Rethinking access: What next-generation payments infrastructure needs to deliver by Colm Lyon, CEO

At the beginning of March, I participated in a UK Finance fireside chat on a topic that doesn’t always get the attention it deserves: access to payments infrastructure. It’s easy to dismiss access as a technical, internal concern. But in reality, it’s one of the most strategically important issues in payments today.

Access isn’t just about connecting to a system. It determines the very DNA of what products you can build, what business models you can pursue, and ultimately, the quality of service your customers receive. Get it right, and you enable innovation, competition, and better outcomes for end users. Get it wrong, and you stifle all three.

Here’s what I shared at the event, and why I believe it’s time for a more serious conversation about how we design next-generation access.

Why access matters strategically (and 17 key considerations)

When a business decides whether to join a payment scheme, it must assess access across three core areas: the scheme itself, settlement, and connectivity.

The scheme itself

• Is information available and easy to access?
• Is the business model supported (i.e. can we participate as intended)?
• What is the approval and joining process?
• What regulatory and scheme obligations apply to participants?
• What are the associated costs?
• Does the business need to be a certain size for it to make economic sense?
• How many counterparties are involved, and what are the associated risks?

The settlement options

• What choices exist: via a sponsoring credit institution, National Competent Authority (NCA), or a hybrid model?
• What are the safeguarding obligations?
• What is the impact on internal reconciliation processes?
• What are the settlement costs for each option?

The connectivity options

• Is there a scheme access layer or gateway available?
• If required, what Technical Service Provider (TSP) options exist, and how restricted is that choice?
• What is involved in testing, time, and overall effort?
• What are the costs for access?
• Is there a minimum threshold required for this option to work?
• Is connectivity file-based or real-time via APIs?

These are 17 considerations that any business must assess when deciding whether to join a scheme. Each one can be either a barrier or an enabler, depending on how access is designed.

From a strategic perspective, access is fundamentally about choice, choice of how you connect, when you settle, and who you partner with. When that choice is limited, competition and innovation suffer. Therefore, we must constantly scrutinise how access to payment systems is designed and delivered.

What the right access means for a firm

Once access is secured, firms can build products and go to market.

Better access enables firms to:

• Launch products: innovation often comes from firms closest to their customers.
• Control costs: payments are sensitive to cost and speed.
• Deliver quality: service focused on customers becomes achievable.
• Manage risk: by ensuring consistent compliance with obligations.

But here is where the picture gets interesting and concerning.

The EU/UK divide: A stark contrast

If you compare the EU and UK today, the differences in access are striking.

In the EU, joining as a direct member is more straightforward, particularly following the implementation of the Settlement Finality Directive in 2025.

The process involves NCA approvals, with timelines of around three months, and there is an ecosystem of providers offering solutions. This makes access achievable for early-stage businesses, with no minimum size requirement. And the costs? Scheme costs are €649 per scheme per year.

In the UK, the picture is very different. Between scheme and TSP costs, one could be looking at a figure well in excess of £100,000. The structure is also more complex, with some models, such as Directly Connected non-Settling Participant (DCnSP) arrangement, requiring firms to engage with multiple institutions, in some cases as many as three.

Transaction costs are higher too: we estimate that for certain firms it could cost more than 20 times as much to process a sterling payment via FPS than to process a SEPA Instant payment.

The impact is clear. The cost of sale for a Payment Service Provider (PSP) is significantly different in the Single Euro Payments Area (SEPA) compared with the UK. That leads to less innovation, less competition, and higher prices for end users, or unsustainable business models based on venture capital funding, as some competitors in the UK offer faster payments for free. Add in the costs of APP fraud reimbursement, which falls on some 1,500 participants, and the gap widens further.

For business leaders and investors, the opportunities to bring new payment services to market look brighter in the EU. This should concern anyone who cares about the UK’s position as a leader in payments.

One thing that is essential for next-generation design

To foster innovation and competition, we need to provide all firms with the ability to go to market with payment services that are cost-effective, feature-rich, and run with a customer-focused approach while managing risk and maintaining compliance.

The trends are clear. Real-time and account-to-account payments are an inevitable wave of change. Take embedded payments as an example, tipping a music artist directly from Spotify without leaving the app. Behind the scenes, a Third-Party Provider (TPP) initiates a payment with the payer’s account-holding bank (their Account Servicing Payment Service Provider, or ASPSP) with the payer’s consent. The payment is an instant push from a funded account, lowering costs, risk, and fraud while improving the user experience and settlement speed.

Alongside this trend, we see a growing desire for resilience and sovereignty in payments. These trends will only accelerate as payments are sensitive to cost and speed.

Earlier I outlined 17 considerations under which access can be assessed. Recognising that good work has been done on the settlement side, I believe the focus should now shift to the scheme and connectivity layers. We need a focused discussion about a scheme gateway for real-time FPS access. This means decoupling the core clearing system from its access layer, an approach that is common across the globe. This is driven by the shift to account-to-account payments.

We can achieve it by having a scheme-owned, low-cost gateway or access layer that removes the commercial and minimum threshold barriers. But technology is only half the answer. We also need to rethink the access model itself.

A clearer path for sponsored access

Today, if a firm joins through a sponsor under the DCnSP arrangement, the sponsor is considered the direct member. That results in the sponsor carrying obligations that also fall on the participant, a regulated firm. There was a good discussion about this at the UK Finance Access Models event.

This risk limits the number of firms willing to offer sponsorship, constraining choice of partners for those looking to become a DCnSP and keeping the market smaller than it could be.

To address this, we should consider evaluating the FPS membership model. Along with “direct” and “indirect” participants, we should look to create a category called “Non-Settling Direct Member” (this could replace DCnSP where the sponsor is the member) with clearly defined obligations for the direct member and its settlement partner. If a firm is treated as the direct member of the scheme, with its own responsibilities and direct accountability, then there is no “sponsor” but a settlement provider.

The risk is reduced, and more institutions may be willing to offer settlement services as a result.

This is not just semantics. It would create a real incentive for more competition in the space, giving firms more choice about who they partner with for access.

The combined impact

Of the 17 considerations I noted, a scheme gateway, plus a clearer Non-Settling Direct Member model, would improve twelve or thirteen of these considerations. It would:

• Reduce costs by removing commercial and minimum threshold barriers.
• Lower risks by clarifying regulatory obligations and giving sponsors clearer boundaries.
• Increase choice for PSPs in how and with whom they connect.

The result would be remarkable. In my view, it would be the greatest catalyst to fuel competition, innovation, and investment in the UK’s payment services industry.

 For those interested in the full discussion, you can check out the UK Finance event report here.