As the Treasury's consultation on 'Modernising Payment Services Regulation' closed on 6 October, Token.io's Public Policy and Strategy Director, Robert Sullivan, has urged policymakers to get the future regulatory framework for open banking right — warning that the UK's position as a global leader in the market depends on it.
Sullivan highlighted key questions raised by the consultation around how Account Servicing Payment Service Providers (ASPSPs), such as banks, should support and enable open banking as the UK moves towards a more unified long-term regulatory framework.
Token.io's position is that ASPSPs should continue to offer Third-Party Providers (TPPs) free access to basic open banking APIs, whilst retaining the ability to charge for enhanced or premium functionality. The company argues that any commercial model should incentivise TPPs to adopt premium APIs through added value and functionality — rather than restricting access to the free basic services that have formed the backbone of open banking to date.
The firm also believes ASPSPs should be required to provide APIs for Variable Recurring Payments (VRP), with charges for TPP access sitting within commercial open banking schemes such as the UK Payments Initiative (UKPI). Token.io says this step is critical to giving merchants the coverage and certainty needed to adopt VRPs at scale, whilst addressing competition law concerns that have hindered its wider expansion.
"The UK has established strong foundations in open banking," said Sullivan. "The next step is creating the conditions for those foundations to deliver genuine scale and, eventually, support the National Payments Vision's ambition for ubiquitous account-to-account payments."
