Pay.UK has launched a new flexible liquidity model for Faster Payments Net Sender Caps, going live with changes designed to broaden participation in the UK’s interbank retail payment infrastructure. The operator, which oversees Britain’s retail payment systems, is implementing the framework to reduce barriers for institutions seeking access to the Faster Payments network.
The updated model adjusts how liquidity requirements are calculated for Net Sender Caps, the limits placed on payment service providers to manage settlement risk. By introducing more flexibility in these requirements, Pay.UK aims to make it financially viable for a wider array of firms including smaller banks, fintech companies, and payment institutions to participate directly in the system rather than relying on indirect access through larger banks.
The move comes as UK authorities push for greater competition in payment services and reduced dependency on traditional banking intermediaries. Market participants can expect increased competition in real-time payment services as more direct players enter the ecosystem.
FXnCO Insight
Payment service providers should reassess direct Faster Payments access opportunities as lowered liquidity thresholds may now justify bypassing correspondent banking arrangements.
Source: Finextra