The UK’s real time payment network, Faster Payments has announced new agreements with six leading payment services firms including ACI Worldwide, Bottomline Technologies, FIS, Fiserv, Fundtech, and VocaLink that will allow hundreds of new payment service providers (PSPs) to access the scheme more affordably and efficiently.
Today Faster Payments has 11 members, who connect directly to the service, and who also provide sponsorship to a further 400 PSPs. However the industry and regulators have been pushing to remove barriers to increased direct access and thus have settled on the new agreements in which the aforementioned payment services vendors will provide aggregation services that will include technical access to PSPs by adding to their existing accounting platform technology, or providing a managed solution to either a single or multiple clients.
Commenting on the agreements, Jeremy Light, MD, Accenture Payment Services said,
“Up until now, some challengers have been caught in a ‘Catch 22’ situation when faced with the decision on how best to offer Faster Payments to their customers. The New Access Model would stimulate a new market for FinTechs while substantially reducing the barriers to entry for FinTechs and making 24/7 access to immediate payments economically attractive at lower volumes.”
According to Accenture research, this new model will ensure 24/7 real-time payments for hundreds of PSPs but also will result in lower costs over five years than sponsored access or direct membership, while simultaneously delivering revenue of up to £200 ($312) million to the collective six firms providing the aggregation services.
The new model is definitely a win-win situation for the majority of the industry apart from today’s 11 direct members that will see their influence and revenue from the existing model wane in the years ahead. Nonetheless the Faster Payments scheme is one of the premier systems in the world and is being closely replicated in a number of markets and so this new agreement could also serve as blueprint for future international deployment.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments advisory Service at Mercator Advisory Group
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