UK’s payments association calls for wider payment account access
London, United Kingdom - The Emerging Payments Association (EPA) has today published its response to the publication of UK Finance’s good practice guidelines on Access to Payment Account services. The document provides guidance for organisations operating within the regulatory environment of the UK and either applying for, or providing, services covered under Regulation 105 of the PSRs 2017.
The EPA acknowledges that the good practice guidelines provide a useful collation of current information and requirements. Because access to banking is such a fundamental requirement of any licensed institution, the EPA has cooperated with UK Finance (UKF) in the production of these good practice guidelines. In the twelve months it has taken to produce them, the EPA has provided regular input and constructive challenge based on the experiences of its 140 members, 50% of which are regulated companies.
The EPA will continue to be collaborative in the ongoing review of the impact of this document and will make recommendations on areas that could be enhanced or amended within the guidance document.
However, the EPA believes that the problem of limited access to banking, whether to do with the companies applying for the account or the banks providing it, remains considerable. Hundreds of companies are without a bank account, and many more have them withdrawn at short notice. So the EPA is developing a standardised approach to how organisations can gain access to bank accounts. The UKF good practice guidelines do not, unfortunately, provide practical techniques or strategies to firms who are seeking access to bank accounts nor does it provide information on which account services are offered by which credit institutions.
Over the last four years the Emerging Payments Association (EPA) has highlighted how it is becoming increasingly difficult to open a bank account if you are a business, PSP or financial institution. The EPA has also highlighted the increased level of de-risking by UK banks that is shutting the accounts of such businesses, often, we believe, in order to reduce the banks’ levels of exposure to risk and improve their margins.
To help address this problem, within the next three months the EPA will publish a ‘Guide to Bank Account Access’ which will contain a description of all the organisations providing access to bank accounts or settlement account services to UK PSPs. It will provide pragmatic practical help guidance that should be useful for both banks and those opening accounts with them, whether they are FinTechs or payments businesses.
‘We’ve supported UKF in the production of what is a pretty good starter for ten,’ says Tony Craddock, Director General of the Emerging Payments Association. ‘It’s like the specification document for your new lightweight drone – it is interesting, but not as helpful as a practical set of guidelines on how to fly the thing. But UKF’s hands are tied. Ours are not. Our Guide to Banking Access sets out to make the job of opening and keeping a bank account much more straightforward.
EPA members call upon the regulator and government to take an active role in supporting applicants to gain access to payment account services within the UK, whether through building upon regulation already applied to the market or by providing a strong direction on how the market should operate in order in order to constructively help applicants.
The EPA also encourages that Bank of England to implement their enhancements to the U.K.’s Real-Time Gross Settlement (RTGS) swiftly and recommends that Bank of England goes even further to open up greater direct access to settlement accounts. The EPA commends the Bank of England for continuing to develop an RTGS service which provides access for a wider number of firms.
Andrea Dunlop, Chair of the EPA Advisory Board, comments ‘It’s clear that challenges remain to gain access to a bank account in the UK, and that there is limited appetite from banks to provide services to non-bank PSPs. We still need for the industry to provide a more practical guide to help companies navigate this challenging space, as well as some options on how we could improve this situation in the UK. After all, with Brexit around the corner, it’s important that companies based here or wanting to setup in the UK feel that UK Banking is open for business.’
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About the EPA:
The Emerging Payments Association (EPA), established in 2008, connects the payments ecosystem, encourages innovation and drives profitable business growth for payments companies. Our goals are to strengthen and expand the payments industry to the benefit of all stakeholders.
It achieves this by delivering a comprehensive programme of activities for members with help from an independent Advisory Board, which addresses key issues impacting the industry. These activities include:
- 12-month events programme
- Annual Black-Tie award ceremony
- Leading industry change projects
- Lobbying activities
- Training and development
- Research, reports and white papers
The EPA is over 140 members strong and growing at 30% annually. Our members come from across the payments value chain; including payments schemes, banks and issuers, merchant acquirers, PSPs, retailers and more. These companies have come together, from across the UK and internationally, to join our association, collaborate and speak with a unified voice.
This response was delivered as an output from the EPA’s Project Banking Access. Project Banking Access helps the payments industry support EMIs, PIs, digital banks, and merchants to open and keep open bank accounts for safeguarding funds and everyday trading, and to secure widely accepted understanding of the scale and nature of de-risking and its impact on financial services and businesses. Project Banking Access is supported by its Benefactor, Galileo Processing.