Building a smarter way to move money
As the market for digital payments evolves, so must the infrastructure that supports it. The New Payments Architecture will be a resilient, scalable platform that expands what’s possible with payments.
The UK is a global leader in retail interbank payments. The payment systems overseen by Pay.UK means people can pay, get paid and manage their money quickly and efficiently. In 2020, these systems processed a record 9.5 billion transactions.
We operate in a fast-moving, ‘always on’ environment, where our customers and end users expect (and need) more. Technology and competition are evolving fast and payment volumes are increasing. It is crucial that the systems we have are robust and resilient at all times, benefitting the UK economy and beyond.
The New Payments Architecture (NPA) programme is creating the retail payment infrastructure that will address these challenges and keep the UK at the forefront of payments. Built on the vision established in 2017 by the Payments Strategy Forum, an initiative of the Payment Systems Regulator, six guiding principles will underpin both its design and delivery:
- Maintaining a robust, resilient and scalable platform – enhanced by new technology and able to handle rising payment volumes
- Adoption of the ISO 20022 messaging standard, which will enable new capability, for example tracking and tracing payments
- Developing a real-time payment capability, creating more choice for those who make and receive payments
- Lowering barriers to entry so more customers can access NPA services more easily and create more choice for end users
- Delivering a safe, secure environment equipped to help combat fraud and financial crime
- Ensuring users benefit from efficiencies, for example using data to support innovative new services
What the NPA will deliver
The foundation for payments innovation
The NPA offers a platform for new payment products and services that have the potential to transform people’s financial lives. Its component parts include:
1. An accessible capability for clearing and settlement
Central to the NPA is a robust and resilient clearing and settlement capability that customers can access through both fixed-line and cloud-based solutions. It will be flexible, allowing for genuinely real-time payments and able to handle increasing payment volumes.
Payments will use the ISO 20022 messaging standard, which means enriched data fields and greater interoperability with other systems that use ISO 20022.
This core will process Faster Payments volumes in the first instance, with Bacs payments subject to further industry consultation.
Because it will be open for the whole market to use, the new core has transformative potential for payments and financial services. It makes possible the creation of new services that deliver better experiences and value for users and the industry.
2. Payment products
The NPA platform will include the rules and standards that make up a suite of payment types, including “instant” payments. These can be used by the market to create new products and services that have enhanced data benefits.
- Priority Payment – a standard PSP-PSP payment that replaces the Single Immediate Payment (SIP) used today
- Instant Payment – new retail/ecommerce product that requires a near real-time response from recipients
- Same Day Payment – new payment type that optimises processing capacity and cost
- Multi-payment – single payment message with multiple individual credits
- Bulk Payment – enables customers to submit large payment files in batch
- Multi-Day Bulk Payment – This variant of a Bulk Payment is subject to industry consultation
3. Overlay services
The NPA makes possible an entirely new opportunity for the market to innovate by offering additional services that enhance payment experiences. Third parties will have the opportunity to develop and market NPA compatible “overlay services” that PSP’s can incorporate into their payment product offerings. The rules, standards and frameworks for these be clearly defined in partnership with Pay.UK so that the infrastructure remains robust and resilient at all times.
Pay.UK has already developed two overlay services to make end user’s payment experiences easier, richer and more secure:
Confirmation of Payee. Launched in 2020, this name-checking service has been implemented by many UK PSPs. It offers end users the ability to check the name on an account before a payment is sent, giving them greater assurance that payments are being sent to the correct recipient. It is also a valuable tool in combating Authorised Push Payment (APP) fraud. Learn more about Confirmation of Payee.
Request to Pay. This messaging service offers a new and more flexible way for bills to be settled between people, organisations and businesses. Billers can request payment for a bill rather than sending an invoice, and customers can choose how they respond. It has recently been estimated that Request to Pay could save the UK economy £2-3 billion per year in reduced billing costs. Learn more at the Request to Pay website.