Regulating payment and third-party service providers

This chapter evaluates the global, domestic, and regional regulatory and supervisory powers and instruments designed to impose obligations on payment institutions and other payment service providers (PSPs) as participants in payment systems, ensuring their soundness, efficiency, and safety. Most notably, it outlines PSP licensing and authorisation obligations and consumer protection, with a particular focus on payment fraud prevention and anti-money laundering. It also analyses the strengths and limitations of the new frameworks for operational resilience and approaches to managing risk from third-party service providers. The chapter also highlights the risks big tech firms pose in providing payment services and the corresponding shift in the regulatory approach to address these emerging risks.