The UK's Financial Conduct Authority has created a new regulator for payment systems, to commence operations in April 2015.

The UK's Financial Conduct Authority has created a new regulator for payment systems, with a full operational launch (i.e. the beginning of actual regulation) planned for in April 2015.

The new Payment Systems Regulator is designed to promote competition, development and and to ensure that payment systems take account of and promote the interests of users. The main focus is to be on competition.

The new regulator will set standards, make up rules, do something about access to payment systems, unilaterally change "agreements relating to payment systems," deal with the "disposal of interest in a payment system," and exercise new powers to promote competition.

When money moves between individuals, for example when they buy goods and services, receive income or pay taxes, the transfers are made through what are known as payment systems. These are operated by payment system companies, usually the big banks. Concerns have been raised about access to the UK's payment systems, the fairness of the terms offered for access and the industry’s sclerosis under the present system. The Financial Services (Banking Reform) Act 2013 empowered the FCA to set up a new regulator to shake things up.

The payment systems that HM Treasury has been proposing to regulate (some more relevant to private clients' use than others) are:

• Bacs, an automated payment system used extensively in the UK, typically for making bulk payments such as salaries. Payments are settled between member organisations on a rolling three-day cycle. Nearly 6 billion of these transactions take place a year.

• C&CCC - a system that facilitates the clearing of all cheques and credits in the UK. This involves the physical transfer of cheques and credits and the calculation of the net payments that member-banks make to each other a rolling two-day basis. Three-quarters of a billion of these transactions take place a year - down from nearly two billion in 2001.

• CHAPS - the Bank of England administers this system. It provides for almost instantaneous payments to be made between accounts. It is normally used for large sums of money and customers typically have to pay to use it. Settlement takes place for each transaction in real time.

• Faster Payments System - this is a net settlement system, similar in concept to Bacs. Settlement of payments between members takes place three times daily. Just over half a billion of these transactions take place a year and the volume is rising.

• LINK - this network provides the interconnections underpinning the ATM or cash machine network in the UK. This allows fast connections between members to verify PIN details and ensure secure access to cash in the UK.