The Joint Regulatory Oversight Committee (JROC) has today published a joint paper setting out five high-level principles for banks and registered third parties to follow when agreeing a premium Application Programming Interface (API) commercial model.   

Premium APIs will allow new open banking products and services to be offered. These include variable recurring payments (VRPs), which present a range of benefits for both businesses and consumers – such as potential cost savings, greater flexibility and control over payments. 

As set out by the JROC in April, promoting additional services, including through premium APIs, is key for the next phase of open banking in the UK. Today’s paper outlines the characteristics of a safe, sustainable commercial model for premium APIs.

This will help ensure the prices banks and other payment providers charge third party providers (TPPs) for open banking services remain competitive and fair, encouraging ongoing development and innovation in a sustainable way, which is safe and mitigates cyber and financial crime.  

The JROC sets out that fees and charges for premium APIs should:   

  1. Broadly reflect relevant long run costs of providing premium APIs
  2. Incentivise investment and innovation in premium APIs
  3. Incentivise take up of open banking by consumers and businesses and use of network effects
  4. Treat TPPs fairly
  5. Be transparent  

What happens next?  

In June, the JROC also announced the launch of two new working groups – the VRP working group chaired by the PSR and the future entity working group chaired by the FCA.  

The JROC expects this joint paper to support the VRP working group in developing a safe and sustainable commercial model for non-sweeping VRPs as a pilot and test new premium APIs. 

Outputs and a timetable of delivery for the working groups can be found in their published terms of reference.