Tata Eyed for UK Faster Payments Takeover
In a major development for the UK's financial infrastructure, Tata Consultancy Services (TCS), a subsidiary of the Indian conglomerate Tata Group, is reportedly in advanced discussions to take over the administration of Britain's Faster Payments Service. The Faster Payments Service plays a crucial role in processing over 90% of salaries, more than 70% of household bills, and nearly all state benefit payments.
The procurement process, characterized by its confidentiality, has seen TCS emerge as a leading contender, potentially surpassing the current administrator, Vocalink, owned by Mastercard. This move comes amidst significant advancements in global payment technology.
While a formal decision is pending regulatory approval, insiders familiar with the matter suggest that TCS has gained an edge in the competitive process. Notably, the decision to consider TCS for this role has drawn attention due to its association with Tata Group, which also owns Tata Steel. Tata Steel has recently announced plans to cut 3,000 jobs in south Wales as part of a transition to greener electric arc furnaces, a decision that has sparked controversy, particularly in light of a £500 million government grant supporting the shift.
The Payment Systems Regulator issued a statement to Sky News, stating, "A competitive procurement process to deliver investments to the UK's payments infrastructure was run by the operator, Pay.UK. As the regulator of the UK's payment systems, we work with the Bank of England to review any proposals. However, the process is currently paused while we await the government's recently announced Vision for Payments, which we expect later this year."
The timing of the decision on the new operator for the Faster Payments Service is reportedly contingent on the release of the government's revised sector strategy, known as Vision for Payments.
A review conducted by Joe Garner, former Nationwide chief executive, emphasized gaps in consumer protection exposed by the surge in faster payments activity in the UK. Garner also highlighted the current system's failure to provide a seamless experience for consumers.
The financial details of the contract awarded to the next operator of the Faster Payments Service remain undisclosed. The outcome of this development is anticipated to have a significant impact on the future landscape of financial transactions in the United Kingdom.
