PS25/6: Decision to revoke Specific Directions 4 and 4a

We have published our decision to revoke Specific Direction 4 (SD4) and Specific Direction 4a (SD4a). We have given a Specific Direction to LINK to that effect which will come into force on 25 August 2025.

We have also published our decision to revoke Specific Direction 2 (SD2) and Specific Direction 2a (SD2a). We have given a Specific Direction to Pay.UK to that effect which will come into force on 27 August 2025.

Background

As the interbank payment system that enables individuals to take cash out of their bank accounts, LINK connects the network of ATMs in the UK. SD4 (as amended by SD 4a) mandates that any future central infrastructure services for LINK in place on or after 2 October 2031 must be provided under competitively procured contracts.  

We introduced SD4 in June 2017, as one of the remedies imposed following our market review of payment infrastructure provision. LINK completed its competitive tender in time to meet the revised deadline, and Vocalink was awarded the contract in October 2021.

LINK wrote to us in June 2024 requesting revocation of SD4. We exchanged letters with LINK to understand its rationale for intervention. In June 2025, we engaged with interested parties ahead of formally consulting on the proposed revocation of SD4 (and SD4a). In our public consultation CP25/2, we explained that due to changes in market conditions, we considered that a competitive tender obligation, as required by SD4, may no longer be an effective way to address the competition issues we found when we introduced it.  

SD4 consultation outcome and decision to revoke SD4 (and SD4a)

The UK's payments ecosystem is at a pivotal moment. After carefully reviewing and analysing stakeholders’ responses to our consultation on the proposed revocation of Specific Direction 4 (SD4) (and SD4a) we have decided to go ahead.   

We have assessed that mandating a competitive procurement process is no longer the best way to deal with the risks presented by a lack of effective competition for the provision of critical payment infrastructure for LINK. It would significantly increase cost, and an alternative viable bidder likely does not exist.  

Our approach aims to ensure that LINK and its members have the regulatory clarity they need to focus on their longer-term sustainability and the delivery of an efficient network. Our outcome-based approach will allow them to focus on investment and innovation and the delivery of a resilient ATM network and an efficient ATM estate, underpinned by a value for money payment infrastructure.    

Our decision to revoke SD4 (and SD4a) is one of the steps we are taking to shape a more flexible regulatory environment that supports competition and economic growth. 

Next steps  

We will continue monitoring and evaluating changes to market conditions and their impact on the UK’s retail payment infrastructure. This work requires engagement with LINK and Vocalink and we may adapt our supervisory approach as appropriate.  

We will work closely with Bank of England, the FCA, the CMA and other stakeholders to take prompt actions to mitigate any risk to our statutory objectives.