Pay.UK is introducing changes to the way Net Sender Caps are managed within the Faster Payment System, designed to increase flexibility, improve liquidity efficiency and support the continued resilience of the UK payments ecosystem.
What are Net Sender Caps?
Within the Faster Payment System, Directly Connected Settling Participants are required to hold pre-funded liquidity at the Bank of England. Net Sender Caps limit participants’ indebtedness to other participants per settlement cycle.
Under the current model, Net Sender Caps are set using a prescriptive approach, including a Minimum Net Sender Cap and a Peak Contingency Value. While this has supported strong risk management, analysis shows participants often hold more funds than needed, with high usage occurring only infrequently.
Moving to a more flexible model
In response, we are introducing a more flexible approach. Participants will be able to set their own Net Sender Caps based on their business needs and expected payment flows, supported by Pay.UK oversight.
Under the revised model:
- Participants set their own Net Sender Cap values
- Quarterly plans are submitted for review
- Existing monitoring and alerting controls remain
- Additional safeguards ensure risks continue to be managed.
Adopting the new model is also optional. Participants can continue using the existing framework if preferred, allowing them to transition at a pace that suits their capabilities.
Enhancing access and supporting innovation
Reducing the level of pre-funding required provides greater flexibility and supports a wider range of business models.
This is particularly significant for non-bank and non-traditional participants. For these participants, funds held for Net Sender Caps often represent additional liquidity that is not otherwise required. Lowering these requirements reduces the cost of participation and can improve access, helping to remove barriers for newer entrants.
Delivering value across the ecosystem
By freeing up unnecessary liquidity, the new model enables participants to optimise balance sheet management and improve financial efficiency.
Importantly, these improvements can be delivered without requiring technical or system changes, reducing complexity while lowering barriers to entry.
Maintaining resilience
Resilience remains central to the change. The revised model includes strong oversight, enhanced monitoring and robust controls to ensure continued system stability. Real-time alerts and existing settlement protections remain in place, helping to prevent disruption and maintain confidence in payment flows.
Supporting a dynamic payments ecosystem
The move to a more flexible Net Sender Cap model reflects the evolving needs of the payments landscape, enabling participants to better align liquidity with demand while supporting a more efficient, resilient ecosystem.
Fiona Bradshaw, Director of Payments, said: “This change represents an important step in evolving the Faster Payment System to better reflect how participants operate today, supporting greater flexibility and efficiency, while maintaining the high standards of resilience and consumer protection that underpin trust in the system.”
