Implementación de la solución

6.31 In our analysis and discussions with stakeholders, we have examined the ability of new entrants and smaller players to access payment

systems.¹⁵⁹ We consider whether firms are prevented from accessing these schemes and if the costs are prohibitive.

6.32 A retail banking provider can access an automated payment scheme (Bacs, CHAPS, FPS) directly, as a member of the scheme, or indirectly, via an agency agreement with a member of the scheme. The choice between these two options depends on the necessity of access to the scheme, the relative cost of these options and the eligibility criteria.

6.33 The objectives of the criteria that must be met to become a member of a payment system are to ensure the safety of the system. Membership criteria ensure that joining members meet the necessary liquidity obligations required by the authorities and are of sufficient

credit-worthiness to ensure that they minimise their risk of default. In summary the criteria are that members must:

158 Part 8 of the PSRs 2009 does not apply to proprietary three party payment systems such as American Express.

159 The OFT and others have published extensively on the topic of payment systems, for example, the OFT report on the UK payment systems (March 2003), available at

www.oft.gov.uk/shared_oft/reports/financial_products/oft658.pdf, and the Payment Systems Task Force reports listed in the final report published in February 2007 available at

www.oft.gov.uk/shared_oft/reports/financial_products/oft901.pdf.

• hold a settlement account at the Bank of England

• be a bank, a building society, or a participant designated by the Bank of England or the FSA

• demonstrate the ability to comply with technical and operational requirements to access the payment infrastructure and clearing services, and

• have credit ratings above certain thresholds.

6.34 Payment systems which are considered systemically important have to comply with the Bank of England's objectives to guarantee the stability of financial systems.¹⁶⁰ Scheme members share the scheme's

administration costs in proportion with their usage, such that larger members cover a greater part of the costs.

6.35 Membership criteria for plastic card networks such as MasterCard and Visa require a member to be a payment service provider (as defined in the Payment Services Directive) and authorised and supervised as appropriate. Any payment service provider needs to meet risk

management requirements, as well as being capable of complying with operating regulations as defined by the card scheme.

6.36 We have been informed that new entrants and smaller players typically enter into agency agreements with existing member banks to access automated payment systems such as Bacs, CHAPS and FPS. The main reason for this is that they do not process sufficient numbers of payment transmissions to find it profitable to apply for membership of the

schemes. Indirect access to payment systems is subject to the criteria set out by the clearing bank serving as agent. These relate to

160 The Bank of England has adopted 14 Principles, consisting of the 10 internationally-recognised Core Principles for Systemically Important Payment Systems and four additional Principles, against which it will evaluate payment systems

(www.bankofengland.co.uk/financialstability/role/risk_reduction/payment_systems_oversight/prin ciples_oversight.htm).

connectivity, their credit policy, rules and procedures laid down by the schemes and criteria set by regulators.

6.37 While not every member of the payment schemes provides for agency arrangements to indirect members, there appear to be enough to allow an indirect member to compare competing offers. It is possible for

indirect members to switch providers, albeit after incurring certain costs.

6.38 Some respondents reported that they encountered difficulties in the past in finding a clearing member willing to act as their agent. The Payment Service Regulations 2009 have clarified the authorisation and prudential regime for payment service providers that are not banks, building

societies or e-money issuers (already authorised or certificated by the FSA), referred to as Payment Institutions (PIs), as well as the rules governing access to payment systems. These regulations have the potential to remove any ambiguity surrounding the regulatory regime to which a payment service provider is subjected to, and may remove some of the difficulties faced by firms with unconventional business models being accepted as an indirect member of a scheme by one of its members.

6.39 The cost of accessing payment schemes is also important for new entrants. We have been informed that the cost of an agency agreement is bespoke and varies primarily with the volume of transactions (there are limited fixed costs) and with different types of transactions

individually priced. Member banks (who offer agency agreements) indicated that larger volumes of transactions allow for discounts, reflecting scale economies. We have not received evidence from

institutions holding agency agreements suggesting that the cost of these agreements is prohibitive and hindering access to payment schemes, although the cost is reported to be higher for new services, such as Faster Payments, compared to older schemes.

6.40 We have not received any evidence suggesting that there are difficulties in meeting the criteria to issue plastic cards.

6.41 Overall, direct and indirect access to payment networks does not appear to raise insurmountable barriers to entry or expansion.