Conduct Authority (FCA) to create the new regulator to address concerns about access to U.K. payment systems, terms offered for access to the systems, and innovation within the industry. The overarching goals are to boost both competition and innovation in the payment services sector, according to information released by the FCA.

The industry accounts for roughly 7 billion transactions a year between customers and businesses, the FCA said.

“This is a vital sector for the U.K. economy with businesses and consumers dependent on it. They expect it to work effectively and in their interests,” Hannah Nixon, newly appointed managing director of the PSR, said in a statement. “There is a lot of work ahead , both to ensure that the regulator is ready to hit the ground running and that it starts to address the big challenges the industry faces around continued transparency and encouraging competition in the market.”

Nixon previously served as a senior partner at Ofgem, the U.K.'s Office of Gas and Electricity Markets. She begins her job as managing director of PSR on 14 July.

The new agency is a separate legal entity, with its own board and managing director, while FCA will provide staff and other assistance. Martin Wheatley, the FCA's chief executive, will be on the board of the new regulator along with other FCA directors. John Griffith-Jones, chairman of the FCA's board, also will serve as board chairman for the new regulator. The authority said PSR will be “a competition-focused, utility-style regulator,” similar to Ofcom, the U.K.'s independent regulator of the communications industries.

The FCA listed three objectives for the new authority:

·         Promoting effective competition, both for payment systems and services provided

·         Promoting development and innovation in the market

·         Ensuring payment systems are run  and developed with service users' interests in mind

The regulator will be able to produce standards, impose required rules, mandate access to payment systems, alter agreements relating to payment systems, and oversee the disposal of interest in a payment system. The PSR will share competition powers with the U.K.'s Competition and Markets Authority.

Earlier this year the PSR put out a call for input from stakeholders, with responses due last month. From now until September, officials will look at the responses as they assemble a draft annual plan and budget, as well as its regulatory approach, fees, rulebook, and priorities. Formal consultation on the larger issues, including rules and fees, will take place in September and October, the agency said.

The FCA said the Treasury will decide which payment systems will be regulated. The scope of the regulations will include operators of payment systems, infrastructure providers, and payment service providers like direct member banks. The FCA noted that some firms may be subject to both the new regulator as well as existing EU-wide payment services regulations, implemented in 2009.   

Andrea Leadsom, economic secretary to the Treasury, said Nixon will play an important role in ensuring the new regulator delivers “real change.”

“The government set up the Payment Systems Regulator to increase competition in the banking sector and to encourage innovation so that customers can realize the benefits of new technologies,” Leadsom said in a statement.

The FCA has a Firms Helpline to answer questions on the new regulator.

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