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Transferwise becomes first non-bank to join Faster Payments

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Transferwise last week became the first non-bank to join the UK's Faster Payments system, in a landmark step which the Bank of England (BoE) hopes will boost competition in the payments sector.

The fintech unicorn, which provides foreign exchange services, joined the system last Friday, the BoE announced today. giving it access to the same financial plumbing that Britain's biggest banks currently use.

The firm, officially designated as a payment service provider, now has access to a settlement account at the BoE, meaning transactions with other banks are settled directly in central bank money.

Read more: Fintech startups can now get direct access to the UK's payments system

Transferwise will no longer have to rely on other banks to transfer money, potentially cutting out a layer of costs. The Faster Payments system is one of a number of crucial parts of the City's financial services infrastructure, allowing much quicker delivery of money into people's accounts than the older Bacs system.

BoE governor Mark Carney said "stimulating competition and innovation" will boost financial stability and consumers' experience.

The BoE said one of the challenges in adding Transferwise to the scheme was opening up its real-time gross settlement system (RTGS).

Read more: Its official: Transferwise closes $280m funding from top investors

Transferwise's addition follows the BoE opening up the RTGS service to applications from non-banks in July 2017, potentially allowing access to other payment initiatives like Bacs, Chaps, Link and Visa as well. Other firms can also apply for access.

Hannah Nixon, managing director of the Payment Systems Regulator, said: “That non-bank PSPs can now directly participate in interbank payment systems on a level playing field is very good news. Promoting simple, fair and timely access to payment systems remains one of the cornerstones of the PSRs work."

Read more: Transferwise is launching a consumer account and debit card

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