An open and accessible payments industry is a top priority

Access to payment systems is essential to create effective competition and innovation in the payment systems market.

We want PSPs who use payment systems to be able to access them on a fair, open and transparent basis and be able to choose the form of access that suits them best. We recognise that different forms of access will suit different PSPs depending on their size, business model, etc.

Therefore, we have focused on promoting a range of access options to allow PSPs to choose the form of access that best suits their circumstances.

There are a number of different ways in which PSPs access payment systems. The interbank operators have produced a guide which gives an overview of the different options currently available for each system.

While models differ across systems, there are generally two ways in which PSPs can get access to the interbank payment systems – directly or indirectly.

Direct access to payment systems

We want to ensure that direct access requirements are objective, open and risk-based, enable fair access and do not unnecessarily or disproportionately restrict PSPs from directly participating in payment systems.

To do this we require operators to publish fair, open and risk-based criteria for access and to report annually on how these criteria are being applied and are working.

In June 2019, we published our fourth report on access to payment systems and the governance of payment system operators in the UK.

Indirect access to payment systems

To improve the ability to get indirect access we also want to increase the amount of information available to indirect PSPs. We require the four main sponsor banks (Barclays, HSBC, Lloyds and RBS) to publish certain access-related information. This includes:

  • an up-to-date description of their indirect access propositions (including the payment systems to which indirect access is offered)
  • the key characteristics of that access and;
  • any eligibility criteria sponsor banks may set for potential customers.

In addition, in July 2016 we published our final findings for our market review into the supply of indirect access to payment systems.

This review allowed us to develop a deeper understanding of the economics of indirect access, the limited choice PSPs may have in securing indirect access and examine whether current arrangements deliver the best results for service-users, such as the fees, service levels and choice offered. The scope of this review covered the interbank systems – Bacs, C&CC, CHAPS, FPS, and LINK.

Our final conclusion was that, although competition in the supply of indirect access appears to be producing some good outcomes, we have specific concerns about the quality of access, limited choice for some PSPs, and barriers to switching. We are seeing developments that, combined with the PSR’s work on access, are likely to address these concerns. We are focusing on encouraging those, rather than intervening directly.

Links and useful information

PSO guide

  • The interbank payment system operators have developed a guide which gives an overview of the different options currently available for each payment system.

Code of conduct for indirect access providers

  • This voluntary Code of Conduct has been established to set out the standards of best practice that an Indirect PSP (IPSP) should expect from an Indirect Access Provider (IAP) for the supply of Indirect Access Services.

Information Hub

  • The industry has developed an Information Hub to improve disclosure and transparency of information for participants in payment systems.

  • We expect the Information Hub to give greater visibility and access to information across all payment systems and sponsor banks. It will make it easier for PSPs to make comparisons across both direct and indirect access offerings and between different sponsor banks.