PSR, PSF, SPP, TPSP, NPSO*… since the inception of Open Banking it’s as though the payments industry has become a veritable alphabet soup of acronyms as organizations are created to control all of the changes taking place. It’s confusing to say the least, so let‘s start by deciphering just a manageable portion of things and begin with understanding the New Payments Architecture (NPA).

What is the New Payments Architecture?

Open banking kicked off a total revolution focused around driving new efficiencies in business payments. The New Payments Architecture — a UK regulatory change that will be rolled out over the next five years — is a main part of this. It will introduce important new features to UK payments, the most significant of which is the end of the Bacs three-day clearing cycle. 

As payment systems modernize and organizations become accustomed to real-time settlement, clearing cycles of multiple days will simply no longer be acceptable. Bacs Direct Credits and Direct Debits, as well as current Faster Payments, will ultimately be replaced by a new credit transfer that offers 24/7 clearing cycles and makes use of the ISO 20022 file format. This new instrument will replace the Bacs Standard 18 format and ISO 8583 format that’s currently used by Faster Payments. Direct debits will still continue to be widely used, but the way they’re processed will be transformed to make them easier, faster and more secure.

The New Payments Architecture will also introduce a new accredited role into the payments landscape, that of the Third-Party Service Provider (TPSP). This is a new type of service provider that will make access to the Simplified Payments Platform possible. TPSPs will also deliver a whole range of additional enhancements that are designed to make payments more secure and easier to use.

For a complete analysis of the New Payments Architecture, as well as discussion on how Open Banking is changing the payments landscape, check out the whitepaper “Open Banking: Changing the Way Businesses Pay and Get Paid.”

You can also check out these additional resources on Open Banking:


Everything You Need to Know About Open Banking, PSD2 and Other Changes in the UK Payments Landscape


Open Banking’s impact on the payments industry


Understanding the difference between Open Banking and PSD2


Benefits of Open Banking: How it Helps Small-Mid-sized Businesses Improve Cash Visibility and Transaction Reporting

PSR: Payment Systems Regulator
PSF: Payments Strategy Forum
SPP: Simplified Payments Platform
TPSP: Third-Party Service provider
NPSO: New Payment Systems Operator

Posted by Emily Rodenhuis

Emily Rodenhuis is the Managing Editor of SmartPayments and a creative writer specializing in demand generation and social media. Her work has been featured by BankNews, InfoSecurity, AFP magazine and more.