Pay.UK response to National Payments Vision
Resilient infrastructure and a clear regulatory framework are the two core foundations of the Government’s National Payments Vision, published on 14 November 2024.
The Vision’s three key pillars: innovation, competition, and security, mirror our own purpose to power payments, champion innovation and give the UK choice in how it pays. Pay.UK processes over £10 trillion annually, providing robust payment systems that impact people and businesses across the UK, every day.
We occupy a unique position as an independent organisation. This enables us to deliver change for the benefit of end users in an increasingly broad and complex payments ecosystem, where banks, building societies and other payment providers have different perspectives and commercial interests. The National Payments Vision signals support for a strong and effective payment systems operator, in line with our calls for reform. This is vital to ensure we can perform our role more effectively, supporting innovation and competition in the ecosystem and delivering change, alongside ensuring the resilience of our day-to-day operations.
The National Payments Vision is firmly aligned to our strategic asks that: (1) the Vision is rooted in end-user outcomes; (2) it provides strategic direction through clear roles and responsibilities; and (3) it sets out the priorities for interbank payments.
We have a significant role to play in maintaining financial stability and driving growth, and the Government’s ambition for the future of payments.
(1) Delivering benefits to end users – central infrastructure renewal and our technology strategy
There is clear consensus, across the payments industry and reflected in the National Payments Vision, of the need for central infrastructure renewal. The Government’s support for a more agile and flexible approach calls for a different path to large-scale change. We have led work with our customers to develop an alternative technology strategy to the New Payments Architecture (NPA) for delivering infrastructure renewal.
We envisage a modular and phased delivery of a central infrastructure platform that will support easier integration of new products and services as required, including the potential for cross-border, central bank digital currency, and a significant proportion of the capability of a regulated liability network. Crucially, our technology strategy will deliver a future-proof payments platform. This will sustain the products currently delivered on our existing Faster Payment, Bacs Payment and Image Clearing systems. It will also evolve to enable the consumption of new channels and products (including Open Banking-initiated payments). The stated objectives of the National Payments Vision – equitable access for a wide array of actors; innovation both in delivery and in support of greater competition and choice; and security and resilience, were all foundational aspects of our strategy.
In recognition of these factors, we have cancelled the NPA procurement. We can now adopt a more flexible approach to future proofing our systems. It will support a simpler transition for the ecosystem and enable us to co-create a more transparent and controlled delivery approach, including on sourcing, delivery, and funding.
(2) A shared strategic direction
Just as having an end-user focus is vital, it is imperative that the industry works together to achieve a defined set of strategic goals. This will ensure that interbank payments drive innovation and competition on a platform with financial stability as its cornerstone.
Our focus is on continuing to collaborate with our customers and the wider ecosystem on the design and delivery of next generation infrastructure, including establishing an industry delivery body. This work will support the Payments Vision Delivery Committee and the associated Vision Engagement Group to deliver a clear path forward. We look forward to working closely with the Committee to drive infrastructure renewal, and defining longer-term requirements, accountability, and funding to support a strong and effective payment systems operator.
(3) Priorities for interbank payments
The National Payments Vision recognises the critical bearing that payments have on the economy and in supporting innovation. This is a key part of our role, alongside providing resilient and relevant systems and services, and fair and equitable access to them.
We identified three priorities for the next phase of innovation and development in interbank payments:
- Unlocking infrastructure renewal
- Fraud – a key detriment that has the potential to impact overall confidence in the UK’s payment systems
- Interbank transactions in retail – although card payments work well, providing choice in the way people and businesses can pay and be paid is essential. We want the industry and the authorities to prioritise the conditions for interbank transactions to thrive in retail, with an appropriate commercial model and consumer protections.
We will work with the industry and the Payments Vision Delivery Committee to define which elements we need to enable, through our central infrastructure, our access requirements, our rules and standards, or new services.
In conclusion
Our role is to provide resilient and relevant payment systems, that can adapt to the needs of the ecosystem and end users, driving innovation and competition. We have made significant progress since our creation in 2018. We have grown our volumes and our offering – welcoming 28 new customers to the Bacs Payment and Faster Payment systems, expanded our Confirmation of Payee service to over 300 new organisations, and delivered a whole-of-market solution to facilitate APP fraud reimbursement. We have enhanced our resilience – we bolstered our risk maturity in 2024 and delivered over 99.99% uptime in 2023. We now provide easier and greater access to a broader customer base, supporting competition and innovation in retail banking. We have significantly built our capability and improved the way we engage with our stakeholders. We are committed to further increasing our transparency and accountability.
Our focus is now on working with the industry, our regulators, and the Government to deliver significant enhancements to the central infrastructure to enable the outcomes of the National Payments Vision.
