The UK is revamping its retail payments infrastructure to enhance effectiveness, with a more significant role for the Bank of England and the establishment of a new industry-led delivery company to collaborate with Pay.UK.
In November 2024, the government released its National Payments Vision (NPV), aiming to navigate through the "regulatory congestion" in the sector and foster a world-class ecosystem utilizing next-generation technology for economic growth.
To replace the current Faster Payments and Bacs retail interbank payment systems, the UK is developing a New Payments Architecture programme that will facilitate clearing and settlement through a single, purpose-built central infrastructure. The NPV acknowledges that modernizing the UK’s retail payments infrastructure has been "slow and challenging."
To propel the NPV, a Payments Vision Delivery Committee has been formed, chaired by the Treasury and including representatives from the Bank of England, Financial Conduct Authority, and Payments Systems Regulator. This committee has proposed a model to deliver a new era of UK retail payments infrastructure, focusing on collaboration between public and private sectors to support businesses and consumers.
A Retail Payments Infrastructure Board, led by the Bank of England, will oversee this initiative, drawing on its experience in operating the Real-Time Gross Settlement service. It will include representatives from the ecosystem, Pay.UK, and the new Delivery Company.
The Delivery Company will be tasked with procuring and funding the new infrastructure, ensuring that the right expertise guides each design and delivery phase, with mechanisms in place for coordination with Pay.UK.
The central bank emphasizes that Pay.UK will maintain its critical role as the operator of existing interbank payment systems and work closely with the Delivery Company.
The committee is set to publish its strategy in the autumn, followed by the Payments Forward Plan by the year’s end. This plan will outline a sequenced approach to initiatives in both retail and wholesale payments, alongside the role of digital assets.
A Mastercard spokesperson expressed support for the initiative, stating: "These measures aim to reaffirm the UK’s leadership in Account to Account payments. We endorse the establishment of the Industry Led Delivery Company and the enhanced role for the Bank of England in modernizing the UK A2A infrastructure."