On 31 March 2025, we proposed a package of reform measures to our regulators on governance and funding arrangements in retail payments to unlock progress, innovation and growth for the benefit of end users.
Our proposal assumes existing roles and responsibilities are retained. However, we are also considering the potential reallocation of current roles and responsibilities.
Our proposal directly relates to the Government’s work to ‘reform Pay.UK’, as stated in the National Payments Vision.
Context
In our original National Payments Vision submission, we highlighted issues surrounding governance, funding and rules that restrict us in our role as an independent interbank retail payment system operator. Our focus is to now address these issues through a governance and funding framework that enables us to most effectively deliver for the benefit of the industry, end users, and the wider UK economy.
Our proposed reform measures build on the progress we have made since our creation (including our work as a systemic risk manager, our work on fraud detection and prevention and our continued operational resilience and reliability). We also reflected on the learnings from challenges faced in delivering change to the Faster Payment System, Bacs and Image Clearing System, and the feedback we have received about our governance and decision-making, when drafting our proposal.
The right balance of payment system operator authority and accountability
We have called for the Government to set a shared strategic direction for UK payments and introduce a set of arrangements that establish a clear understanding across the industry of roles and responsibilities, including of the payment system operator with significantly enhanced governance and accountability. This will empower us to upgrade our systems through our Next Generation programme.
To support the Payments Forward Plan (the Government’s plan of future initiatives for the payments landscape that the Payments Vision Delivery Committee will deliver by the end of 2025), we want to significantly enhance the transparency of our governance and decision-making with improved two-way engagement, consultation, and accountability. This will support moving away from needing customer consensus or a regulatory mandate to implement material change.
To achieve this, we have asked the authorities to:
- Set a shared strategic direction for UK payments, with Pay.UK responsible for the interbank retail payments roadmap that supports the Payments Forward Plan Provide legislative or regulatory support to clarify our role, including a clear statement from the Payment Vision Delivery Committee in Q2 on our role and decision-making authority in advance of any legislative change.
- Support our strategic decision-making framework – we have been developing this to significantly enhance the transparency of our decisions, with two-way engagement, consultation and accountability, to enable swifter progress on material change initiatives – it would complement the industry delivery body we are setting up to provide greater transparency and accountability once an initiative moves from strategic assessment and into delivery.
- Provide statutory backing for enforcement powers for rule breaches, such as sanctions/fines, and statutory immunity protections for our rulemaking. This would give us the same protection as other Financial Market Infrastructures in the UK, strengthening our effectiveness and reducing our legal risk.
We also propose to:
- Maintain transparent and predictable pricing for our customers that will enable us to deliver a roadmap of upgrades and enhancements, while also allowing us to build up capital to invest in keeping our services resilient and relevant.
These proposals would significantly enhance our accountability and the transparency of our decisions and enable us to do more under our own authority to support the shared strategic direction set in the Payments Forward Plan.
