Challenger banks and Payment Service Providers (PSPs) now have direct access to the UK’s Faster Payments system, with the firm launching its ‘pre-funding’ settlement model that is designed to guarantee settlement between all participants without any shared risk.
Making payments easier
Faster Payments specialises in creating more efficient mobile, internet, telephone and standing order payments. Launched in 2008, over five billion Faster Payments have been sent during its seven years in operation.
The pre-funding model already has 11 participants that connect directly to the service; while a further 400 PSPs access the service indirectly through sponsor banks. The service is now open to small participants, including challenger banks, whereby they are no longer obliged to underwrite a share of transactions that are carried out by large banks.
Smaller participants will be able to leave a cash deposit sufficient to cover their net transactions, inside a Bank of England interest bearing account.
‘Vital part of any challenger bank’s proposition’
‘‘Today’s customers expect their payments to be made in real-time, 24 hours a day seven days a week,’’ stated Craig Tillotson, chief executive of Faster Payments.
‘‘Access to Faster Payments is a vital part of any challenger bank’s proposition – our introduction of a simpler settlement system is another big step forward in maintaining a stable financial system and supporting greater competition in banking.’’
Tillotson revealed that three challenger banks have already signed up to the settlement model but will remain anonymous until ‘‘until their respective launch plans are finalised.’’
Faster Payments has recently been making a number of partnerships, particularly with PSPs.
In August, Payment Eye reported that Access Pay has become one of only eight providers to secure its commitment to the Faster Payments New Access Model.
This tool enables PSPs to choose from a range of more flexible models and providers for technical support. The creation of this model coincides with its pre-settlement feature, with Tillotson stating that a range of PSPs are in negotiations to sign up to the access model.
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