In the current landscape however, in order to be able to transact in real-time, a PSP needs the following:
These base-line requirements mean that Electronic Money Institutions (EMIs) and Payment Institutions (PIs) currently experience barriers to become a Direct Participant of Faster Payments, as they cannot settle their own real-time transactions.
There lies the sponsorship opportunity. Faster Payments has a Participant type called Direct Agency. A Direct Agency is permitted to join FPS without a banking licence or a settlement account but requires an existing Direct Participant to provide settlement services. As an existing Direct Participant of Faster Payments you can settle transactions on Direct Agencies’ behalf by becoming their sponsor for Faster Payments.
Considering the high demand for access to payment services, sponsorship constitutes a substantial additional revenue stream for Direct Participants.
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