Following the recommendations by the U.K.’s Payment System Operator Delivery Group (PSODG), announced in May 2017, a New Payment Systems Operator (NPSO) has been formed to consolidate BACS Payment Schemes Limited, Faster Payments Scheme Limited (FPSL), and the Image Clearing System (ICS, which will replace the paper processing system for cheques currently managed by the Cheque & Credit Clearing Company, (C&CCC). These retail payment systems process more than GBP6.4 trillion of payments every year between them. The NPSO is coordinating implementation of the recommendations. It is made up of six workstreams: change management, communications, corporate governance, finance, people, and risk frameworks. Each workstream has a clear purpose and terms of reference which clearly define its remit. Further, the PSR has set up a steering group composed of representatives from banks and consumer groups to develop an industry code for reimbursing victims of authorized push payment (APP) scams. A new forum has been created that has established the New Payments Architecture (NPA) Design Hub, that will involve system architecture related changes for U.K. financial institutions.
Traditional banks must evaluate their place within the payments ecosystem and be open to partnering with FinTechs and third-party developers to drive value collaboratively.
Structural changes are spurring payments industry participants to evaluate the future of the business as well as their role in the months and years ahead.
The Payment Services Directive 2 or PSD2 has been in full force for more than six months, and its impact is being felt not just in the European Union, but across the globe – with several markets, such as Singapore, Australia, and Nigeria, as well as Hong Kong announcing open banking initiatives inspired by the PSD2