PSR delivers update on progress of New Payments Architecture
The UK’s Payment Systems Regulator (PSR) has outlined the latest developments to its New Payments Architecture (NPA) programme via its recently published annual plan and budget for 2023/24.
The PSR outlines the future activity of NPA development
The NPA is a proposal for the UK’s payments industry that seeks to better accommodate interbank payments, including the clearing and settlement of payments from one account to another. The initiative aims to consolidate the current systems in use for processing payments, including Bacs, Faster Payments and Cheque and Credit Clearing.
All of these systems are operated by Pay.UK, which is one of the reasons the standards body was selected by the PSR and the Bank of England in 2019 to design and deliver the NPA and an adjoining procurement process for its central infrastructure services (CIS).
So far, the regulator has kept a close eye on Pay.UK’s progress in this area, and has set out its own regulatory framework to mitigate risks to competition and innovation that could arise from a provider’s misuse of the NPA’s CIS.
It also approved two procurement requests put forward by Pay.UK in December last year to enable PSPs to more easily migrate transactions made on the Faster Payments system to the NPA, in addition to a CIS provider.
Now the PSR has come forward to announce how it will continue to guide the advent of the NPA into 2023 and 2024 through its annual plan and budget.
The future of the NPA
It has confirmed its intention to review Pay.UK’s design, funding model and business case via its assurance process. The regulator also plans to review the CIS contract, however, it has yet to disclose any more information regarding the recipient of this contract despite being contacted by FinTech Futures.
And in the spirit of compliance, the regulator intends to engage with Pay.UK and its unnamed CIS provider over the course of the next year to ensure the adherence of both parties’ compliance statements to its regulatory framework for the NPA. In addition to these measures, the regulator will also seek to monitor Pay.UK’s development of its strategy for the future of the Bacs payment system.
As part of this review process, the regulator states: “We want to ensure the NPA will meet our expectations and provide benefits for people and businesses.”
“By promoting innovation and strengthening competition in payment services and between payment systems, the NPA can help provide better value and a more effective choice of payment options for people and businesses,” its statement continues.
“It can also improve the resilience of payments and, by enabling payment messages to include more data, help reduce fraud.”
