19 Mar 2008
IBS Publishing
UK Faster Payments, currently in test mode, is gaining interest from the rest of Europe and beyond. Vocalink, by virtue of building the central system, is well placed to take the capabilities to a wider audience. Head of international market development, Paul Taylor, unveils the plans.
Vocalink is preparing to adapt its UK Faster Payments platform to deliver comparable near real-time payment clearing capabilities for the international market. Such a move would build on Vocalink’s pivotal position as the developer of the UK system and would allow banks outside the UK to leverage it for internet, phone and standing order payments.
Interest from the global community in the UK Faster Payments project has been growing and Vocalink’s head of international market development, Paul Taylor, feels his organisation is well placed to provide a solution. ‘We are actively putting together a European near real-time service,’ he confirms. The UK, he feels, is ‘on the verge of a world-leading breakthrough’. The belief is echoed by Darren Capehorn, head of the banking payments practice at Strategic Thought Group and, while at Lloyds TSB, a member of the Faster Payments business and technical committees. It will put the UK in a ‘marvellous position, at the forefront’, he says, with a national scheme that will be ahead of the requirements of the Payment Services Directive (PSD).
UK Faster Payments is the infrastructure that has been under development since 2005 to speed up internet, phone and standing order payments. The new system will allow payments to reach a recipient’s account within a few hours. There are 13 member banks, accounting for over 97 per cent of the current automated payments traffic in the UK. Standing orders will be same day if made on a business day; the capabilities for internet and phone will be available 24x7. The system was due to go live in November last year but is now scheduled for 28th May. It has been an uphill struggle, involving much greater complexity and cost than initially envisaged (see this month’s IBS Journal Payments Supplement for an analysis). However, feedback from the market is that testing is proceeding smoothly.
The rest of Europe needs to move the same way to comply with the PSD. Taylor says interest in what has been done in the UK has come not only from Europe but also beyond. He points out that within the 13 members, and in the wider non-member agency community, there are the UK operations of international banks. He feels the banks’ businesses are becoming ever more global and so they are trying to put in place infrastructures and consolidated services to cater for this.
The challenge of expanding use of the system beyond the UK is not only technical but also to do with ensuring the readiness of participants. ‘It would need to be launched into a market that was able to send and receive in near real-time,’ says Taylor. To this end, the UK-based CSM is in discussions with banks, groups of banks and standards bodies.
An indication of Vocalink’s strong position came in October last year when, in the first instance of a domestic CSM outsourcing to a foreign entity, a partnership was announced whereby Vocalink would provide a range of services and solutions to Swedish payments processor, Bankgirocentralen BGC. It is also well placed for SEPA and non-SEPA clearing and settlement and has promised a range of value-added services on top. Much of its progress has been as a result of the major redevelopment of its core engine over the last few years.
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