The Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA) have launched a joint call for information on the use digital wallets such as Apple Pay, Google Pay, and PayPal.
The watchdogs are concerned about the explosion of their use in recent years.
The UK regulators are seeking feedback from digital wallet providers, technology firms and users, to explore the impact of digital wallets, which are now used by more than half of UK adults, on consumers and businesses.
The PSR’s managing director David Geale said: “Digital wallets are steadily becoming a go-to payment type and while this presents exciting opportunities, there might be risks too.
“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,” he added.
The PSR and FCA are hoping to understand the advantages that digital wallets offer to users, the potential inefficiencies in payment processes for consumers and businesses, and possible competition, consumer protection, and market integrity issues.
As digital wallets become a part of everyday life, “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,” explained FCA chief Nikhil Rathi.
It follows previous work by the PSR on contactless mobile payments and the FCA’s examination of big tech’s role in financial services.
The call for information remains open until 5 pm on Friday 13 September and the regulators will analyse the responses and issue an update by the first quarter of 2025.