Benefits of the NPA
The existing ISO 8583 messaging standard limits interoperability and opportunity for enhanced data. Moving to a globally recognised messaging standard for payments will bring major benefits; allowing more data fields to be included in payments, providing valuable additional data functionality to our customers, and enabling new services to be developed.
Interoperability with other payment platforms will also reduce development costs for customers by removing costs associated with simultaneously innovating across multiple standards used on different payment platforms and overlays. Analysis by Pay.UK shows that the use of ISO 20022, alongside additional fraud tools, to spot and prevent fraud can help PSPs reduce their collective losses by £1.6bn over the next 10 years.
Adoption of the new global messaging standard, ISO 20022, will attach additional data fields to each payment that is made, providing more information to PSPs every day about the type and nature of their customers’ transactions. Such visibility of payments will be a powerful tool for PSPs in the fight against fraud and financial crime. Global supply chain payments and remittances will now come with enhanced data to help with reconciliation as well as improving traceability and transparency.
The NPA Core components have no single points of failure to ensure service continuity. This advanced component-based architecture will facilitate enhanced data recovery and the rapid restarting of payments processing from its last stored state.
The architecture includes the design of a centralised data, reporting and analytics capability. Data is defined, documented, structured and governed providing a single access point through which it can be leveraged to support the following outcomes:
- Reporting and analytics
- Billing, charging and invoicing
- Fraud prevention and detection
- Delivery and access of data overlay services.
What are the opportunities that NPA will create for financial institutions, payment service providers and fintechs?
The faster and more powerful infrastructure will increase choice, boost security and reduce costs. And it will generate new market opportunities for the financial services sector by enabling banks, building societies and FinTechs to create new payment products and services more easily.
The NPA will enable real-time consumer-to-business payments while maintaining flexibility and choice for those who require alternatives. For banks, building societies and other payment service providers, it will enable operational efficiencies and cost savings, generate important data benefits and help in the fight against fraud.
The NPA will reduce barriers to entry to the payments market by delivering:
- More connectivity options.
- An automated and single settlement account model.
- An on-demand testing environment.
It will open the payment ecosystem to disruptive players, enabling innovations that will drive competition, create jobs and deliver economic benefits to the country and UK plc.