Indirect Payment System Access for Payment Service Providers
Lloyds Banking Group is a subscriber to the industry ‘Code of conduct for Indirect Access to UK Payments Systems’. The commitments given under this code can be found here:
As a provider of an extensive range of banking services to our own customers we are well versed in the needs of other Financial Institutions and in particular recognise the critical importance of payment services to those institutions in fulfilling their strategic aspirations and to deliver their own unique proposition to customers.
Our position as a leading participant in the UK payments systems enables us to bring together our extensive industry wide knowledge and technical capability to provide access to the Faster Payments, Bacs, CHAPS and Cheque Clearing systems that is focussed on meeting the individual needs of a range of Payments Service Providers (PSPs) for the transfer of funds within the UK.
Indirect Access enables a PSP to provide their customers with the full range of UK domestic payment methods without having the obligations, costs and meeting the inherently stringent operational and technical requirements of being a direct Member of the Payment Systems. In addition Indirect Access can provide a more flexible choice of access options to more than one payments system through a common interface
We provide a range of Indirect Access services for Payment Service Providers appropriate to the two different ways they operate their customer accounts and the management of payments to and from those accounts namely as an Agency Bank or as a Non-Agency PSP.
Suitability |
Agency Bank |
Non-Agency PSP |
|---|---|---|
|
Suitability Credit Institutions - Banks |
Agency Bank Y |
Non-Agency PSP |
|
Suitability Credit Institutions – Building Societies |
Agency Bank Y |
Non-Agency PSP Y |
|
Suitability Credit Unions |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Authorised E- Money Issuer |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Small E-Money Issuer |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Authorised Payment Institutions |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Small Payment Institutions |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Payment Initiating PSP |
Agency Bank N |
Non-Agency PSP Y |
|
Suitability Account Information PSP |
Agency Bank N |
Non-Agency PSP N |
Note: The choice of services offered by Lloyds will be subject to the eligibility criteria below.
Agency Banks
Payment Service Providers that are eligible as an Agency Bank can be provided with their own sort codes to be able to allocate their own individual customers with a unique account number within that sort code.
The sort code is used to uniquely identify the PSP within each of the Payment Systems in its own right in the same way as a clearing bank. This enables each customer’s account to be uniquely identified in payment instructions which is essential for payment methods such as Direct Debit and for ease of regulatory compliance checking.
To be eligible as an Agency Bank, the PSP must meet the criteria set by each UK payment scheme which require at a minimum; that the PSP to be authorised for payments services activities by the UK Financial Conduct Authority or to have a passport for such authorisation from the equivalent regulatory authority of another member state of the EEA.
In addition, the commercial and other risk based acceptance criteria (described in the Next Steps section below) will be assessed by us according to the payment systems access and other services required. Settlement of the value of payments processed through the Payment Systems requires the use of an account with us and will be subject to normal client due diligence assessment prior to confirmation of acceptance.
Non-Agency PSPs
As a Payment Service Provider you can be provided with an account within our books if appropriate and therefore identify individual customers through a unique reference or roll number within payment instructions. All payments are made to and from the account held with us and then reflected in the PSP’s own books through reporting and reconciliation services using the unique reference.
To arrange to transfer funds on behalf of a customer, a Non Agency PSP will need to be authorised for payments services activities by the FCA or to have a passport for such authorisation from the equivalent regulatory authority of another member state of the EEA. The provision of an account to support the requirement of a Non-Agency PSP will be subject to our standard eligibility criteria and appropriate customer due diligence checks.
In addition, other eligibility criteria may apply depending on the nature of each of the payments service and other facilities required as outlined in the Next Steps section below.
Services provided
We provide indirect access services to the following UK Payment Systems and associated services.
Sort Codes
As a Member of the UK Payment systems, Lloyds Banking Group manages the administration of Agency sort codes on behalf of eligible Payment Service Providers where we have responsibility for their indirect access. We can arrange for the setup of new Agency sort codes for Payments Services Providers that meet the eligibility criteria of the scheme and where we agree to provide indirect access for that scheme.
Where we agree to provide indirect access services to an existing Payment Service Provider that already has their own Agency sort code(s), we can arrange to transfer the sort code to our sponsorship where indirect access provision for that Payment system allows for the transfer (i.e. excludes Cheque & Credit Clearing). However, our ability to transfer sort codes in respect of indirect access service we provide for Bacs and CHAPS may be restricted depending on your requirements and we may offer other options to enable the transfer of your payments that would not include the transfer of existing sort code(s).
Bacs
The Bacs payment system provides a bulk payment capability for the transfer of payment to and from the PSP’s customer’s account on a 3 day processing cycle (with simultaneous debit and credit on day 3) through either an agency sort code or an account with us.
The Bacs service is used by PSPs for sending funds through the Direct Credit service and optionally for the collection of funds from an Agency Bank PSP’s customer’s account through Direct Debit. Credit Institutions can offer their corporate customers the ability to utilise the Bacs service in their own right through our corporate customer sponsorship.
As a Bacs sponsor bank we can also provide sponsorship for access to the Current Account Switching Service and the Cash ISA Transfer Service for eligible organisations.
CHAPS
The CHAPS payment system provides a same day real time gross settlement payment service intended for high value guaranteed funds transfers. CHAPS is used by PSPs for commercial payments or for inter bank settlements and can be utilised through an Agency sort code for customer accounts or through an account with Lloyds,
Cheque & Credit Clearing
The cheque and credit clearing system provides for the exchange of cheque and Bank giro credits via the Image Clearing System on a next day processing cycle. The Image Clearing System will fully replace the 3 day paper clearing system which will be withdrawn during 2018.
Cheques collected by the PSP on behalf of their customers are submitted through Lloyds to the issuing bank for payment and credited to the PSP account with us or for customer accounts under an agency sort code. Cash and Cheques deposited at other banks for the benefit of a PSP’s customer are received through the credit clearing.
Cheques presented for accounts held under an Agency sort code are passed to the Payment Service Provider for a pay decision in accordance with the C&CCC rules. Where a customer with a cheque book issued by a Credit Institution PSPs pays a beneficiary by cheque, Lloyds will receive the cheques presented at other banks through the clearing and presents it to the issuing Credit Institution for confirmation of payment.
Faster Payments
The Faster Payments system provides PSPs with the capability to provide their customers with the ability make and receive immediate payment to or from another UK bank through the use of an Agency Sort Code or an account with us. Faster Payments provides a guaranteed funds transfer service and operates on a near real-time basis.
Availability of Services
|
Payment System |
Service Provided (Transfer or Funds for PSP's customer) |
Agency Banks (Credit Institutions) |
Agency Banks (E-Money Issuer, Authorised Payment Institution) |
Non Agency PSP |
|---|---|---|---|---|
|
Payment System All |
Service Provided (Transfer or Funds for PSP's customer) Agency Sort Code |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP N |
|
Payment System All |
Service Provided (Transfer or Funds for PSP's customer) Bank Account (Settlement) |
Agency Banks (Credit Institutions) Y (Payment System Settlement) |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y (Payment System Settlement) |
Non Agency PSP Y (Payments) |
|
Payment System BACS |
Service Provided (Transfer or Funds for PSP's customer) Direct Credit |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y |
|
Payment System BACS |
Service Provided (Transfer or Funds for PSP's customer) Direct Debit |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP N |
|
Payment System BACS |
Service Provided (Transfer or Funds for PSP's customer) Corporate Sponsorship |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) N |
Non Agency PSP N |
|
Payment System BACS |
Service Provided (Transfer or Funds for PSP's customer) Direct Technical Access |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y (BACSTEL-IP only) |
|
Payment System CHAPS |
Service Provided (Transfer or Funds for PSP's customer) Commercial Payments |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y |
|
Payment System CHAPS |
Service Provided (Transfer or Funds for PSP's customer) Financial Transfers |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) N |
Non Agency PSP N |
|
Payment System Cheque & Credit |
Service Provided (Transfer or Funds for PSP's customer) Credits |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y |
|
Payment System Cheque & Credit |
Service Provided (Transfer or Funds for PSP's customer) Cheque Deposits |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y |
|
Payment System Cheque & Credit |
Service Provided (Transfer or Funds for PSP's customer) Cheque Issued (customer cheque books) |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP N |
|
Payment System Faster Payments |
Service Provided (Transfer or Funds for PSP's customer) Payments |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) Y |
Non Agency PSP Y |
|
Payment System Faster Payments |
Service Provided (Transfer or Funds for PSP's customer) Direct Technical Access |
Agency Banks (Credit Institutions) N |
Agency Banks (E-Money Issuer, Authorised Payment Institution) N |
Non Agency PSP N |
|
Payment System Cash ISA Transfer |
Service Provided (Transfer or Funds for PSP's customer) Registration and Access Security |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) N |
Non Agency PSP Y |
|
Payment System Current Account Switching |
Service Provided (Transfer or Funds for PSP's customer) Registration and Access Security |
Agency Banks (Credit Institutions) Y |
Agency Banks (E-Money Issuer, Authorised Payment Institution) N |
Non Agency PSP N |
Access methods
We can provide a choice of access methods both indirect access, through our own products and infrastructure, or via a direct technical connection to the payment system as described below. The Connectivity choices available are dependent on the payment system being used.
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) |
Outbound/Inbound |
Connectivity |
Agency Banks (Credit Institutions) |
Agency Banks (EMI/API) |
Non Agency PSP |
|---|---|---|---|---|---|---|---|
|
Payment System BACS |
Access Indirect |
Service Provided (Transfer of Funds for PSP's customer) Commercial Bureau |
Outbound/Inbound Outbound |
Connectivity Bureau Specific |
Agency Banks (Credit Institutions) N |
Agency Banks (EMI/API) N |
Non Agency PSP Y |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Lloydslink Online Banking |
Outbound/Inbound Outbound & Inbound |
Connectivity Internet Browser |
Agency Banks (Credit Institutions) N |
Agency Banks (EMI/API) N |
Non Agency PSP Y |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Entry Collection Service (Bacs) |
Outbound/Inbound Inbound only |
Connectivity IBM Mailbox, Connect:Direct |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System |
Access Direct |
Service Provided (Transfer of Funds for PSP's customer) BACSTEL-IP |
Outbound/Inbound Outbound |
Connectivity Internet, Bacs approved Software |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP Y |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Enhanced Transmission Service |
Outbound/Inbound Outbound & Inbound |
Connectivity Vocalink specification |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) SWIFT Transmission Service |
Outbound/Inbound Outbound & Inbound |
Connectivity SWIFT FileAct |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System CHAPS |
Access Indirect |
Service Provided (Transfer of Funds for PSP's customer) SWIFT |
Outbound/Inbound Outbound & Inbound |
Connectivity SWIFT FIN |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Lloydslink Online Banking |
Outbound/Inbound Outbound & Inbound |
Connectivity Internet |
Agency Banks (Credit Institutions) N |
Agency Banks (EMI/API) N |
Non Agency PSP Y |
|
Payment System Cheque & Credit - Image Clearing System |
Access Indirect |
Service Provided (Transfer of Funds for PSP's customer) Out clearing - Cheques & Credits Deposited |
Outbound/Inbound Outbound |
Connectivity Courier, Agency Cheque Deposit, Agency File Transfer |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP Y |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Cheques Issued (In Debit Clearing) |
Outbound/Inbound Inbound |
Connectivity Agency Portal, Agency File Transfer |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) N |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Entry Collection Services (In Debit) |
Outbound/Inbound Inbound |
Connectivity IBM Mailbox, Connect:Direct |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) N |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Credits received (In Credit Clearing) |
Outbound/Inbound Inbound |
Connectivity Agency Portal, Agency File Transfer |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP Y |
|
Payment System Faster Payments |
Access Indirect |
Service Provided (Transfer of Funds for PSP's customer) Faster Payments for Financial Institutions |
Outbound/Inbound Outbound & Inbound |
Connectivity SWIFT FIN |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Entry Collection Service (FPS) |
Outbound/Inbound Inbound Only |
Connectivity IBM Mailbox, Connect:Direct |
Agency Banks (Credit Institutions) Y |
Agency Banks (EMI/API) Y |
Non Agency PSP N |
|
Payment System |
Access |
Service Provided (Transfer of Funds for PSP's customer) Lloydslink Online Banking |
Outbound/Inbound Outbound & Inbound |
Connectivity Internet Browser |
Agency Banks (Credit Institutions) N |
Agency Banks (EMI/API) N |
Non Agency PSP Y |
Other Services
Our approach to supporting customers is to fully understand their total needs and therefore we recognise that indirect access to the payment systems is only part of the full range of services that a Payment Service Provider may need to offer their customers. We can provide the other services to eligible Payment Service Providers as part of our overall Payment Services Provider proposition. Please contact us for more details of the following services:
Branch network
Our branch network can be used by Payment Service providers to deposit cash and cheques and withdraw cash from their own accounts. In addition, for Payment Service Providers that are eligible for Cheque and Credit Clearing, we may extend this facility to their customers for a pre-arranged basis for specific customers and locations and subject to compliance with Lloyds Banking Group policies including Anti-money laundering, Credit and other risks.
Bulk Cash Services
We can both supply Payment Services Provider with cash and accept deposits in bulk in order to satisfy their own requirements for provision of cash services to their customer.
UK Cheque Clearing (Euro)
For eligible UK Payment service Providers that wish to issue Euro cheques we can provide access to the UK Euro cheque clearing.
Fees & Charges
We will take a holistic view of each individual customers needs and will provide an overall solution to suit the specific needs of each Payment Service Provider according to their requirements. We will offer the appropriate combination of products and services to meet these needs taking into account the volumes, values and funding requirements. Our fees and charges will therefore reflect the unique combinations of services provided and maybe subject to negotiation dependent on the various services, transaction volumes and options chosen.
Charges for indirect access to payment systems are based on the following elements:-
- One off setup fees according to the combination of services and channels required
- Regular fees where applicable to the different services, channels and options required
- Transaction fees specific to the payment type and volumes processed
- Fees for account management, credit arrangements and liquidity requirements
Next Steps
Register your Interest
If you have a requirement for indirect access to any of these UK Payment Systems we can help. We have teams with expertise in Banks and individual Specialist Financial and Technology sectors to assist with solutions for your specific business needs.
To register your interest in indirect access and to obtain further information please contact:
Peter Ventham
LLOYDS BANK COMMERCIAL BANKING
Financial Institutions
25 Gresham Street,
London,
EC2V 7HN
Email: peter.ventham@lloydsbanking.com
Your enquiry will be directed to the relevant team that will be responsible for considering your request and a member of that team will contact you. They will discuss your requirements in more detail and advise what information that will be required to progress with an application for indirect access.
Lloyds Banking Group’s approach to being the best bank for our clients means that a decision to accept an application will only be made if the indirect Access services are appropriate for you, fully meet your requirements and can be accommodated within appropriate regulatory and legal obligations and commercial requirements.
The decision will therefore take into account the following information that will be required from you at different stages of the application:-
- Description of the nature of the PSP’s business in the UK to consider how support from Lloyds Banking Group is in line with our strategic objective in Helping Britain Prosper
- Confirmation of, or evidence of application for, authorisation by the FCA (or equivalent EEA Authority) for payment services permission.
- Explanation of the services you provide to customers and the resultant requirements for payment system access and general banking services being sought. An understanding is required of the types of customers and geographic regions you serve along with payment types supported (e.g, Domestic, Cross - Border) in order to assess suitability, capability and capacity to provide the service sought.
- Provision of annual and daily volumes and aggregate payment values (including forecast of future needs) to assess suitability for the indirect access services sought and to assess significance to the market, impacts on payment system settlement values and Lloyds Banking Groups’ respective risks and liabilities. These will also be used to assess capacity requirements, operational impacts and risks and to determine applicable charges.
- Extent of the commercial relationship required by the applicant entity and any wider associated Group structure that may also require banking services including details of any existing relationships with other banks.
- Current and future liquidity and funding requirements for assessment of credit requirements.
- Know your customer requirements will include requiring evidence of your company registration, organisation ownership, structure and governance including authorised individuals and sources of funding. Confirmation of adherence to applicable laws, regulations, codes of conduct and legal obligations will also be required.
- Extended customer due diligence requirements for Payment Service Providers will require evidence of policies, processes and compliance controls in place to assess compliance with Anti-Money Laundering and Financial Crime regulations and FCA/PRA conduct requirements.
Depending on the nature of your request and availability of information required it may take up to 3 months to fully consider your application and advise you of the final outcome.