Scheduled for a 2021 implementation date, the UK is set to witness an entirely ‘New Payments Architecture’ (NPA) in a bid to boost the region’s capabilities.
Payment Expert spoke with Andrew Hewitt (director payments & data solutions, FIS) about the opportunities a new structure brings.
Firstly, would you be able to provide our readers a brief breakdown of what the UK’s New Payments Architecture is?
AH: The New Payments Architecture (NPA) is a new conceptual model for the future development of the UK’s shared retail payment infrastructure.
It is a complete re-engineering of the central infrastructures behind FPS and BACs which represent almost all payments that a UK citizen makes on a day to day basis, so it’s critically important to all payment users in the UK.
It will be the biggest change to the way payments are processed in the UK since the 1960s.
Considering then it’s the biggest change since the 1960s, is the new structure overdue?
AH: In terms of whether the NPA is overdue or not, Faster Payments work well today as does BACS.
However, the underlying message format especially for BACS is severely limiting and will the NPA will undoubtedly increase the possibility of innovation in this area.
What are the types of opportunities that could arise for UK businesses?
AH: With a change of message format to ISO20022, there are significant opportunities for UK businesses with the additional data which can flow with a payment message.
The NPA should help significantly with streamlining invoicing, reconciliation of payments and similar processes.
But is there a level of risk when bringing in a new payments infrastructure?
AH: There is undoubtedly a level of risk associated with any large IT project, especially one as complex as the NPA.
The UK payments industry as a whole has a strong record of delivering large change well – such as the original introduction of Faster Payments and other industry wide initiatives like Current Account Switching.
Nothing suggests the NPA would be any different.
Lastly, will the NPA introduction impact the concept of a ‘cashless’ society?
AH: The NPA itself won’t remove cash from society but rather we could see innovative overlay services using the new payment rails it creates which have some of the attributes of cash which people like. The NPA arguably makes innovation above the payment rails easier.
