New Payment Architecture's moment of decision
Issue 470 | 15 April 2023
Welcome to this New Payments Architecture (NPA) update from Payments:Unpacked - in this special NPA subscriber edition we take a detailed look at the regulators planned focus for the next 12 months.
With the Payment Systems Regulator (PSR) keen to see progress on delivery “without further delay” and the potential for the white smoke of a vendor decision in the coming weeks it really is a moment of decision for the NPA.
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NPA’s moment of decision
Moment of decision: (Noun) A climactic, decisive or critical moment in an event or period.
Issue 469 of Payments:Unpacked provided a summary of the PSR’s 2023/24 Annual Plan and Budget: The what, why and how of the PSR.
A key element of the PSR’s latest work programme is the proposed New Payments Architecture (NPA). As we approach the end of the first third of 2023 it is clear that we have reached a climactic, decisive and critical moment for the NPA.
Earlier this year Shane Warman (Pay.UK’s NPA Programme Director) said:
We are now in a strong position going into 2023. In Q1 and Q2 we will be evaluating our vendor submissions before working to gain regulatory approval for our vendor, when selected, and assessing what that will mean in terms of technical design, regulatory requirements and business perspectives.
From this we can assume that Pay.UK’s vendor decision has now been made and the process to gain regulatory approval (in effect a “non-objection” decision by the Payment Systems Regulator (PSR) and the Bank of England (BoE)) will begin.
With these discussions happening in private it is likely that it will be some months before a decision is made public and although greatly anticipated it is, however, unlikely that the announcement when it comes will emulate the Vatican’s use of white or black smoke emerging from a chimney.
The recently published PSR annual plan does provide some helpful insights into the regulatory focus we can expect to see.
NPA 1.0 = FPS 2.0
The original scope was for a new platform for Faster Payments, Bacs (Direct Debit and Direct Credit) and cheques. Some time ago cheques were quietly descoped and then, in late 2021, a “Faster Payments first” direction was placed on Pay.UK.
The PSR’s annual plan certainly reinforces this view of a narrow focus NPA:
The New Payments Architecture (NPA) programme is an industry initiative to provide technical infrastructure that will renew and upgrade the Faster Payments system, and future-proof account-to- account payment services in the UK.
It should also allow these payments to meet a broader range of needs by providing a robust and sustainable infrastructure where innovation and competition can thrive.
Progress without delay
The genesis of the NPA concept is perhaps difficult to determine however, the definition of and commitment to the NPA was very clear by July 2017 when the Payment Strategy Forum published its “Blueprint for the Future of UK Payments.”