Series 3 — Solution · Paper 9
A PISP
Daniel spent twelve years working in payments. Not on the consumer side — on the infrastructure side. The systems that route transactions, the protocols that confirm settlement, the compliance frameworks that sit underneath everything a merchant or payer never thinks about. He understood how the current system worked in detail, including the parts that were harder to defend the more closely you looked at them.
When Open Banking arrived he watched carefully. The rails were there. The regulatory framework was there. The technical capability to move money directly between bank accounts without a card network in the middle was, for the first time, genuinely available. What wasn’t there was the coordination layer — the scheme that would allow payment providers to interoperate, the governance that would make the scheme trustworthy, the protocol that would make it all work without recreating the proprietary structure it was supposed to replace.
He waited to see if someone would build it. Nobody did.
Three years ago he decided to build one himself.
The first decision was the simplest and the most important: not to build a proprietary network. A payment scheme that Daniel controlled would have the same structural problems as the schemes it was trying to replace — rules set in the interest of the operator, fees extracted because the infrastructure creates the opportunity to extract them, merchants and payers dependent on infrastructure they had no voice in governing.
He built on the open protocol instead. The Scheme Authority sets the rules. Daniel’s PISP — he called it Meridian — operates under those rules alongside any other PISP that meets the membership criteria. Meridian’s merchants can be paid by payers on any other PISP. Meridian competes on the quality of its product, not on the exclusivity of its network.
This felt like giving something up. It also felt like the only version of this worth building.
Meridian’s first merchant was a small chain of independent bookshops — seven locations, a loyal customer base, card fees that had been a source of quiet frustration for years. The owner had been watching Open Banking with the same interest Daniel had, and when a mutual contact made the introduction the conversation moved quickly.
The integration took three weeks. The bookshops added a QR code to their till receipts and a payment link to their online checkout. Staff were shown how to handle the occasional customer who didn’t use the scheme — which in the early weeks was most of them.
The first payment through Meridian was on a Tuesday morning in November. A customer at the Islington branch bought two paperbacks, scanned the code on their receipt, and approved the payment. Daniel was in the office when the notification arrived. He had been waiting for it for three years.
By the end of the first month, thirty-one percent of the bookshops’ transactions were coming through Meridian. By the end of the third month it was fifty-four percent. The card terminal is still there. It is used less often than it used to be.
What Daniel built, at its core, is a licensed payment business that sits between merchants and their banks. Meridian onboards merchants, provides them with the tools to create payment requests, connects to their banks via Open Banking to initiate settlement, and handles everything in between — the compliance, the dispute process, the reconciliation, the monitoring.
None of this is technically novel. The components existed. What Meridian built was the combination — the implementation of the open protocol in a form that a bookshop owner could use without understanding any of the infrastructure underneath it.
The open protocol means that Meridian’s merchants are not locked into Meridian. If a merchant finds a PISP that serves them better, they can switch. Their customers — enrolled with whatever PISP they use — can pay at any merchant on any PISP. The network is not Daniel’s to own. He is a participant in it, competing on the quality of what he offers rather than the captivity of those who depend on him.
This is not how payment businesses have traditionally worked. It is, Daniel thinks, how they should have always worked.
Meridian now has forty-one merchants. Some are small independents like the bookshops. Some are larger businesses that came later, once there was a track record to point to. Each one pays a flat monthly fee and a small per-transaction charge. The fees are lower than what they were paying on cards. The settlements are faster. The dispute process is defined and documented rather than opaque and unpredictable.
Daniel has three people working with him. He expects to have seven by the end of the year.
The thing he thinks about most, when he thinks about where this is going, is not Meridian’s growth. It is the number of PISPs. Each new operator that joins the scheme extends the network that all of them depend on. A payer enrolled with any PISP can pay a merchant on any other. The value of being on the scheme increases with every participant, and every participant’s growth makes the scheme more attractive to the next one.
He built Meridian because he wanted to build something worth building. The open protocol made it possible to do that without building something that would eventually become the thing he had spent twelve years watching from the inside.