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UK Government unveils National Payments Vision

Friday 15 November 2024 12:28 CET | News

The UK Government has released its National Payments Vision, outlining objectives for the nation's payments sector.

 

According to the newly released document, in 2023 alone, 48.1 billion payment transactions took place in the UK, spanning retail and wholesale payments. These systems connect individuals, businesses, and financial institutions, enabling the stable economic environment necessary for sustainable growth.

The National Payments Vision builds on the findings of the independent Future of Payments Review 2023, led by Joe Garner. It identifies challenges and opportunities in the payments sector and aims to create a framework for growth and innovation. 

The UK’s payments infrastructure has evolved rapidly, driven by regulatory changes, technological innovation, and shifting consumer preferences. While cash remains essential, digital payments are on the rise. Contactless transactions, for example, rose from 3% of all payments in 2015 to 38% in 2023, fuelled by digital wallets and the growing adoption of Open Banking. Currently, 11 million users in the UK access Open Banking services for account-to-account payments.

 

The UK Government has released its National Payments Vision, outlining objectives for the nation's payments sector.

 

Payments Vision Delivery Committee 

The government has established the Payments Vision Delivery Committee, which will serve as a mechanism for aligning regulatory efforts. The Committee will also facilitate prioritisation of initiatives to ensure timely progress. Complementing its work, a Vision Engagement Group will be formed to provide industry input and support. 

The Committee’s efforts will align with the ongoing design phase of the digital pound, which is overseen by the joint HM Treasury and Bank of England Digital Pound Task Force. Cross-membership between the Task Force and the Committee will help ensure consistency in governance.

Objectives and deliverables

The Committee has been tasked with several objectives over an initial 12-month period, including: 
  • Ensuring regulatory activities align with the National Payments Vision. 
  • Coordinating the sequencing of regulatory initiatives to minimise overlap and maintain progress. 
  • Refreshing the requirements for the UK’s retail payment infrastructure, including governance and funding models, under the leadership of the BoE and PSR. 

Deliverables will include: 

  • By mid-2025: A framework for developing the UK’s retail payment infrastructure, including proposed reforms to Pay.UK. 
  • By late 2025: A sequenced plan for future initiatives, referred to as the Payments Forward Plan, alongside recommendations for monitoring progress. 

The Committee will hold its inaugural meeting in January 2025. HM Treasury will then evaluate its role and determine whether its mandate should be extended.

Industry reactions 

Reflecting on the National Payments Vision, officials from TrueLayer noted that the emphasis on Open Banking and account-to-account payments is important for modernising the UK’s payment systems. They highlighted that moving beyond traditional card networks could reduce costs for businesses while improving security and convenience for consumers, and they expressed optimism about the sector’s capacity to deliver on these objectives. 

Representatives from Token.io also commented on the UK government's National Payments Vision and highlighted the importance of A2A payment infrastructure in promoting competition and providing consumers and businesses with a broader range of payment options. They also expressed support for the government’s vision of further developing A2A payments to increase consumer choice in digital transactions, both online and in-store.


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Keywords: payments , Open Banking, online payments, digital payments, regulation
Categories: Payments & Commerce
Companies: UK Government
Countries: United Kingdom
This article is part of category

Payments & Commerce

UK Government

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