Modulr, the Payments as a Service API platform for digital businesses, today announced that it became a direct participant in the Faster Payment Service (FPS) on Friday 7th June 2019. Modulr is one of a small number of non-bank payment service providers (PSP) to hold an account in the Bank of England’s (BoE) Real-Time Gross Settlement (RTGS) system, allowing the FinTech to settle payment obligations in central bank money under its Modulr FS Limited entity (FRN 900573). This follows an assessment by the Financial Conduct Authority (FCA).
This has been achieved under a new settlement account policy directive initiated by the BoE that enables direct access to payment systems through provision of settlement accounts to non-bank PSPs. Direct access for PSPs is a key part of the broader policy objectives for the BoE, FCA, the Payment Systems Regulator (PSR) and Her Majesty’s Treasury (HM Treasury) to enable greater competition and innovation in UK payments.
Modulr will now process payments without going through a commercial bank, providing greater clarity on the location and protection of the funds. In addition, Modulr will technically connect directly to the payment schemes removing the operational reliance on third-party bank systems. Following an initial live proving period, Modulr will migrate its existing sort codes, accounts and transaction volume to the direct access solution.
This new access provides a level playing field for competition. It will allow Modulr to be in control of delivery, further innovation and its best-in-class service.
Myles Stephenson, Chief Executive, Modulr, says: “This is a significant milestone for Modulr enabling greater control over our payments infrastructure allowing us to drive further innovation faster. Coupled with the £10m awarded to us from the RBS Alternative Remedies Package, it allows us to compete with banks, and bring greater value to our clients. This capability will support our rapidly scaling organisation as we migrate volume in the coming months; in October alone, we processed over £1.3bn of Faster Payments value.”
Paul Horlock, CEO at Pay.UK (Operator of the UK’S Payment Networks including Faster Payments), says: “We are pleased to welcome Modulr on board to provide real-time payments on a level playing field with the best-known banks on the UK high-street. This is possible because Modulr is now using its own settlement account with the Bank of England, rather than making payments through a commercial bank.”