The Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA) are seeking views on the benefits and risks digital wallets bring to people and businesses.
The use of digital wallets has grown rapidly over the last few years, and it’s likely that more than half of UK adults now use one. With Apple Pay, Google Pay and PayPal being three of the most widely used digital wallets in the UK today, digital wallets have become an increasingly important touchpoint between Big Tech firms and UK consumers.
The regulators are therefore keen to better understand the impact on consumers and businesses that digital wallets’ increasing popularity creates, 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.
David Geale, the PSR’s Managing Director said: “Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too.
“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.”
Nikhil Rathi, the FCA’s Chief Executive, said: “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.
