Build, migration and regulation
We are buying a solution from a vendor. The NPA system will have a number of user interfaces to help manage the system and vendors. At its core, it is a message-processing platform where others create a user interface to submit messages.
Pay.UK’s goal for the NPA is to deliver a single architecture that encompasses FPS and Bacs. In the long term, transitioning Bacs volumes onto the NPA platform will drive efficiency benefits for our customers via the cost savings and economies of scale brought by decommissioning the legacy architecture and consolidating onto one platform. Our current NPA platform design gives a natural route for the further organic migration of Bacs Direct Credit volumes to the NPA, which we are already seeing on FPS. However, specific functionality to support Bacs-style payment outcomes will be subject to a full industry consultation.
We are designing the Bacs strategy approach and will deliver this to the Payment Systems Regulator. We designed the Bacs strategy approach and delivered this to the Payment Systems Regulator in Q1 2023. We will continue to support and enhance Bacs during this process and no transition will be started until the full FPS to NPA migration has been completed and the NPA is live.
We have released a draft Industry Migration Plan to guide our customers through the migration from FPS to NPA. Draft 3 was shared with customers in May 2023 and feedback was requested by July 2023. From customer feedback, we have changed the working assumption on the duration of migration from 9 to 12 months. We have also established that, indicatively, customers can meet the target NPA ramp-up profile which is an S-curve.
We aim to baseline the Industry Migration Plan later in 2023 so customers can start their individual migration planning. Pay.UK will also start work, in close consultation with customers, on more detailed planning for Live Proving and on the Migration Schedule.
As an independent organisation, we take the key decisions on the NPA. Nevertheless, we engage regularly and balance with the views of our stakeholders.
The design, procurement and delivery of the NPA is of clear importance to both of our primary regulators (PSR and FMID). Our regulators wish to ensure the NPA meets their own objectives around competition, innovation, user needs, robustness and resilience.
Both regulators assess our decision making and check how our decisions align to these objectives. We need to ensure their non-objection before we progress to contract signature. We have completed a number of regulatory non-object processes and have an established, governed process in place in relation to our engagement with regulators.
Pay.UK has notes with interest the Bank of England and HM Treasury joint Consultation Paper on a potential Central Bank Digital Currency (‘CBDC’), referred to as the ‘digital pound’. We appreciate that no final decision has been taken to bring in a digital pound, but that the consultation reflects a policy position in which a digital pound is now significantly more likely. This mirrors building momentum toward CBDCs we are seeing across much of the G7.