Payments industry standards

The NPSO, through the work of the International Standards Team, provides a centre of excellence on standards, their development and deployment. We are actively engaged and lead in the development of national and international standards for the payments industry. The International Standards Team coordinates the standardisation activities of the UK’s financial services on behalf of participants, the wider payments industry and other relevant stakeholders. Our work ensures standardisation is driven by business needs, while looking to achieve optimal transparency and sufficient inclusivity.

The key principles of the NPSO’s standardisation work are:

  • Wherever appropriate and practical, to adopt international, European, or domestic standards, in that order, over proprietary standards;
  • The UK should seek to play an active role in developing new international/ European standards that are relevant to the banking and payments industry, and where appropriate work with corporate representative bodies;
  • Standards should be designed to cover the complete end-to-end payment transaction chain, including customer initiation and notification/reconciliation, as well as identification and authentication;
  • Convergence between different standards organisations should be encouraged as part of a wider consolidation process;
  • Standard development must result in practical solutions that seek to minimise impact on the adopters, with due consideration given to legacy migration issues.

What are payments industry standards?

An industry standard is an agreed set of rules that must be adhered to by members or participants within the industry which they wish to interoperate. This recipe of technical and business documentation, when combined, establishes the necessary framework to make payments flow. Composed of detailed specifications, Standards establish a common way of working - both technically and operationally. In the payments industry, these standards range from financial messaging standards like ISO 20022, IBANs or Sort Codes to identifiers standards such as Issuer Identification Numbers (IINs).

Industry stakeholders, such as financial institutions and corporates; third party payment service providers; and governments and central banks, all play important roles in supporting these standards.

Why do standards matter?

We rely on standards every day for the efficient and resilient operation of the payments industry. As the payments infrastructure is a network, standards are vital to ensure the users of that network can interoperate and communicate in a common and understandable way. The payments industry is a network industry, and therefore relies on standards and interoperability.

Interoperability is a vital feature of the payments industry that would not be possible without standards. When consumers make a payment they expect that it will be sent and received irrespective of the bank which they use. Industry standards establish agreed methods for participants and end users of payment services and payments infrastructure to interact in a safe, dependable and predictable manner.

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