The Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) in the UK have addressed concerns surrounding competition within the digital wallet market, following a period of rapid growth in digital wallet usage. Digital wallets accounted for 35% of card transactions in 2023, a significant increase from 11% in 2019.
Engagement with businesses and representative groups revealed consumer benefits such as convenience, enhanced security, and increased financial inclusion. However, concerns were also raised regarding the need for improved competition among digital wallet providers and the entry of new players to foster innovation and expand payment options.
To avoid regulatory overlap, findings have been shared with the Competition and Markets Authority (CMA), which is currently investigating Apple and Google regarding their mobile ecosystems. The FCA and PSR will also collaborate with the Treasury during the review of the Payment Services and Electronic Money Regulations to ensure a future-proof regulatory framework.
The regulators affirm their commitment to digital improvements, including open banking and contactless payments, to boost competition and enhance the UK's growth and competitiveness, aligning with the National Payments Vision.