With its popularity among customers soaring in recent years, both regulators have joined forces and asked for those connected with firms including Apple Pay, Google Pay and PayPal to assist in its “call for information”.
The two bodies want to know the range of benefits the services bring to customers as well as what features hinder the payment methods on smartphones and devices.
The publication is so the PSR and FCA “hear how digital wallets could raise any significant competition, consumer protection or market integrity issues, either now or in the future.”
Companies involved in payment services and developing the technology used to offer the service have until 13 September to respond to the call.
Once the findings are gathered, the two regulatory bodies noted they would provide an update within the first three months of 2025.
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The PSR says it is keen to learn how digital wallets affect a customer’s choice of payment options when purchasing goods in a shop. It also wants to see how this impacts the competition between rival payment providers.
While digital wallets have become an increasingly popular method of payment, half of the UK would still find a cashless society problematic, according to a LINK study.
However, the number of people who feel comfortable with the move into more tech payments has grown by 6% in a year, with over a third (39%) believing they wouldn’t find going cashless an issue.
‘Digital wallets are steadily becoming go-to payment type’
David Geale, the PSR’s managing director believes that while digital wallets are “steadily becoming a go-to payment type” he acknowledges there might be risks too.
Geale said: “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, added: “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.”
