Pay.UK, the recognised operator and standards body for the UK’s interbank retail payment systems, has launched a flexible liquidity framework for Faster Payments Net Sender Caps (NSC), opening the door to a broader mix of participants.
The move tackles a major hurdle that has kept non-bank and non-traditional payment service providers (PSPs) from joining the system directly, by cutting the amount of pre-funding needed and making access cheaper.
The operator has been working to widen entry to UK payment systems since 2018, over which time the number of firms directly participating in Faster Payments has risen from 26 to 47, a sign of a more varied and competitive market. Non-banks in particular stand to benefit financially, gaining the ability to manage their funds more effectively, deploy capital more efficiently and operate with greater flexibility.
Under the previous arrangement, direct settling PSPs were required to hold a fixed Minimum Net Sender Cap (MNSC) and Peak Contingency Value (PCV) in their Bank of England Pre-Funding Account at all times. The new approach lets participants put forward their own NSC limit, with Pay.UK continuing to manage compensating controls in a manner similar to the Bacs Debit Cap. This gives firms more room to manoeuvre while a centrally governed structure preserves market stability and liquidity discipline.
According to Pay.UK, the updated framework will improve how liquidity is used across the ecosystem, allowing PSPs to better manage their real-time gross settlement (RTGS) account balances and adjust their NSC settings outside of peak periods. Firms that prefer the existing prescribed MNSC and PCV values can continue to use them.
Pay.UK said it is pursuing a focused strategy aimed at delivering ongoing reliability, value and efficiency for its participants and the wider users of its payment systems. With the UK payments market increasingly moving beyond traditional banking models, the change represents a step towards a more open and accessible ecosystem.
Pay.UK COO David Morris said, “This is an important step forward in making Faster Payments more accessible, and flexible. It gives participants greater control over their liquidity by lowering barriers to entry without compromising the robust controls that underpin confidence in the system.”
NatWest head of payments Simon Eacott said, “We welcome the introduction of the new, more flexible Net Sender Cap model for Faster Payments. Allowing participants to set caps aligned to their own payment flows and risk profiles is a positive step forward for the industry. For NatWest, this approach supports more efficient liquidity management while maintaining the resilience and reliability that customers expect from real-time payments. We’re pleased to be working with Pay.UK on this initiative and see it as an important step forward in how Faster Payments continues to scale safely and effectively.”
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