New Payments Architecture Core

NPA – Core Clearing and Settlement

The backbone of the New Payments Architecture (NPA) will be a new core clearing and settlement layer, which will enable money to move every time we pay a bill, pay back a friend, or a business pays its supplier – regardless of whether it’s an online banking payment, Direct Debit or a cheque.

Faster Payments, Bacs and cheque payments have historically been processed using separate infrastructures – meaning there has been a mix of rules, standards and processes to follow. Bringing all of these payment schemes together has created an historic opportunity to rebuild the core clearing and settlement infrastructure from the bottom up, simplifying requirements for Payment Service Providers (PSPs) through interoperability and catalysing innovation.

NPA – Procuring the Core Infrastructure

We are working to competitively procure a strategic partner to deliver and operate the UK’s NPA core clearing and settlement infrastructure.

The core clearing and settlement layer, which will take over the processing of more than £6.7 trillion of Bacs, Faster Payments and potentially cheque payments every year, is forecast for implementation after 2021.

The NPA will create a new framework that will allow new ‘overlay services’ to be easily developed, leading to greater competition and innovation, with new and better payments products and services.

The new procurement exercise follows the consolidation of Faster Payments and Bacs into Pay.UK, which has enabled the procurement for the successor to each of these schemes to be integrated inside the NPA programme. This has widened and enhanced the scope of requirements to include clearing and settlement of potentially all of the UK’s non-card retail payments, rather than just the real-time aspect.

Specific details regarding the approach and timelines for the new procurement process were published in a prospectus on Thursday 18 October 2018.

Find out more about our how to get involved with the NPA programme here.

NPA Rules and Standards

There are two sides to every payment – a payer and payee that typically hold accounts with different PSPs. This means that for payments to work for consumers and businesses all stakeholders in the system must follow the rules, standards and regulations that underpin payment systems and therefore payments are not just about technology

So, while we will procure and operate the clearing and settlement layer of the New Payments Architecture (NPA), its responsibilities for other layers of the ecosystem will be focussed on standards, rules, governance and licensing access to the clearing and settlement platform.  We will also issue best practice guidelines to help ensure consumers and businesses get the best possible user journey from the various products and services that will utilise the NPA.

The various documents that make up the specification for the NPA’s core clearing and settlement layer are currently in development, and are expected to be published in 2019.

In parallel with the activity to define, procure and implement a new clearing and settlement engine for the NPA, the ‘scheme rules’ for the NPA are being developed to support wider competition and innovation opportunities.

Find out more about the our general approach to standards here.