HM Treasury has announced its National Payments Vision, setting out an ambitious plan to position the UK as a global leader in payments. This strategy aims to strengthen the economy by fostering innovation, enhancing security, and offering consumers and businesses a range of trusted payment options, all underpinned by next-generation technology.
In the ministerial foreword, Tulip Siddiq MP, Economic Secretary to the Treasury, emphasises the central role of payments in economic stability and growth. With nearly 50 billion transactions taking place in the UK last year, the infrastructure enabling these payments is vital but largely invisible to the public. From cash and cheques to digital wallets, payments are expected to work seamlessly, and the government is determined to maintain this standard while embracing technological advancements. Siddiq highlights the transformative potential of emerging innovations such as Artificial Intelligence and distributed ledger technologies, which promise to redefine how people and businesses transact. She stresses the importance of collaboration between government, regulators, and industry to seize these opportunities, with the newly established Payments Vision Delivery Committee playing a pivotal role.
The National Payments Vision is the government’s response to the Future of Payments Review 2023 and extensive stakeholder feedback. It sets out a clear plan to create a payments ecosystem that is secure, trusted, and globally competitive. To achieve this, the government is addressing regulatory challenges, ensuring the ecosystem can support innovation while remaining resilient and consumer-focused. A coordinated approach between the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) aims to streamline the regulatory framework, providing clarity and reducing barriers for innovative firms.
The vision includes a renewed focus on infrastructure, recognising the slow progress of the New Payments Architecture programme. Upgrades to the Faster Payments System will be prioritised, with the Payments Vision Delivery Committee, the Bank of England, and the PSR leading efforts to ensure the UK’s infrastructure meets the demands of next-generation technologies. This approach aims to maintain trust in the system while fostering a dynamic environment for growth.
A core component of the strategy is fostering innovation. The government highlights the importance of Open Banking in enabling seamless account-to-account payments, offering greater choice to consumers and businesses. Plans are in place to transition Open Banking regulation to the FCA, ensuring progress towards a sustainable commercial model and robust consumer protections. The vision also commits to exploring the potential of a retail Central Bank Digital Currency, the digital pound. While no decision has been made, the government assures that any future launch would include robust privacy and consumer safeguards.
The strategy underscores the need for competition and security to underpin innovation. Empowering consumers and merchants with more payment options is key to creating a dynamic and competitive market. High standards of consumer protection remain central, with the FCA and PSR working together to tackle fraud, including a post-implementation review of the authorised push payment fraud reimbursement rules. Recognising the role of technology and telecommunications in combating fraud, the government calls for further collaboration across sectors to strengthen safeguards.
Achieving the vision requires a united effort from government, regulators, financial services providers, merchants, and consumer representatives. The Payments Vision Delivery Committee, supported by an engagement group, will drive implementation, ensuring that the UK continues to set the global standard for innovation, trust, and efficiency in payments. This collaborative approach seeks to ensure the payments sector not only supports the government’s mission for economic growth but also reinforces the UK’s leadership on the global stage.
To delve into the full details of this transformative strategy, you can download HM Treasury’s National Payments Vision here.
