The Payments Council has long been under fire by critics in the industry, with many voicing their disapproval regarding its close links to the banking industry recently. It is believed it was this that prompted the UK Government to make its decision to remove the council, along with its failure to close the cheque clearing system back in 2011.
It is hoped that the new regulator will prompt an increase in completion within the banking industry, which will in turn make room for smaller banks that wish to have more of a presence in the market. The organisation will also be given the power to make the fees paid by banks a great deal cheaper, making the survival of non-mainstream banking groups far more likely.
Sajid Javid, financial secretary to the Treasury, said: "The reforms we are announcing will encourage innovation, [and] ensure that real benefits are passed on to each and every user of financial services."