Modulr, the Payments as a Service API platform for digital businesses, has today announced it has become one of a few non-bank Payment Service Provider (PSP) participants of Bacs, the Pay.UK-operated payment system. The move sees Modulr take full control of its Bacs payment flows and removes any reliance on third-party banking partners.
The move will provide its clients with a direct solution and deliver an easier, simpler and more reliable service. It will also lead to reduced operational costs, allowing Modulr to pass on cost savings directly to customers.
Bacs is one of the most important and popular payment methods in the UK. In 2018, combined direct Bacs transactions - credit and debit - totalled a volume of 6.4bn, worth nearly £5trn across the year.
Modulr, the four-year-old FinTech, achieved this latest direct participation of Bacs under a new settlement account policy directive initiated by the Bank of England. This new directive is a key part of the broader policy objectives for organisations such as the BoE, FCA, Payment systems regulator (PSR) and HM Treasury, to drive greater competition and innovation in UK payments.
Modulr believes that its direct participation to Bacs sparks the third evolution of fintech, where a FinTech is fully embedded in the UK’s payments infrastructure.
Myles Stephenson, Modulr CEO, comments: “We see this as the furthest step yet taken in the history of fintech. We’ve moved from licenses, to third-party systems and card rails, to the third stage of fintech evolution; direct access to payments systems and infrastructure.
“This means we’re further embedded in the payments landscape. This sets the bar for the competition, offering the most reliable way to ensure a friction free customer experience.
“By removing our reliance on third-party systems, and tapping directly into the source, we can build for scale and have total control over our access to the wider infrastructure. This move, along with direct access to Faster Payments, reflects our determination to build a digital payments infrastructure fit for future-facing businesses.”
Matthew Hunt, COO of Pay.UK, the home of Bacs, Faster Payments, and Cheques, says: “Our core purpose at Pay.UK is to enable a vibrant UK economy and, as driving more participation and involvement in payments is a vital part of this, we are pleased to welcome Modulr as a new non-bank participant to Bacs.”
The news follows the recent announcement that Modulr became a direct participant in the Faster Payment Service (FPS) on Friday 7th June 2019. Modulr is one of a small number of non-bank payment service providers (PSP) to hold an account in the Bank of England’s (BoE) Real-Time Gross Settlement (RTGS) system, allowing the FinTech to settle payment obligations in central bank money under its Modulr FS Limited entity (FRN 900573).