BoE updates on payments infrastructure

Members of our team attended a seminar on the retail payments infrastructure. Among the speakers, David Bailey outlined BoE’s current priorities. He spoke of the role of the Payments Strategy Forum and BoE’s work on real time gross settlement. He focussed on the proposal to consolidate Bacs and Faster Payments, and the Cheque & Credit Clearing Company, saying BoE’s hope is that the consolidated entity should be greater than the sum of all its parts. He also spoke to the “new payments architecture”, based on the concept of a simplified payments platform. BoE supports innovation but of course needs to consider financial stability. It needs to ensure settlement is grounded in central bank money and will expect the consolidated payment system operator to give the level of legal certainty the Settlement Finality Directive requires. This operator will remain accountable to BoE. Other upcoming changes include a proposal to extend BoE’s Banking Act 2009 powers to include recognised payment system operators as well as designated infrastructure providers, while the Digital Economy Bill will give Treasury power to recognise payment systems whose membership is broader than banks.