UK Modernizes Payments System with Bank of England Leading Charge

Government Pushes for Payment System Overhaul

The UK is modernizing its retail payments system with the Bank of England taking a central role. This follows the government’s November 2024 pledge to reduce regulatory barriers. The goal is to create a world-class payments ecosystem using advanced technology.

New Payments Architecture Takes Shape

The transformation centers on the New Payments Architecture (NPA) program. It will replace Faster Payments and Bacs systems with a unified clearing infrastructure. Due to slow progress, authorities formed a high-level Payments Vision Delivery Committee. HM Treasury chairs this group, which includes the Bank of England, FCA, and Payment Systems Regulator.

Bank of England to Lead Infrastructure Development

The proposed model creates a Retail Payments Infrastructure Board. The Bank of England will chair this board, working with Pay.UK and a new Industry-Led Delivery Company. The Bank’s experience with RTGS service makes it ideal for this leadership role.

New Delivery Company to Drive Modernization

The Delivery Company will fund and procure the upgraded infrastructure. It will bring sector expertise to each development stage. Meanwhile, Pay.UK continues operating existing systems like Faster Payments and Direct Debit.

Public-Private Collaboration for Future Systems

The strategy emphasizes collaboration between public and private sectors. It aims to create a modern system serving consumers, businesses and financial institutions. The Bank promises clear coordination between the Delivery Company and Pay.UK to ensure smooth transitions.

Timeline and Industry Support

Authorities expect a Payments Forward Plan by end of 2025. This will detail initiatives for retail and wholesale payments, including digital asset integration. Mastercard supports the move, calling it crucial for UK leadership in account-to-account payments. The plan aligns with recommendations from the recent Garner Review.

This modernization effort positions the UK as a potential global leader in digital payments infrastructure.

Bank of EnglandFaster Paymentsfinancial infrastructure UKMastercardNational Payments VisionNew Payments ArchitecturePay.UKretail paymentsRTGSUK Payments