The Payment Systems Regulator (PSR) has officially revoked its previous requirements for competitive procurement of the UK’s LINK ATM network infrastructure and Pay.UK clearing services. The revocation of Specific Direction 4 (SD4) and Specific Direction 4a (SD4a) takes effect from 25 August 2025, while the revocation of Specific Direction 2 (SD2) and Specific Direction 2a (SD2a) becomes effective on 27 August 2025. This decision follows LINK’s recent full-scale public procurement—the awarding of its central infrastructure contract to Vocalink in October 2021—and reflects an updated assessment of market risks and administrative overhead.
Background and Context
- SD4, introduced by the PSR in June 2017, required LINK’s central infrastructure services (critical to UK ATM operations) to be competitively tendered, with future contracts from October 2031 also to be awarded via open competition.
- LINK requested the revocation in June 2024, after successfully completing a transparent procurement process and entering into a new agreement with Vocalink.
- The public consultation regarding the proposed changes was conducted under CP25/2.
The PSR states that maintaining mandatory competitive procurement is no longer considered the most effective way to address the risk of insufficient competition in the LINK network’s infrastructure. The regulator highlights that requiring further tenders would significantly increase costs without guaranteeing viable alternative bidders. As a result, the decision is designed to simplify the regulatory landscape and offer greater flexibility for future updates to the UK’s ATM and payment systems.
| Key Changes | Effective Date | Implication |
|---|---|---|
| Revocation of SD4 / SD4a (LINK) | 25 August 2025 | Ends competitive tender requirement for LINK infrastructure |
| Revocation of SD2 / SD2a (Pay.UK) | 27 August 2025 | Simplifies rules for clearing operator procurement |
Ongoing Oversight
The PSR emphasises that despite the regulatory change, it will continue close collaboration with bodies including the Bank of England, the Financial Conduct Authority (FCA), and the Competition and Markets Authority (CMA) to monitor UK retail payment infrastructure. The regulator reserves the right to intervene should market conditions, technology, or risk environments change significantly.
This move is expected to reduce administrative costs for LINK and Pay.UK, while ensuring operational flexibility as the payments landscape evolves. More details and policy background are available from the Payment Systems Regulator.
