The UK's National Payments Vision

In November 2024, HM Treasury published its highly anticipated National Payments Vision (NPV) which sets out its aspirations for the UK’s payments sector.

The NPV addresses the findings of the independent Future of Payments Review 2023 (also known as the Garner Review) which recommended a call for the Government to develop a national vision and strategy for payments - and the response is ambitious (albeit high level). As noted in the NPV, last year around 1500 payment transactions were made by businesses and consumers every second in the UK and the Government sees a strong payments sector as crucial to underpinning economic growth.

Foundations of the NPV

The NPV is built on two broad foundations – “Strengthening the foundations of today” and “Building for tomorrow”.

Strengthening the foundations of today:

• Creating a more suitable regulatory framework by reducing regulatory congestion, including streamlined co-operation between key regulators including the Bank of England (BoE), Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR); and

• Ensuring infrastructure resiliency – acknowledging the challenges faced in upgrading retail payments infrastructure and moving away from the previous New Payments Architecture programme to deliver a more agile and flexible approach.

Building for tomorrow:

• Driving innovation through a market-led approach within clear regulatory parameters;

• Facilitating competition to spur innovation and incentivising ongoing investment into the sector; and

• Ensuring security in the context of a global payments ecosystem which requires cross-border activity and international operability.

Key takeaways

• New Payments Vision Delivery Committee (PVDC) – The PVDC will be established (chaired by HM Treasury and including senior BoE, FCA and PSR stakeholders) to oversee delivery of the NPV, with a focus on regulatory alignment and co-ordination between key regulators and prioritisation of initiatives. The PVDC will also set up a Vision Engagement Group to incorporate industry perspectives. The PVDC is initially tasked with establishing a new approach to infrastructure upgrades (to be delivered in the first half of 2025 and superseding the previous New Payments Architecture programme) and providing the Payments Forward Plan (a roadmap of payment system initiatives) by the end of 2025.

• Regulatory co-operation - Is another key focus, including the issuing of a remit letter to the FCA and PSR outlining the Government’s regulatory priorities for UK payments and a commitment from the BoE, PRA, FCA and PSR to revise their existing Memorandum of Understanding for payments regulatory co-operation within the first half of 2025.

• Open Banking - The NPV highlights Open Banking as a key driver in the development of smoother “account to account” (A2A) payments, driving consumer and merchant choice and establishing A2A as a ubiquitous payment method. The regulatory remit letter supports Open Banking as a key priority; which will now come under the regulatory remit of the FCA.

• Digital IDs - The proposed Data (Use and Access) Bill (currently undergoing public consultation) is expected to include statutory measures relating to Digital IDs which the NPV notes could help to harness greater safety and convenience in respect of “person to person” payments.

• UKCBDC - The potential introduction of a Central Bank Digital Currency / Digital Pound has been a key area of Government thinking in the payments space over recent years and the NPV – while making clear that no decision has been made on implementation – does note that the Government will continue its work alongside the BoE in assessing the concept.

• Consumer protection - Is a significant theme of the NPV, with the Government confirming that fraud reduction remains a key focus for the sector. The FCA has been tasked with leading in the identification of regulatory overlap between itself and the PSR and setting new Strong Customer Authentication rules to replace those created under the 2017 Payment Services Regulations.

• Authorised Push Payment (APP) fraud – Remains in the spotlight, with the NPV committing the PSR to an independent review of the recently introduced authorised push payment fraud reimbursement rules after 12 months – interestingly the NPV also highlights telecoms and tech companies as key potential players in the fight against APP fraud.

What will it mean?

The NPV is in its infancy (and is billed as a long term and high level strategy) so its meaningful impact remains to be seen (and as ever the devil will be the detail).  However, the Government’s proposed direction of travel is clear and could provide fertile ground for players across the sector as they look to identify and capitalise on opportunities over the medium to long term.

The newly created PVDC in particular provides a new focus for delivery, and the proposals for a more integrated and streamlined approach to regulatory activity are likely to be welcomed by industry players seeking to navigate what is a complex incumbent framework. Industry participation in the PVDC via the Vision Engagement Group potentially offers industry stakeholders a meaning route to engagement on this front.

Unsurprisingly, driving competitive innovation is a common theme of the NPV, offering encouragement to operators seeking to find and develop new and improved products and services. In addition, the Government’s commitment to Open Banking and A2A payments as growth drivers, as well as its continuing focus on the Digital Pound and Digital IDs will be welcomed by those firms aiming to leverage opportunities in these areas.

How can TLT help?

TLT’s specialist payments team will be closely monitoring developments under the NPV and has vast experience across the entire payments ecosystem so can support payments businesses in a number of ways, including from a regulatory perspective.

Should you wish to discuss the potential impact of the NPV and what it means for your business, please get in touch.

Contributor: Rebekah Lengyel

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2025. Specific advice should be sought for specific cases. For more information see our terms and conditions.