PhonepayPlus asks Gov to review micropayments

PhonepayPlus, the premium rate services (PRS) regulator, has published a joint letter with representatives of the PRS industry calling on the Government to carry out a review of the UK’s micropayments sector.

The letter is in response to a call for inputs to the Government’s wide-ranging review of the regulatory regime for the UK communications sector, to ensure the regulatory framework in place is fit for the digital age. PhonepayPlus’ letter is counter-signed by telecommunications and PRS industry trade bodies, AIME, MEF and UKCTA.

With micropayments for digital content, such as media, games and virtual gifts, set to boom in coming years, PhonepayPlus and leading PRS industry trade bodies urge the Government to consider whether current regulatory approaches can keep pace with the market and achieve positive outcomes for consumers.

A research report by Analysys Mason for PhonepayPlus, The marketplace for and regulation of micropayment services in the UK (published today), outlines the opportunities and challenges for both consumers and industry in this emerging area, which mark a convergence between the financial and telecommunications sectors. Among the report’s key recommendations is the establishment of a Code of Practice to regulate the provision of, and payment for, low-value digital goods and services, which applies across multiple platforms.

The letter to the Secretary of State also raises the need for clarity on the regulation of micropayments to encourage investment and innovation by industry in the digital content sector – a key aim of the Government’s review. A further study published today by Analysys Mason for PhonepayPlus, Premium Rate Services: International Markets and Regulation, provides a comparative analysis of premium rate service markets and regulation in twenty benchmark countries around the world.

Paul Whiteing, PhonepayPlus’ Chief Executive, said: “As a regulator, we seek to work in partnership with the industry we regulate to achieve positive outcomes for consumers of premium rate services. It is a regulatory model that has served consumers and the market well, with complaints about PRS falling 77% over two years.

“With our research showing that the market and consumers are increasingly making use of micropayments to access content, we believe this Government review is timely. The current legislation is almost ten years old – a lifetime in terms of developments in the communications market – and PRS now has to compete with a myriad of other micropayment mechanisms, with different rules and regulations governing each.

“Both industry and regulator therefore urge the Government to take this opportunity to review the legislative and regulatory framework for micropayments, to both encourage innovation and investment and maintain and build consumer confidence in the market.”