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 those 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 best suits them.
Currently payment service providers (PSPs) can access a payment system through either direct access (where they have a direct relationship with the payment system operator) or indirect access (where a direct PSP acts as their sponsor).
PSPs with significant payment volumes usually prefer direct access. Smaller firms and non-banks typically rely on sponsor banks for their indirect access.
We want to see both forms of access improved and explain how we intend to do this in our Policy Statement.
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. Many of our stakeholders have said this is currently not the case.
Acting on their concerns we have taken a number of steps. 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.
On 15 December 2015 we published a report on access and governance, summarising the progress operators have made to create more open and flexible direct access to payment systems, and inclusive and more transparent governance. Read the report.
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, including 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.
On 1 September 2015 the trade group, Payments UK, working with the largest providers of indirect access, published a code of conduct setting out a range of measures and commitments to improve indirect access to payment systems. We welcomed the code. Read our response.
On 13 November 2015 Payments UK published a consultation seeking further views on the potential effectiveness of the Code and its scope. Responses to this consultation will feed into a review of the Code by Payments UK in early 2016, and will also be shared with us to help inform our work on indirect access.
Improving access to payment systems is a priority for the PSR so we encourage all interested parties to actively participate in this consultation, which will contribute to better indirect access to payment systems. The consultation can be found on the Payments UK website.
The industry has developed an Information Hub to improve disclosure and transparency of information for participants in payment systems - which the PSR supports.
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.
Better technical access
We support the development of technical access solutions and believe the industry is best placed to do this to meet the needs of PSPs and end-users.
We anticipate that technical access solutions will be developed as commercial propositions funded by those that use the service. We will therefore continue to engage with the industry on the development of technical access solutions – an issued identified by a number of indirect PSPs.
We want operators (as part of their compliance with their access obligations) to develop suitable accreditation processes to better enable third party service providers to provide technical access to PSPs.
In-depth market reviews
Additionally, in our November consultation we announced that we would be undertaking a market review into the supply of indirect access 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 will cover the interbank systems – Bacs, C&CC, CHAPS, FPS, and LINK.
This market review will also evaluate the need to take further steps to promote access to payment systems.