We are consulting on ways to reduce risks to the successful renewal of the UK’s interbank payment systems and proposals to mitigate risks to competition and innovation.   

What is the NPA?

The NPA is the payment industry’s proposed way of organising the clearing and settlement of most interbank payments (payments that are made from one bank account to another) in the future, including those that currently use Bacs and Faster Payments. Pay.UK, the operator of Bacs and Faster Payments, is responsible for delivery of the NPA.  

Why is the successful delivery of the NPA so important?

Each year, millions of us collectively make billions of interbank payments worth trillions of pounds. Whether receiving wages or paying bills (via Bacs/Direct Debit), or using a smart phone to send money to a friend (via Faster Payments), interbank payments are essential to the smooth running of our day-to-day lives and the functioning of the UK’s economy. Getting the NPA right is therefore hugely important. 

The NPA represents a significant opportunity to meet growing demand for digital payments, further improve resilience and support increased competition, to benefit people and businesses across the UK.  

What are the risks we’re concerned about?

We think that, currently, there are unacceptably high risks that the current NPA programme will: 

  • not provide value for money  
  • stifle competition and innovation in payment services 
  • delay realisation of the benefits of the NPA 

We also remain concerned about risks to competition and innovation relating to when the NPA is operational, and how this may affect the quality, range and pricing of payment services delivered using the NPA.

What are we proposing to reduce these risks?

We are seeking views on narrowing the scope of the initial contract for delivery to those NPA services that will provide an enhanced immediate payments service and enable Faster Payments transactions to move to the NPA. We are also seeking views on the appropriate way to secure this contract.

We are also consulting on reducing risks to competition and innovation in the NPA.  The consultation sets out the PSR’s proposals for managing these risks, including:  

Specific mitigations to ensure that: 

  • Pay.UK procures effectively
  • central infrastructure services (CIS) user prices are set using proportionate, objective and non-discriminatory (POND) criteria 
  • there are contractual provisions in place that guarantee minimum levels of service quality, place restrictions on information and data sharing, and promote and facilitate innovation

Governance principles to ensure that:  

  • Pay.UK is the primary interface and decision-maker for all matters relating to CIS provision  
  • Pay.UK actively implements rules to promote competition and ensure access terms are POND
  • if a CIS provider (or its owner) has a significant interest in another payment system that competes with interbank payments or in the NPA’s competitive overlay markets, its CIS functions are operationally separate 

Have your say

Please send your comments to PSRNPA@psr.org.uk.

Key dates

19 March 2021 - deadline for comments on questions 1 to 6 of our consultation (and other comments on risks to the delivery of the NPA and options for reducing these).

5 May 2021 - deadline for comments on questions 7 to 14 of our consultation (and other comments on competition and pricing). 

Update - Pay.UK’s responses

On 9 June 2021, we published Pay.UK’s responses to our consultation that concern scope and approach to procurement and invited stakeholders to share their views with us.

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