Noel Moran, CEO of e-money institution Prepaid Financial Services (PFS), has offered his support, but also raised concerns, in regards to the Bank of England announcement that real-time gross settlement systems (RTGS) will be widening access to non-bank payment service providers (PSPs).
By doing so, not only will PSPs be able to compete on a level playing field with banks, but the UK FinTech sector will be given a significant boost. Once rolled out, new entrants will have direct access to payment systems previously reserved for incumbents for the first time.
Noel Moran, CEO said: “After 20 years of the payments sector being dominated by the incumbent banks, we are delighted that the Bank of England has decided that it is finally time for FinTechs, many of whom are offering innovative and cost effective solutions, to be able to gain direct access. It’s been a long time coming, but this will soon allow new entrants to provide a better payment experience to their end users and will enable PSPs to compete on a level playing field.”
Warning on the need for sufficient but not stringent legislation, Noel continued: “Ensuring the resilience and security of the UK’s payments infrastructure is crucial, and regulation and legislation will need to be at the core of the strategy to make this work. Regulation is a good thing, but it is important that this does not get in the way of innovation – the very thing that opening up RTGS is trying to achieve.”
The announcement may come as no surprise to some, with discussions about opening up the payments system first being brought to light more than 15 years ago following the Cruickshank review. More recently, the Payment Systems Regulator, a government-appointed subsidiary of the Financial Conduct Authority was tasked with making banking networks available to non-traditional players.
Moran concluded: “As an established financial technology company and e-money issuer with our headquarters in London, we feel proud that once again the UK is leading the way in financial innovation.”