What is a payment scheme?


 

A payment scheme is a body that sets the rules and technical standards for the execution of payment transactions using the underlying payment systems. Payment schemes manage the day-to-day operations of the payment systems and processes and ensure any regulatory requirements associated with the processing of payments are met.

Characteristics of a UK payment scheme:

  • offers a service to move money between parties
  • has a governance structure that includes independent directors with a mandate to represent the views of all service users, together with directors appointed from the members of the scheme 
  • custodians of the payment scheme rules and technical standards for operation of the payment schemes
  • responsible for the operation of the underlying payment systems 
  • complies with regulatory aspects governing payment schemes and systems
  • has access criteria and an application process for joining.


Scheme rules and procedures

Each payment scheme’s rules and procedures can be regarded as an ‘instruction manual’ which dictates how money is moved from Bank A to Bank B within the relevant underlying payment system and payment infrastructure.

Adherence to payment scheme rules is mandatory for all organisations accessing payment systems. 

Examples of the areas payment scheme rules and technical standards cover include:

  • currency of the money to be exchanged e.g. UK sterling
  • timelines to be observed by payment service providers when executing a payment transaction
  • the standard data formats used to exchange messages between banks. 


UK payment schemes:

This site provides information about the following payment schemes operating in the UK:

  • Bacs Payment Schemes Limited
    Bacs is the scheme responsible for the payment system that enables electronic transfer of funds directly to a specified bank account (Direct Credit) and the collection of pre-authorised debits on a payer’s bank account (Direct Debit).
  • The Belfast Bankers’ Clearing Company Limited (BBCCL)
    BBCCL is the scheme responsible for the oversight of the systems used for processing of cheques and other paper instruments in Northern Ireland.
  • CHAPS Clearing Company Limited
    CHAPS Co is the scheme responsible for the CHAPS payment system that enables real-time, high-value sterling payments where payments are settled over the Bank of England’s Real Time Gross Settlement (RTGS) system.
  • Cheque and Credit Clearing Company (C&CCC)
    C&CCC is the scheme responsible for managing the processing of cheques and other paper payment instruments in England, Scotland and Wales.
  • Faster Payments Scheme Limited
    Faster Payments enables electronic real-time payments via internet, telephone and mobile banking applications, as well as standing orders.
  • LINK Scheme
    LINK is the scheme responsible for end-users’ access to cash (amongst other activities) via the UK’s ATM network.
     

Other payment schemes:

  • This site does not currently include information on the global card schemes; more information on card issuance or merchant acquiring can be found via The UK Cards Association.