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New access market for Faster Payments gains traction
- Six FinTech vendors sign letters of commitment to develop new technical access solutions
- More than 30 PSPs engaged with Faster Payments Access Programme
- Joint report with Accenture sets out economic analysis validating benefits of New Access Model for vendors, PSPs and end-users
Faster Payments’ New Access Model could create a £200m business opportunity for FinTech vendors while simultaneously lowering barriers to real-time payments, according to a new independent economic analysis published today (Monday 11 May 2015).
Faster Payments Scheme Limited (FPSL) commissioned the report, The Economics of the New Access Model , from Accenture, to examine the business case for implementing the New Access Model. The findings suggest the New Access Model could deliver a potential collective £200m (Net Present Value) profit for participating FinTechs. In addition, Faster Payments transactions are predicted to at least double over the same period, from the 1 billion transactions processed in 2014, as consumer and business demand for real-time payments continues to grow.
The New Access Model, first published in December 2014, sets out proposals to enable technology vendors to offer technical access to Payment Service Providers (PSPs) by adding to their existing accounting platform technology, or providing a managed solution to either a single or multiple PSPs.
Faster Payments currently has 11 participants who connect directly to the service, while a further 400 PSPs access the service indirectly through sponsor banks. Accenture’s analysis suggests that - in addition to guaranteeing 24/7 real-time payments for PSPs - the New Access Model should result in lower costs over five years than sponsored access or direct membership for PSPs processing (or forecast to process) between 1.4m and 20m Faster Payments per year.
To coincide with the publication of the report, six leading FinTech providers - ACI Worldwide, Bottomline Technologies, FIS, Fiserv, Fundtech – now part of D+H, and VocaLink – have signed Letters of Commitment to develop aggregation services through the New Access Model.
Craig Tillotson, Chief Executive of Faster Payments, commented:
“Faster Payments is proud to be leading this work to widen access to our world-leading 24/7 real-time payment service.
“Early movers in providing technical aggregation services are well positioned to capture a share of a sizeable opportunity, and position themselves to meet similar demand that is likely to follow from the UK in overseas markets. We are greatly encouraged that six providers have already committed to our New Access Model today - I would encourage any interested FinTechs that have not yet done so to act now, and get involved.”
Jeremy Light, Managing Director, Accenture Payment Services, said:
“Up until now, some challengers have been caught in a ‘Catch 22’ situation when faced with the decision on how best to offer Faster Payments to their customers. The New Access Model would stimulate a new market for FinTechs while substantially reducing the barriers to entry for FinTechs and making 24/7 access to immediate payments economically attractive at lower volumes.”
In light of the report’s findings, Faster Payments is proceeding with a programme to encourage more FinTech vendors to become accredited to connect to the FPS Central Infrastructure and provide aggregation services. A PSP participation programme is running in parallel, to enable and support interested parties through the prerequisite accreditation, certification and assurance processes needed for live access to the FPS Central Infrastructure.
The access programme is on track to meet its targets of having at least three accredited vendors in place by the end of this year, with a dozen new PSPs active by the end of 2016.