Two United Kingdom regulators have begun gathering information on the benefits and risks of digital wallets for people and businesses.
The Payment Systems Regulator (PSR) and Financial Conduct Authority (FCA) launched a joint call for information “from a wide range of stakeholders,” according to a Monday (July 15) press release.
After analyzing all the responses they receive, the regulators will provide an update by the first quarter of 2025, per the release.
The regulators are launching this study at a time when digital wallets have seen steady growth in use in the U.K. in recent years, with more than half of British adults likely using them today, according to the release.
This trend presents potential risks along with opportunities, David Geale, managing director of PSR, said in the release.
“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,” Geale said.
Nikhil Rathi, chief executive of the FCA, said in the release: “We want to make sure we can maximize the opportunities and benefits for consumers and businesses while protecting against any risks this technology may present.”
To better understand the impact of digital wallets, the regulators are seeking views and evidence about the benefits digital wallets offer, any limitations they may have, their role in unlocking the potential of account-to-account payments, and their potential impact on competition, consumer protection or market integrity, per the release.
Transactions remain the most common use of digital wallets, but the technology is gaining traction for the features it offers beyond making purchases, according to the PYMNTS Intelligence and Google Wallet collaboration, “Digital Wallets Beyond Financial Transactions: A Global Perspective.”
Based on a survey of consumers across the United Kingdom, the United States, Brazil, France and Germany, the report found that 41% of consumers said they would likely use digital wallets to carry out financial transactions in the next year; 40% said the same of storing and accessing payment methods; and 29% said they would use the technology for age or identity verification.
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