Kristo Käärmann, CEO and co-founder, TransferWise, says the move is "game changing" for firm.
“The Bank of England is giving tech companies the same rights to process payments as the retail banks - enabling us to cut out the middlemen and offer people a faster, cheaper service. I truly believe that money should move around the world as quickly and as cheaply as email, and this is a vital step on that journey,” he said.
“The Bank of England is world leading and other central banks should be looking to follow the UK’s example. Making it much easier for non-bank payment service providers to get direct access to settlement services enables more innovation, more competition, and should in the long term reduce systemic risk. Consumers stand to benefit significantly if this trend is magnified on a global scale,” he added.
The shift by the BoE was designed to ensure that the UK’s payments infrastructure keeps pace with rapidly evolving changes to the international financial system.
Aside from lowering costs for Transferwise, the direct connection to RTGS and the Faster Payments Scheme enables also means the company can offer instant transfers to GBP from its borderless accounts and for customers paying by debit and credit card around the world.
Mark Carney, Governor of the Bank of England said in statement that the UK payments industry and authorities are working together to deliver on their “strategic priority of best-in-class payment services that are efficient, reliable and flexible.”
“I am pleased that the first non-bank payment service provider now has direct access to the UK’s payment systems. By stimulating competition and innovation, we anticipate increased diversity and risk-reducing payment technologies will reinforce financial stability while enhancing customer service,” he said.