The Emerging Payments Association (EPA) has published a first-of-its-kind guide to address the need for increased access to bank accounts.
The report, entitled ‘Guide to Payment Account Providers’, includes the contribution of ten account providers from the United Kingdom (UK). Among them are e-money institutions, digital banks and other Account Servicing Payment Service Providers.
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The guide examines what kind of accounts they offer, their risk appetite, and the schemes they support. It also provides practical guidance for those opening accounts with them.
The payments industry has often been criticised for closing its doors to businesses, due to an increased level of de-risking by UK banks.
“De-risking” refers to financial institutions exiting relationships with and closing the accounts of clients considered “high risk.” There is an observed trend toward de-risking of money service businesses, foreign embassies, non-profit organizations, and correspondent banks, which has resulted in account closures in the US, the UK, and Australia.
However, this report extended invitation to all UK providers for contribution.
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By GlobalData48% of companies have been refused a banking service
The EPA previously launched a survey on banking access to its members, with 48% of respondent companies having been refused a banking service.
However, the EPA’s guide indicates that the industry has made much progress in recent years in addressing this problem. The EPA encourages efforts by EMIs, PIs, digital banks to open and keep open bank accounts for safeguarding funds and everyday trading.
The association aims to secure a widely accepted understanding of the scale and nature of de-risking and its impact on financial services and businesses.
The guide will act as a live document, with more payment providers lined up to contribute to the next edition in six months’ time.
“The guide recognises the work of U.K. Finance and its Access to Payment Account Services, a Good Practice Guide, which provides an excellent summary of the regulatory and legal requirements for providers,” the EPA said.
Tony Craddock, Director General of the Emerging Payments Association, commented:
“We must ask ourselves, is the market for bank accounts open and competitive? This report highlights that with some notable and worthy exceptions, there are precious few providers of bank accounts to companies operating in payments which is approaching a market failure. We call on the government and regulators to sit up and take notice.”
The EPA pledges to continue to work with UK Finance and other trade bodies to champion increased open access to accounts and payments within the UK.
