The Government Digital Service (GDS) has taken a step towards introducing an open banking payment function to GOV.UK Pay.
It has published a market notice for a new payment service provider for the platform, indicating that it is aiming to add the capability to accept payments through application programme interfaces (APIs) from banks’ systems.
The notice states that GDS is preparing to spend up to £49.2 million on the effort under a three-year contract to begin in July of this year, with options for two one-year extensions.
This follows an indication by the organisation in 2023 that it was looking to provide an open banking function on GOV.UK Pay, and reflects a growing interest in the approach across the public sector. In December of last year the Crown Commercial Service launched a procurement framework for open banking services.
Open banking allows for the sharing of financial data between banks and third party service providers through APIs. In the UK it uses standards and systems created by the not-for-profit Open Banking Ltd and is subject to enforcement powers held by the Competition and Markets Authority.
User payments requirement
The market notice says the new payment service provider for Pay is expected to provide for open banking payments, either solely or with a partner, and enable users to complete their payments within the Pay platform’s interface, with the exception of authorising payments through their banking apps.
This would include the ability to connect to all CMA9 banks (the nine largest in the UK), API based initiation of a payment, repayments and refunds for open banking payments, the ability for users to cancel transactions, and to comply with the latest mandatory open banking standards.
In addition, it would have to support Pay with the resolution of disputed card payments.
Other requirements for the API function include the ability to create and manage relying service accounts, providing automated ‘know your customer’ (KYC) and anti-money laundering (AML) checks, and sending automated event notifications to Pay relating to the onboarding of relying services.
Schedule for provision
GDS is expecting the new supplier to begin providing the service by the end of a 12-month onboarding period.
The existing payment service providers for GOV.UK Pay are Worldpay for central government services and Stripe for local authorities, police and government owned charitable groups.
The platform has been used by more than 1,000 public sector services to process over 94 million transactions with a total value of £6 billion since its launch in 2016.
