The Joint Regulatory Oversight Committee (the Committee) has published an update[1] on the significant progress made since it outlined its open banking vision in April and sets out plans to deliver a new generation of payment products and services.
It has also published a response[2] to the Variable Recurring Payments (VRP) Working Group's blueprint for rolling out non-sweeping VRP (ie payments between a customer and a business). This seeks to ensure that consumers and businesses can benefit from innovative, flexible payment methods across a range of different sectors.
The blueprint recommends payments to regulated utilities, regulated financial services, and central and local government as the first step in creating wider uses for VRP and open banking payments.
Firms are encouraged to give their views on what is needed for the commercial model which will allow for the rollout of non-sweeping VRP[3]. The Committee is now calling on Pay.UK and Open Banking Limited[4] (OBL) to chair implementation groups to deliver the functional enhancements and dispute mechanism needed for consumers and business ahead of the delivery of non-sweeping VRP next year.
The Committee is also considering the Future Entity Working Group’s recommendations for the design and implementation of the future entity. The future entity will be instrumental for the future success of Open Banking in the UK, and the Committee will make a decision as to its recommended structure, governance and funding model early next year. In Q1 next year, the Committee will publish this decision and the immediate steps which will be taken to establish the future entity.
Today’s statements from the Committee mark a significant step towards meeting the Future of Payments Review recommendations. The Committee is committed to ensuring this momentum is maintained and will continue to work with industry to drive this forward.
The co-chairs of the Committee, PSR Managing Director, Chris Hemsley, and FCA Executive Director, Consumers and Competition, Sheldon Mills said:
'It’s really encouraging to see such strong growth of open banking in the UK and how much progress has been made since April.
'The whole open banking ecosystem has worked collaboratively to deliver this progress.
'We now expect to see consumers and businesses starting to benefit from new and innovative ways of managing and making payments on a wider scale.'
Notes to editors:
- The PSR’s consultation[5] on what is needed to expand VRPs is open until 2 February 2024.
- More information about the Committee and the industry-led VRP and future entity working groups can be viewed here[6].
- Variable Recurring Payments (VRPs) are a mechanism by which customers can safely connect authorised payments providers to their bank account so that they can make payments on the customer's behalf, in line with agreed limits.
- At present, VRP use is limited to when individuals want to move money between their accounts (known as sweeping). Non-sweeping VRP refers to VRP use beyond this.