The proposed ‘New Access Model’ from UK interbank payment system Faster Payments could create a £200m business opportunity for financial technology companies (fintechs) and lower barriers to real-time payments.
This claim is made in a new report, The Economics of the New Access Model, which was commissioned by the Faster Payments Scheme and prepared by Accenture. The report also suggests that the model could deliver a potential collective £200m profit for participating fintechs.
In addition, Faster Payments transactions are predicted to at least double over 2015, from the one billion transactions processed in 2014, due to an increase in demand for real-time payments, from both consumers and businesses.
Faster Payments first published its New Access Model in December 2014. It sets out proposals to enable technology vendors to offer technical access to non-bank payment service providers (PSPs) by adding to their existing accounting platform technology, or providing a managed solution to either a single PSP or multiple PSPs.
Craig Tillotson, chief executive of Faster Payments, said: “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.”
The Faster Payments Scheme currently has 10 members, including Barclays, Citi, HSBC (including First Direct and M&S Bank), Lloyds Banking Group, Royal Bank of Scotland Group (including NatWest and Ulster Bank) and Santander UK.
PayPal connects to Faster Payments on a direct agency basis, while a further 400 PSPs access the service indirectly through a sponsor bank.