New Payment System Operator completes retail payment systems consolidation

The New Payment System Operator (NPSO) assumed responsibility for both the paper-based and digital image clearing systems for cheques on 1 July. At the same time, the Cheque and Credit Clearing Company - which had operated the payment system - became an NPSO subsidiary.

The move follows NPSO taking responsibility for the Bacs and Faster Payments schemes in May, and means the body has now completed the consolidation of the UK’s retail payment systems.

On 1 July the NPSO also acquired UK Payments Administration, the service company responsible for providing people, facilities and business services to the payment ecosystem.

The consolidation is a critical point in the development of the UK’s new payments architecture, which has been under development since the publication of a strategy paper by the Payment Strategy Forum in November 2016. The NPSO was set up to design and implement the revamped architecture.

The changes include new digital infrastructure, the adoption of a common messaging standard for electronic data interchange between financial institutions, and the use of ‘push payments’ to increase customer control and enable simplicity. The new architecture will have a single set of standards and rules and central governance. It will be implemented over a period of five years, although no business has yet been chosen to provide the new infrastructure.

Last week the Payment Systems Regulator said that the chosen provider of infrastructure for the new payments architecture could be required to give companies active in the payments market access to the "global transaction datasets" it will hold, in order to promote competition and innovation in the market.

In an analysis piece earlier this year banking law experts Henry Burkitt and Tony Anderson of Pinsent Masons, the law firm behind Out-Law.com, said industry engagement was crucial for the successful delivery of the new architecture.

NPSO chief executive Paul Horlock said: “This is our opportunity to create the future of retail payments in the UK, driving value for people and businesses and enabling a vibrant UK economy. We will be the leading payments authority that will create a best in class payment infrastructure and standards in the UK for the benefit of people everywhere.”