Future of Payments
January 22, 2025
The PSR’s Dan Moore highlights the importance of sustainable commercial models and fair competition to drive innovation and investment in the UK payments sector.
As the UK payments industry begins implementing the National Payments Vision (NPV), the role of regulators in fostering innovation is increasingly important. In an exclusive conversation with Payments Intelligence, Dan Moore, head of strategy, analysis and engagement at the Payment Systems Regulator (PSR), outlines the regulator’s priorities for driving meaningful innovation following its forthcoming review of its strategy.
Moore discusses how the PSR is working to enhance user experience, combat financial crime through smarter data sharing, and foster collaboration across the payments ecosystem. “Innovation should deliver a better customer experience and a more efficient set of payment systems,” he states, underscoring the PSR’s focus on helping businesses overcome barriers to innovation, where it can play a helpful role.
While the PSR is clear about its remit on payment systems, Moore highlights the PSR’s commitment to using its expertise to supporting a dynamic and competitive payments landscape, working closely with industry and other regulators, such as the Bank of England and FCA. This interview provides insights into how the PSR, while working within its remit, is positioning itself as a catalyst for innovation, shaping a future that benefits both businesses and consumers.
Dan Moore emphasises that the PSR’s role in innovation lies in understanding the challenges businesses face and enabling solutions rather than directly driving innovation. “Regulators do not generally drive innovation—businesses do,” he explains. By identifying barriers within the payments ecosystem, Moore explains that the PSR can help unlock opportunities for growth and development, where blockers are within the PSR’s remit.
Key areas PSR is considering include emerging payment system technologies such as blockchain, distributed ledger technology, and central bank digital currencies. Moore stresses the importance of proactively engaging with these innovations to address both their opportunities and challenges for the future.
The PSR is also keen to proactively engage with industry where they see blockers. “If there are aspects of payment systems that aren’t working due to competition or innovation issues, I want to hear about them,” says Moore. By supporting experimentation and ensuring operators are fully engaged, the PSR aims to foster an environment where innovation in payment systems can thrive.
One priority is improving data sharing within the payments ecosystem – working closely with the FCA. Moore sees this as essential for tackling financial crime, enhancing efficiency, and delivering better customer outcomes. However, he acknowledges significant hurdles, including technical, legal, and commercial challenges. “Companies recognise the value of their data and can be understandably cautious about sharing it,” he notes.
To address these issues, the PSR is focused on building trust and removing barriers. “We can play a crucial role by facilitating dialogue and encouraging firms to engage where they see opportunities but face obstacles,” Moore adds. By fostering collaboration and providing support, the PSR aims to drive innovation that benefits the entire ecosystem.
For Dan Moore, the ultimate goal of innovation in payments is simple: to deliver a better experience for users and create more efficient systems. “Innovation must result in tangible improvements for customers, whether through seamless transactions, reduced friction, or enhanced security,” he states. While he is clear about the PSR’s remit being systems, he strongly believes that PSR can support the development of new technologies and methods that make these benefits a reality.
A major opportunity lies in the application of artificial intelligence (AI) and data analytics. Moore highlights the transformative potential of AI in detecting and preventing fraud. “By leveraging the vast amounts of data available, AI can identify trends and scams more effectively than ever before,” he explains. However, he acknowledges the accompanying risks, such as data misuse or over-reliance on automation, and stresses the importance of balancing innovation with safeguards.
Beyond fraud detection, Moore points to broader efficiency gains that could result from better data utilisation. Payment systems, he notes, are fundamentally about transferring data from one point to another. “If we can use and analyse this data more effectively as an ecosystem, we can not only combat fraud but also improve overall efficiency,” he adds.
Innovation must result in tangible improvements for customers, whether through seamless transactions, reduced friction, or enhanced security
Moore also stresses the importance of customer-centric design in innovation. New technologies must not only be advanced but also intuitive and accessible to ensure widespread adoption. He calls on businesses to focus on simplifying processes and delivering personalised, seamless experiences that align with customer needs.
By considering barriers to innovation in the future, the PSR aims to position innovation as a driving force for meaningful change. “Ultimately, innovation in payments isn’t just about new technologies—it’s about improving how people and businesses interact with the system every day,” Moore concludes.
Dan Moore underscores the critical role collaboration plays in addressing challenges within the UK’s payments ecosystem. “Collaboration among stakeholders is essential to unlock innovation,” he asserts. He notes that the PSR actively works to bring together industry players to address shared barriers within its remit.
One area where this collaboration is particularly vital is combating financial crime. Moore points to the implementation of APP (authorised push payment) scam rules as an example. “The process has not been without controversy,” he admits but adds that the PSR has listened to feedback, engaged with stakeholders to fine-tune the rules, and the rules are now delivering benefits to consumers. By identifying barriers to data sharing and showcasing best practices, Moore believes the industry can collectively tackle fraud more effectively. “Demonstrating examples of good practice that can be widely adopted has the potential to create substantial change,” he explains.
The regulator’s collaborative mindset extends beyond the payments industry itself, highlights Moore, offering expertise to others who lead those initiatives. Here, he points to the importance of engaging with government initiatives, such as the digital identity and attributes framework. Digital identity, he says, could be a game-changer for the future of payments. “Countries that have implemented digital identity effectively have seen significant benefits—streamlined payments, greater security, and more trusted experiences,” he notes.
Countries that have implemented digital identity effectively have seen significant benefits—streamlined payments, greater security, and more trusted experiences
A significant factor in driving innovation in the payments sector is establishing commercial models that incentivise investment and support risk-taking. Dan Moore identifies this as a critical focus for the Payment Systems Regulator (PSR). “An effective commercial model is essential for widespread adoption,” he states. Without sustainable financial incentives, innovation can stall, leaving businesses hesitant to develop and scale new solutions.
Moore points to the early success of open banking as an example of how a regulatory mandate can spur innovation. “The initial focus on mandating the nine largest retail banks in the UK and opening up APIs was transformative. It provided the foundation for the progress we’ve seen,” he notes. However, he believes the industry has now reached a point where additional measures are required to drive further advancements. “To push this forward, we need something that offers sustainable incentives for innovators to develop products and make them available at scale. The PSR’s current work on phase 1 of variable recurring payments is an important opportunity to move forward with open banking.”
Balancing regulation with commercial viability is key. Moore highlights the need for a “common set of principles” to ensure fair competition across the payments landscape. This is particularly important for smaller players who may struggle to compete with established firms. “It’s vital that smaller companies have the ability to grow, develop, and invest,” he emphasises, adding that a level playing field is crucial for fostering innovation and diversity in the sector.
Moore encourages industry stakeholders to provide feedback on areas where competition or innovation might be hindered. “If there are aspects of the system that aren’t working, we need to know about them. That’s how we can refine our approach and ensure the ecosystem evolves in a way that benefits everyone.”
According to Moore, the PSR is also focused on ensuring that commercial incentives align with broader industry goals, such as improving customer outcomes and fostering competition. By promoting sustainable models, it aims to create an environment where businesses feel confident investing in innovation, ultimately delivering greater value to users.
As Moore sees it, achieving this balance will be key to unlocking the full potential of the UK’s payments sector. “With the right frameworks in place, we can ensure innovation thrives, competition remains fair, and the entire ecosystem moves forward together,” he concludes.
A significant factor in driving innovation in the payments sector is establishing commercial models that incentivise investment and support risk-taking. Dan Moore identifies this as a critical focus for the Payment Systems Regulator (PSR). “An effective commercial model is essential for widespread adoption,” he states. Without sustainable financial incentives, innovation can stall, leaving businesses hesitant to develop and scale new solutions.
Moore points to the early success of open banking as an example of how a regulatory mandate can spur innovation. “The initial focus on mandating and opening up APIs was transformative. It provided the foundation for the progress we’ve seen,” he notes. However, he believes the industry has now reached a point where additional measures are required to drive further advancements. “To push this forward, we need something that offers sustainable incentives for innovators to develop products and make them available at scale.”
Balancing regulation with commercial viability is key. Moore highlights the need for a “common set of principles” to ensure fair competition across the payments landscape. This is particularly important for smaller players who may struggle to compete with established firms. “It’s vital that smaller companies have the ability to grow, develop, and invest,” he emphasises, adding that a level playing field is crucial for fostering innovation and diversity in the sector.
Moore encourages industry stakeholders to provide feedback on areas where competition or innovation might be hindered. “If there are aspects of the system that aren’t working, we need to know about them. That’s how we can refine our approach and ensure the ecosystem evolves in a way that benefits everyone.”
According to Moore, the PSR is also focused on ensuring that commercial incentives align with broader industry goals, such as improving customer outcomes and fostering collaboration. By promoting sustainable models, it aims to create an environment where businesses feel confident investing in innovation, ultimately delivering greater value to users.
As Moore sees it, achieving this balance will be key to unlocking the full potential of the UK’s payments sector. “With the right frameworks in place, we can ensure innovation thrives, competition remains fair, and the entire ecosystem moves forward together,” he concludes.
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