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UK focuses on fraud detection and instant payments

The UK continues to develop its New Payments Architecture (NPA), which will allow financial institutions (FIs), payment providers and other players to access a new payment platform to deliver instant payments .

Pay.UK has published its new strategic plan March 2 for 2021-2026 where he established his vision on how to build and operate the NPA. Pay.UK is a not-for-profit organization overseen by the Bank of England and regulated by the Payment Supervisor Regulator which operates most of the payment infrastructure in the UK and will develop the NPA.

The strategy could be divided into two areas. First, the report established policies that will help deliver better services on existing platforms, where the focus is on detecting fraud and enabling better data sharing. The second part of the document explains how to build the next generation payment platform that will enable instant payments and foster competition.

Strengthening safety and security across different payment platforms to reduce fraud has been an ongoing priority for Pay.UK, which has worked with industry to develop rules and standards that work for everyone. Through these collaborations, Pay.UK, announcement February 22 that it had developed a new tool to be used in the fight against authorized push payment (APP) fraud. The new “logical data model” serves as the basis for categorizing relevant customer data which allows both banks involved in processing a payment (the issuing bank and the receiving bank) to more easily identify a fraudulent transaction.

While this model was designed for use in existing payment platforms, the model will serve as the foundation for a long-term approach to how the industry normalizes consumer data. This will allow payment service providers to improve the way they exchange data, enabling more accurate and faster detection of suspicious payments.

On the data sharing front, Pay.UK will continue to use open banking rules and standards to share more and better data, which is in line with the government’s open data strategy. Additionally, Pay.UK will work with Her Majesty’s Revenue and Customs (HRMC), the government department responsible for tax collection, to pilot a data and payment overlay service.

However, the most important priority for Pay.UK remains the development of NPA. The new payment platform will provide new rails for instant payments.

“Reducing the proportion of transactions carried out by card will benefit the UK economy by removing the associated costs,” Pay.UK said in the report.

Pay.UK will operate the NPA as a neutral player and will not offer products and services for the benefit of end users. Its main focus will be to ensure that the platform is robust and resilient, and it will establish rules and standards to ensure access for most businesses. Yet it will not compete with any of these companies and change their business models.

The implementation of the NAP has been slower than initially expected, but it is still progressing. Pay.UK has not yet launched a public bid to choose the company that will build the infrastructure.

In the meantime, the Bank of England has updated the migration schedule to the ISO 20022 messaging standard. This migration to the new ISO standard will make it easier to use the NPA. However, the deadline for using the old system has been moved to April 2023 from June 2022.

Read more: UK moves to Open Banking 3.0



On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.