The Estonian-founded, London-based money transfer company, TransferWise, has become the first non-bank payment service provider in the UK’s Faster Payments Scheme.
By being part of the scheme, TransferWise will be able to directly connect and settle with the scheme’s 24/7 real-time payment infrastructure, opening the possibility to offer payment services on an even footing with the biggest banks, Faster Payments Scheme said in a statement.
The move was possible because the Bank of England, the UK’s central bank, opened up the real time gross settlement accounts to non-bank payment service providers in 2017, meaning non-banks can directly offer real-time payments to their customers. Previously, non-banks had to rely on a commercial bank that had a settlement account at the Bank of England to connect to the Faster Payments Scheme.
Increasing the stability of the UK financial system
TransferWise is the first non-bank payment service provider in the UK to enter the scheme.
According to Craig Tillotson, the CEO of Faster Payments, the fact that non-banks can join the scheme will “substantially increase the stability of the UK financial system, by breaking the critical link in financial exposure between innovative payment service providers like TransferWise and the commercial banks they previously had to use to deliver payment services”.
Faster Payments Scheme is a UK-based company that enables mobile, internet, telephone and standing order payments to move quickly 24 hours a day. At its launch in 2008, Faster Payments was the first new payments service to be introduced in the UK for more than 20 years.
TransferWise was founded by Estonians Taavet Hinrikus and Kristo Käärmann in 2011, and it’s based in London, the UK.