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Since its inception in 2014, the Faster Payments Access Programme has unlocked the power of immediate payments for thousands of customers across a wide spectrum of payment services.
Now, as TransferWise becomes the first ever non-bank payment service provider (PSP) to directly connect and settle with the Faster Payments 24/7 real-time payment infrastructure, it has opened the door for a whole new generation of innovative PSPs to offer services on an even footing with the biggest names in banking.
This milestone is testament to the power of cooperation, representing the culmination of years of hard work by Faster Payments, the Bank of England, the FCA and HM Treasury in making the technical, policy and statutory changes needed to enable direct access to real-time payments to new institutions and markets.
As a ?non-bank?, TransferWise would previously have had to rely on a commercial bank that held a settlement account at the Bank of England to effect settlement on their behalf and to connect to the Faster Payments infrastructure. However, following changes made to open up real-time gross settlement accounts to non-bank payment service providers in 2017, they can now do so directly.
That's not to mention the further advantages that direct access offers, including guaranteed 24/7 processing and being able to make use of overlay services such as Paym.
TransferWise is expected to be the first of many non-bank PSPs to make use of the new provision, which also contributes to financial stability by dividing the financial exposure of providing payment services between a greater number of institutions.
In just four short years the Faster Payments Access Programme has seen the number of direct participants in Faster Payments more than double to 22, as well as diversify from just the major high-street names to include up-and-coming challengers and fintechs.
With the advent of the New Payments Systems Operator and the New Payments Architecture fast approaching down the line, a more competitive, secure and innovative future for payments is within our grasp. It is a huge opportunity not just for non-bank PSPs, but for the whole industry to seize in the interest of users.
Craig Tillotson, Chief Executive, Faster Payments