The Payment Systems Regulator, working with the Financial Conduct Authority, published an assessment of the rapid growth of digital wallets and concluded that while wallets deliver clear consumer benefits, there are concerns about competition and market entry that warrant attention. To avoid regulatory duplication, the PSR has shared its competition-related findings with the Competition and Markets Authority. Digital wallets’ share of card transactions increased from 8% in 2019 to 29% in 2023. The authorities identified benefits including greater convenience, enhanced security measures and, for some users, greater financial inclusion, while noting concerns about enabling stronger competition between wallet providers and supporting new entrants to bolster innovation and expand consumer choice in payment methods. The CMA is already investigating Apple and Google in relation to their mobile ecosystems. The PSR also plans to engage with the Treasury through its review of the Payment Services and Electronic Money Regulations to ensure the regulatory framework remains fit for purpose, and said it will continue work on open banking and contactless payments aimed at boosting competition.
Payment Systems Regulator 2025-02-19
Payment Systems Regulator refers digital wallet competition concerns to the Competition and Markets Authority as wallet usage reaches 29% of card transactions
The Payment Systems Regulator, in collaboration with the Financial Conduct Authority, assessed the rapid growth of digital wallets, highlighting consumer benefits but raising competition and market entry concerns. Digital wallets' share of card transactions rose from 8% in 2019 to 29% in 2023. The PSR plans to engage with the Treasury on regulatory frameworks and continue work on open banking and contactless payments to enhance competition.