Bank of England comes good on promise to provide non-banks with direct access to RTGS
19 July 2017 | 9162 views | 0
The Bank of England has extended direct access to RTGS accounts to non-bank payment service providers as part of a wide-ranging effort to inject more competition and innovation into the UK's payments systems.
The widely-trailed move is expected to open up a competitive space which has long been the preserve of the UK's biggest incumbents, providing non-bank PSPs with direct access to the UK’s sterling payment systems that settle in central bank money, including Faster Payments, Bacs, Chaps, Link, Visa, and, once live, the new digital cheque imaging system.
The initiative coincides with the Bank's plans to rebuild its real-time gross settlement platform to accommodate new market entrants and future-proof the network for new technology developments and payment instruments.
BofE chief Mark Carney says the changes will enable non-bank PSPs to compete on a more level playing field with banks and support financial stability through greater diversity with fewer single points of failure.
The Bank is currently consulting with other regulatory and Government bodies to draw up a comprehensive risk management framework to protect the country's payments infrastructure as new providers enter the market. Any new participants will be expected to demonstrate compliance with the rules.
A number of legislative changes also need to complete their passage through Parliament. As a consequence, the Bank’s expectation is that the first non-bank PSPs will join RTGS during 2018.