PART 5Regulation of payment systems

“Payment system” etc

I141Meaning of “payment system”

1

In this Part “payment system” means a system which is operated by one or more persons in the course of business for the purpose of enabling persons to make transfers of funds, and includes a system which is designed to facilitate the transfer of funds using another payment system.

2

But “payment system” does not include—

a

any arrangements for the physical movement of cash;

b

a system which does not make any provision for the transfer of funds by payers, or to recipients, in the United Kingdom;

c

a securities settlement system operated by a person approved under regulations under section 785 of the Companies Act 2006 (provision enabling procedures for evidencing and transferring title);

d

a system operated by a recognised clearing house;

e

any other system whose primary purpose is not that of enabling persons to transfer funds.

3

In this section—

  • “recognised clearing house” has the meaning given by section 285(1) of FSMA 2000;

  • “securities settlement system” means a computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters.

4

The Treasury may by order amend this section so as to—

a

add descriptions of systems or arrangements that are not to be regarded as payment systems, or

b

vary or remove any such description.

I242Participants in payment systems etc

1

This section applies for the purposes of this Part.

2

The following persons are “participants” in a payment system—

a

the operator of the payment system (see subsection (3));

b

any infrastructure provider (see subsection (4));

c

any payment service provider (see subsection (5)).

(But see also subsection (8).)

3

“Operator”, in relation to a payment system, means any person with responsibility under the system for managing or operating it; and any reference to the operation of a payment system includes a reference to its management.

4

“Infrastructure provider”, in relation to a payment system, means any person who provides or controls any part of the infrastructure used for the purposes of operating the payment system.

5

“Payment service provider”, in relation to a payment system, means any person who provides services to persons who are not participants in the system for the purposes of enabling the transfer of funds using the payment system.

6

A payment service provider has “direct access” to a payment system if the payment service provider is able to provide services for the purposes of enabling the transfer of funds using the payment system as a result of arrangements made between the payment service provider and the operator of the payment system.

7

Any reference to participation in a payment system is to be read in accordance with this section, and in particular—

a

in the case of an operator of a payment system, includes a reference to developing the system, and

b

in the case of a payment service provider with direct access to a payment system, includes a reference to entering into an agreement with a person to enable the person to become a payment service provider in relation to the system.

8

The Bank of England is not to be regarded as a participant of any kind in any payment system.