The Payment Systems Regulator is to narrow the scope of the delivery contract for the UK's New Payments Architecture (NPA) amid concerns about the current programme's "unacceptably high risks".
In gestation for five years, the NPA will replace the UK's current Faster Payments and Bacs retail interbank payment system, with clearing and settlement taking place over a single purpose-built central infrastructure.
The new direction set by the PSR follows a review of the programme, run by Pay.Uk, which uncovered "unacceptably high risks" that the procurment process for the NPA central infrastructures services contract would not provide value for money and could "delay or prevent the delivery of the benefits of the NPA".
The watchdog has determined that Pay.UK must, as a minimum, buy services needed to support single-push payments - which will allow most Faster Payments transactions to migrate to the NPA - and may buy additional services and system functionality only if the PSR does not object .
The obligation on Pay.UK to carry out a competitive procurement will remain. The PSR says that Pay.UK can discharge this obligation by continuing the current competitive procurement or starting a new one.
"A direct award is not the right way forward," states the regulator. "We continue to have concerns about whether Pay.UK would have enough commercial leverage to secure good outcomes that support our regulatory objectives in a direct award. Moreover, Pay.UK’s analysis suggests this option would not be materially quicker than continuing the current competitive procurement."