An arm of the giant Indian conglomerate Tata is in the frame to take over the running of Britain’s Faster Payments Service – even as one of its sister companies prepares to lay off thousands of Welsh-based steelworkers.

Sky News has learnt that Tata Consultancy Services (TCS) is a leading contender to become the administrator of a key piece of the UK’s economic infrastructure, which is responsible for processing more than 90% of salaries, over 70% of household bills and almost all state benefit payments.

The procurement process, which has taken place amid rapid developments in global payments technology, is shrouded in secrecy.

A formal decision has yet to be made by regulators, although several people close to the process said they understood that TCS had edged ahead of the incumbent Vocalink, which is owned by Mastercard.

Although TCS and Tata Steel are connected only by virtue of having a common shareholder in Tata Group, any decision to hand the Faster Payments Service role to TCS may attract additional scrutiny because of the row over impending mass redundancies at the Port Talbot steelworks.

Tata Steel has confirmed plans to axe 3,000 jobs in south Wales as it switches to greener electric arc furnaces, a decision which has angered unions because the transition will be aided by a £500m government grant.

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The appointment of a new operator of the Faster Payments Service is said to be on hold until the government publishes a revised sector strategy called Vision for Payments.

In a statement issued to Sky News, the Payment Systems Regulator said: “A competitive procurement process to deliver investments to the UK’s payments infrastructure was run by the operator, Pay.UK.

“As the regulator of the UK’s payment systems, we work with the Bank of England to review any proposals.

“However, the process is currently paused while we await the government’s recently announced Vision for Payments, which we expect later this year.”

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In a review written for the government last year, Joe Garner, the former Nationwide chief executive, highlighted that gaps in consumer protection had been exposed by the explosion in faster payments activity in Britain.

He also pointed to the current system’s failure to develop a “slick” experience for consumers.

The value of the contract to the next operator of the FPS is unclear.

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A spokesperson for Pay.UK said: “Pay.UK is conducting a comprehensive and competitive procurement process for the [New Payments Architecture].

“We have carefully examined prospective vendors and considered all relevant data, competition and regulatory requirements. We are now going through the necessary regulatory non-objection and assurance process. We will not comment further while the process is ongoing.”

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A Mastercard spokeswoman said: “We have not received any communication from Pay.UK on the matter.

“The bid process is still in the regulatory non-object phase.”

Mastercard has owned Vocalink since 2016, when it bought the company in a deal worth about £700m.

Vocalink has also played critical roles in the BACS system enabling direct debit payments between bank accounts and LINK, the UK cash machine network.

TCS declined to comment.

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