Bank of England supports FinTech startups

The Bank of England has allowed access to settlement accounts in the real-time gross settlement system (RTGS), the media reported this week.

Apparently, this move should blow some wind into the sails of innovative fintech companies, boosting competition.

The bank has said that it is now offering access to non-bank payment service providers (PSP), meaning direct access to the UK’s sterling payment system is now possible.

This move, however, is not Bank of England’s alone -- the UK’s Financial Conduct Authority (FCA), has been helping the bank develop this framework for non-bank PSPs to access RTGS, together with HM Revenue and Customs and HM Treasury.

PSPs are still subject to assessment from the supervisors, though. They will need to have their applications reviewed by the payment schemes and BoE first.

"I am delighted that the Bank of England, the Financial Conduct Authority and the Treasury are working together to stimulate competition and innovation in payment services by widening access to the UK’s payment systems to non-bank payment service providers," CityAM cites Bank of England governor Mark Carney as saying.

"In parallel this should support financial stability through greater diversity and risk-reducing payment technologies."

The central bank is currently reviewing its RTGS, and plans a total overhaul by 2020.

Any company can apply for access to RTGS, but will have to "demonstrate compliance with this risk management framework."

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