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Tuesday 25 June 2019


NPSO details payments architecture plans

Written by Peter Walker

Initial details of a new procurement process for the clearing and settlement layer that will form the backbone of the New Payments Architecture (NPA) have been announced by the New Payment System Operator (NPSO).

The NPA is a new conceptual model for payments in the UK, which will take over the processing of more than £6.7 trillion of Bacs, Faster Payments and potentially cheque payments every year, from 2021. Bringing them together will simplify the rules, standards and processes that banks and others need to follow to use the systems.

The NPSO is seeking to appoint a strategic partner which is capable of implementing a scalable, world-class infrastructure for the NPA. It will conduct a further consultation in 2019 on plans for the migration of payment volumes currently cleared through Bacs and potentially, subject to a suitable business case being identified, the migration in future of payments being processed using the Image Clearing System (ICS) for cheques.

Paul Horlock, NPSO chief executive, commented: “We need a long-term strategic partner that is capable of working with us to safely deliver a scalable infrastructure which can process trillions of pounds worth of payments every year. We look forward to engaging widely to find the right one.”

The procurement exercise follows the consolidation of Faster Payments and Bacs into the NPSO, which has enabled the procurement for the successor to each of these schemes to be integrated inside the NPA programme.

This has widened and enhanced the scope of requirements to include clearing and settlement of potentially all of the UK’s non-card retail payments, rather than just the real-time aspect.

Specific details regarding the approach and timelines for the new procurement process will be published in a prospectus on 18 October.

In July, NPSO chair Melanie Johnson announced plans to update the underlying payments infrastructure, with a procurement process being worked on for the new architecture that is scheduled for delivery in around four years.

“We must consider how we future proof the platform, as we are committed to assuring transition goes to plan,” Johnson stated.

In the last few months, the NPSO has assumed responsibility for the Bacs and Faster Payments systems - which process a combined £6.3 trillion worth of payments annually - and managing the cheque paper and cheque image clearing systems.

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