• Indirect Payment System Access for Payment Service Providers

    As a provider of an extensive range of banking services to our own customers we are well versed in the needs of other Financial Institutions and in particular recognise the critical importance of payment services to those institutions in fulfilling their strategic aspirations and to deliver their own unique proposition to customers.

    Our position as a leading participant in the UK payments systems enables us to bring together our extensive industry wide knowledge and technical capability to provide access to the Faster Payments, Bacs, CHAPS and Cheque Clearing systems that is focussed on meeting the individual needs of a range of Payments Service Providers (PSPs) for the transfer of funds within the UK.

    Indirect Access enables a PSP to provide their customers with the full range of UK domestic payment methods without having the obligations, costs and meeting inherently stringent operational and technical requirements of being a direct Member of the Payment Systems. In addition Indirect Access can provide a more flexible choice of access options that can provide access to more than one payments system through a common interface.

    We provide a range of Indirect Access services for Payment Service Providers appropriate to the two different ways they operate their customer accounts and the management of payment to and from those accounts namely as an Agency Bank or as a Non-Agency PSP.


    Agency Banks

    Payment Service Providers that are provided with their own sort codes who are able to allocate their own individual customers with a unique account number within that sort code.

    The sort code is used to uniquely identify the PSP within each of the Payment Systems in its own right in the same way as a clearing bank. This enables each customer’s account to be uniquely identified in payment instructions which is essential for payment methods such as Direct Debit and for ease of regulatory compliance checking.

    To be eligible as an Agency Bank the PSP must meet the criteria set by each UK payment scheme which require at a minimum; that the PSP to be authorised for payments services activities by the UK Financial Conduct Authority or to have a passport for such authorisation from the equivalent regulatory authority of another member state of the EEA.

    In addition, other risk based eligibility will be assessed by us appropriate to the payment systems and other services required. These will include but not be limited to Credit Assessment, Anti-Money Laundering compliance (both of the PSP itself and of acceptability of its Anti-Money Laundering processes, policies and compliance by its clients that are initiating the payments), compliance to payments scheme and other operational and technical requirements that will be discussed during our assessment of your application. Settlement of the value of payments processed through the Payment Systems requires the use of an account with us and will be subject to normal client due diligence assessment prior to confirmation of eligibility.

    Non-Agency PSPs

    Payment Service Providers that are provided with an account within our books and identify their individual customers through a unique reference or roll number within their payment instructions. All payments are made to and from the account held with us and then reflected in the PSP’s own books through reconciliation using the unique reference.

    To arrange to transfer funds on behalf of a customer, a Non Agency PSP will need to be authorised for payments services activities by FCA or to have a passport for such authorisation from the equivalent regulatory authority of another member state of the EEA. The provision of an account to support the requirement Non-Agency PSP will be subject to our standard eligibility criteria and customer due diligence checks including, but not limited to, Credit Assessment, Anti-Money Laundering compliance (including but not limited to of the PSP, of the PSP’s processes/Anti-Money Laundering policies and compliance of the initiating/remitting PSP’s client). In addition other eligibility criteria may apply depending on the nature of each of the payments service and other facilities required.

    Services provided

    We provide indirect access services to the following UK Payment Systems and associated services.

    Sort Codes

    As a Member of the Payment schemes, Lloyds Banking Group manages the administration of Agency sort codes on behalf of eligible Payment Service Providers where we have responsibility for their indirect access. We can arrange for the setup of new Agency sort codes for Payments Services Providers that meet the eligibility criteria of the scheme and where we agree to provide indirect access for that scheme.

    Where we agree to provide indirect access services to an existing Payment Service Provider that already has their own Agency sort code(s), we can arrange to transfer the sort code to our sponsorship where indirect access provision for that Payment system allows for the transfer (i.e. excludes Cheque & Credit Clearing). However, our ability to transfer sort codes in respect of indirect access service we provide for Bacs and CHAPS may be restricted depending on your requirements and we may offer other options to enable the transfer of your payments that would not include the transfer of existing sort code(s).


    The Bacs payment system provides a bulk payment capability for the transfer of payment to and from the PSP’s customer’s account on a 3 day processing cycle (with simultaneous debit and credit on day 3) through either an agency sort code or an account with us. The Bacs service is used by PSPs for sending funds through the Direct Credit service and optionally for the collection of funds from an Agency Bank PSP’s customer’s account through Direct Debit. Credit Institutions can offer their corporate customers the ability to utilise the Bacs service in their own right through our corporate customer sponsorship.

    As a Bacs sponsor bank we can also provide sponsorship for access to the Current Account Switching Service and the Cash ISA Transfer Service for eligible organisations.


    The CHAPS payment system provides a same day real time gross settlement payment service intended for high value guaranteed funds transfers. CHAPS is used by PSPs for commercial payments or for inter bank settlements and can be utilised through an Agency sort code for customer accounts or through an account with Lloyds,

    Cheque & Credit Clearing

    The cheque and credit clearing system provides for the exchange of cheque and Bank giro credits on a 3 day processing cycle. Cheques collected by the PSP on behalf of their customers are submitted through Lloyds to the issuing bank for payment and crediting the PSP account with us or for customer accounts under an agency sort code. Cash and Cheques deposited at other banks for the benefit of a PSP’s customer are received through the credit clearing. Cheques presented for accounts held under an Agency sort code are passed to the Payment Service Provider for a pay decision in accordance with the C&CCC rules. Where a customer with a cheque book issued by a Credit Institution PSPs pays a beneficiary by cheque, Lloyds will receive the cheques presented at other banks through the clearing and presents it to the issuing Credit Institution for confirmation of payment.

    Faster Payments

    The Faster Payments system provides PSPs with the capability to provide their customers with the ability make and receive immediate payment to or from another UK bank through the use of an Agency Sort Code or an account with us. Faster Payments provides a guaranteed funds transfer service and operates on a near real-time basis.

    Availability of Services


    Access methods

    We can provide a choice of access methods both indirect access, through our own products and infrastructure, or via a direct technical connection to the payment system as described below. The Connectivity choices available are dependent on the payment system being used.


    Other Services

    Our approach to supporting customers is to fully understand their total needs and therefore we recognise that indirect access to the payment stems is only part of the full range of services that a Payment Service Provider may need to offer their customers. We can provide the following services to eligible Payment Service Providers as part of our overall Payment Services Provider proposition. Please contact us for more details of these services.

    Branch network

    Our branch network can be used by Payment Service providers to deposit cash and cheques and withdraw cash from their own accounts. In addition, for Payment Service Providers that are eligible for Cheque and Credit Clearing, we may extend this facility to their customers for a pre-arranged basis for specific customers and locations and subject to compliance with Lloyds Banking Group policies including Anti-money laundering, Credit and other risks.

    Bulk Cash Services

    We can both supply Payment Services Provider with cash and accept deposits in bulk in order to satisfy their own requirements for provision of cash services to their customer.

    UK Cheque Clearing (Euro)

    For eligible UK Payment service Providers that wish to issue Euro cheques we can provide access to the UK Euro cheque clearing.

    Fees & Charges

    We will take a holistic view of each individual customers needs and will provide an overall solution to suit the specific needs of each Payment Service Provider according to their requirements. We will offer the appropriate combination of products and services to meet these needs taking into account the volumes, values and funding requirements. Our fees and charges will therefore reflect the unique combinations of services provided and maybe subject to negotiation dependent on the various services, transaction volumes and options chosen.

    Charges for indirect access to payment systems are based on the following elements:-

    • One off setup fees according the combination of services and channels required
    • Regular fees where applicable to the differ services, channels and options required
    • Transaction fees specific to the payment type and volumes processed
    • Fees for account management, credit arrangements and liquidity requirements

    Next Steps

    If you have a requirement for indirect access to any of these UK Payment Systems we can help. We have teams with expertise in Banks and individual Specialist Financial sectors to assist with solutions for your specific business needs.

    To register your interest in indirect access and to obtain further information please contact:

    Kwaku Osafo


    Financial Institutions
    10 Gresham Street,
    EC2V 7AE

    Telephone: 020 7158 2432

    Email: kwaku.osafo@lloydsbanking.com

  • Document-icon

    Ensure you're up to date with our products and services' latest small print.

    Terms and conditions
  • icon - pie chart sands

    Timely and topical insight to your inbox.

    Sign up
  • contact icon - purple

    For more information, contact your local relationship director or use our online directory.

    Find a contact

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Please note that any data sent via e-mail is not secure and could be read by others.

Lloyds Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 0207 626 1500.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.