Our Head of Strategic Policy, John Mowat, recently discussed the future of UK payments and upgrades to the UK’s interbank retail payments infrastructure at the Westminster Business Forum online policy conference.
Attended by officials from government departments, policymakers, and representatives from the payments ecosystem, the conference explored policy, regulation and market development surrounding key themes, including payments infrastructure, consumer protection, innovation and open banking.
Context
In conversation with Open Banking’s Nick Davey, John introduced Pay.UK, explaining our role as operator of the central payments infrastructure (i.e. the Bacs and Faster Payment Systems) behind bank transfers, which are crucial for businesses and consumers in the UK. Last year, we processed around 12 billion transactions worth around £10 million, almost all of which went through our Bacs and Faster Payment Systems.
John then explained the need to upgrade our current payments infrastructure in the UK. Following the launch of the Faster Payment System in 2008, and the implementation of Open Banking in 2018, the UK was strongly regarded as a global leader in the wide-scale delivery of real-time payment systems. Fast forward to 2025 and we are no longer considered world-leading, with the publication of the Government’s Future of Payments Review (2023) and subsequent National Payments Vision (2024), which outlines the Government’s plan to establish world-leading payments in the UK, confirming that the time is now for an upgrade to our central payments infrastructure.
Upgrades to the UK’s central payments infrastructure
As an independent organisation at the centre of a progressively-diverse and multifaceted payments ecosystem, we have a unique role to upgrade the UK’s central infrastructure, which will support more seamless, more efficient, and more secure end-user payment experiences.
To reflect this, John talked about Pay.UK’s modular and adaptive strategic approach to enhance and develop the current payments infrastructure. This would:
- Ensure lower risk for our customers and payment service providers during the transition phase (since new system changes would be smaller and more contained than those experienced through the release of a whole new system)
- Enable payment service providers who use our systems to implement the upgrade at different speeds (so roll out is fluid)
- Allow for a more flexible payments architecture so that the infrastructure can adapt to technological changes and/or shifting requirements.
Priority enhancements
John went on to explain that in support of our strategic approach, our regulators have asked us to deliver five priority enhancements to the current payments infrastructure. These enhancements will enable interoperability with messaging standards, support important open banking developments, and enhance resilience, such as through the introduction of ISO 20022 messaging standards and Certainty of Fate. We are currently collaborating with key stakeholders from the payments ecosystem, including Open Banking, to develop an approach to this, and expect further upgrades, beyond the five priority enhancements to the infrastructure, as the modular strategy rolls out.
John said: “Through close and continued collaboration over many years, Pay.UK has a strong and positive relationship with Open Banking. I was delighted to have the opportunity to partner with Nick to discuss the exciting developments ahead and explore how we can continue shaping the future of payments together. We look forward to receiving further direction from our regulators, to understand and support the best outcomes for both end users and the payments industry.”
