The UK's high value payments system Chaps has slashed 50% off fees for low volume direct participants as it responds to public pressure for fairer access from new market entrants.
Previously, the Chaps funding model was solely based on the volume of payments processed, with each direct participant making a 2% minimum contribution, resulting in a minimum cost of £80,000 per annum in 2014.
The new model now comprises a fixed annual shareholder charge of £30,000 - which is expected to proportionately decline as more participants join - and a system usage charge based on prior year volumes.
As of this year, a low-volume direct participant is likely to be charged an annual aggregate cost of approximately £40,000 - a 50% saving over last year.
Part of the brief of the UK's new Payment Systems Regulator is to provide improved access to payment systems, amid concerns that the current models are holding back competition and stifling innovation.
Phil Kenworthy, Chaps Co managing director says: “We are seeing a greater interest from payment service providers in directly joining Chaps, and we anticipate growth in our direct participation over the next two years as a result of this and other initiatives planned for 2015.”
In 2011, the Bank of England urged the Chaps board to expand direct access over fears about the financial stability of the platform. At the time, Chaps membership consisted of 18 direct participants, a figure which has risen to only 21 over the intervening period.