UK regulators publish feedback statement on big tech and digital wallets

The UK Financial Conduct Authority (FCA) and the UK Payment Systems Regulator (PSR) have issued a joint feedback statement on the usage and impact of big tech and digital wallets (FS25/1). The feedback statement was accompanied by a press release and joint letter to the UK Competition and Markets Authority (CMA) regarding the CMA's invitation to comment on investigations in relation to certain mobile ecosystems. The feedback statement highlights four potential issues around big tech and digital wallets:

• First, there are competition concerns as between different digital wallets (and mobile ecosystems).
• In addition, there are competition concerns as between payment systems within digital wallets, particularly where digital wallets do not provide a choice of payment methods except for cards.
• Operational resilience and consumer rights and protection are an issue, given that reliance on digital wallets could impact the financial system's resilience if consumers do not have other means of payment.
• Finally, there are regulatory perimeter questions around whether the regulatory framework should include digital wallets in order to be more effective (although some responses raised concerns that this approach may hinder innovation).

The FCA and PSR will engage with the CMA on the competition concerns, and have commented on the CMA's strategic market status investigations, which include the CMA's second and third investigations which focus on mobile ecosystems. The FCA will also engage with HM Treasury in relation to the third and fourth potential issues, as part of the review of the Payment Services Regulations and Electronic Money Regulations, as part of tranche three of the UK government's review of assimilated EU law.

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