Confirmation of Payee Phase 2: PSR letter to Specific Direction 10 banks and UK Finance
The Payment Systems Regulator (PSR) has published a letter it has sent to the UK's six biggest banking groups (directed under the PSR's Specific Direction 10 and referred to as SD10 banks) and UK Finance. The letter responds to an unpublished letter (dated 25 June 2021) from the SD10 banks and UK Finance to Chris Hemsley, Managing Director of the PSR, outlining their plans and publicly committing to deliver the first part of Phase 2 of Confirmation of Payee (CoP).
The PSR welcomes the banks' commitment, which it says will help avoid unnecessary delays to more payment service providers (PSPs) joining Phase 2. The PSR states that if the SD10 banks act as promised there should be no need for it to direct them to be present in the Phase 2 environment by the end of 2021 (the approach the PSR contemplated in its May 2021 call for views on Phase 2).
The PSR will continue to engage with the SD10 banks and Pay.UK to monitor the delivery of the commitment. If appropriate, it will take steps to direct delivery, for example, should progress stall.
The PSR is separately considering the feedback received to its call for views to decide whether action is needed on the remaining parts of Phase 2. This includes the option to direct more PSPs to implement CoP, to direct the collecting and sending of secondary reference data, and to end dual running in March 2022.
The PSR clarifies that it does not want PSPs to change or slow down any plans to progress the other elements of Phase 2 while waiting for the PSR to decide whether to mandate all, or some parts of it.
New Payments Architecture: PSR policy statement and consultation on lowering risk to delivery
Following its consultation in CP21/2, the PSR has published a policy statement and consultation, CP21/8, on lowering risk to delivery of the New Payments Architecture (NPA). Annexes 1 and 2 and 3 and 4 have been published separately. The PSR has decided that Pay.UK should phase the development of the NPA by narrowing the scope of the NPA central infrastructure services (CIS) contract. Pay.UK must secure this contract through a competitive tender. The PSR is also consulting on the draft legal instruments to implement its decisions. The PSR intends to vary Specific Directions (SDs) 2 and 3.
Having considered the responses to its consultation, the PSR states that it will require Pay.UK to narrow the scope of the CIS contract by mandating that Pay.UK:
- must, as a minimum, buy services needed to support single-push payments (which will allow most Faster Payments transactions to migrate to the NPA); and
- may buy additional services and system functionality only if the PSR does not object (which will include taking account of the adequacy of Pay.UK's consultation with industry on its proposals).
The consultation ends on 10 September 2021. The PSR plans to give the directions to vary the SDs later this year. It also plans to publish a separate policy statement by the end of the year informed by feedback following its consultation on mitigating risks to competition and innovation relating to when the NPA is operational.
Proposed codified Regulation on cross-border payments: Council of EU publishes text
The Council of the EU has published the text of the proposed Regulation on cross-border payments in the EU, codifying and replacing the existing Regulation on cross-border payments.
According to a Council information note dated 25 June 2021, the European Parliament adopted the Regulation at first reading on 23 June 2021. The note states that the Parliament's position reflects what had been agreed between the institutions in informal contacts and consequently the Council should be in a position to approve the Parliament's position. The Council's Permanent Representatives Committee (COREPER) voted to approve the Regulation on that basis on 7 July 2021, according to a Council note dated 14 July 2021. Following COREPER's vote, the next step will be for the Council to approve the Parliament's position.
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Authored by Yvonne Clapham