The UK’s National Payments Vision takes a step closer to reality

On 15 July 2025, HM Treasury (HMT) published an update on the work of the “Payments Vision Delivery Committee” (PVDC) to set out the organisational structure for designing and delivering the future retail payments infrastructure for the UK.

Make no mistake, this has significant implications for banks and PSPs offering instant payments services and will define the strategy not only for upgrading the Faster Payments System (FPS), but also on what could follow that. Banks now need to move quickly to develop plans for their own instant payments systems.

How we got here

The PVDC was set up in November 2024 to realise the National Payments Vision (NPV) – which sets out the ambition for a world-leading payments ecosystem – and comprises representatives from the government (HMT), central bank (Bank of England), and key regulators (Financial Conduct Authority [FCA], Payment Systems Regulator [PSR]). Crucially, it is supported by the ‘Vision Engagement Group’ comprising 30 senior payments industry representatives.

The 15 July announcement fulfils the PVDC’s stated intention to “set out within six months an approach for the development and delivery of the UK’s retail infrastructure needs and the required governance and funding model to achieve it, including proposals for the reform of Pay.UK”.

What the PVDC update says

The PVDC update focuses on the public-private approach for running and changing the UK’s central or interbank payments infrastructures. Here’s what we now know:

– There will be a new industry-owned and led Delivery Company, responsible for procuring and funding next-generation retail payments infrastructure.

– Pay.UK’s role will now be focused on operational running of current interbank systems. Pay.UK will seek to maintain the resilience of these systems and ensure they can best serve today’s ecosystem.

– The PVDC will set strategy for retail payments infrastructure.

– There will be a new Retail Payments Infrastructure Board (RPIB), chaired by Bank of England, and with representatives from industry, the Delivery Company, and Pay.UK. This Board will translate the PVDC’s strategy into design, including through consultation with the broader ecosystem and end-users.  The RPIB will oversee the Delivery Company.

What the PVDC update does not say

As you see, the update does not actually address what payment infrastructure the UK should build. For that, we must wait for the PVDC to publish its strategy for retail payments infrastructure “in the autumn”.

For banks offering real-world payment services, the temptation might be to hit the snooze button, doze off for a few months while the organisational structure is established, and await the autumn update.

We think this would be a mistake. The new structure marks a key development that stands to restore the momentum for upgrading the UK’s retail payments infrastructure. We therefore expect the pace of progress to now increase.

What is the strategy likely to cover?

The autumn strategy will be hugely significant – setting the agenda for what the RPIB and Delivery Company will be tasked with designing and implementing.

What will this look like? Following the eventual demise of the former ‘New Payments Architecture’ programme, Pay.UK has spent the last 15 months, under instruction from the PSR, driving an agenda for delivering priority enhancements to FPS. While still under discussion, these enhancements will likely go forward in some form as a first phase of the strategy.

Yet long-term ambitions will extend far beyond FPS enhancements. The strategy will likely also encompass the potential role for retail digital currencies (issued either by the central bank, by commercial banks or by non-banks) and tentatively explore the future of BACS – which remains in high demand for bulk credits (e.g. payroll and batch invoice payments) and all our direct debits.

This means that we anticipate the strategy will include clear positions on how the UK’s instant payment architecture should be developed to:

– Adopt the ISO 20022 data standard to support richer, structured data within the payment message, while increasing interoperability with other payments infrastructures in the UK and other countries.

– Support various use cases for direct account-to-account payments under open banking, particularly for consumer purchases online or in-store as an alternative to card payments, bringing more volume onto the instant payments infrastructure.

– Increase access to the instant payments infrastructure, levelling the playing field between Tier 1 banks and smaller banks / PSPs.

– Reduce costs to banks for processing instant payments.

– Enhance system resilience and security to consistently deliver the required service levels and protect against serious cybercriminal risks.

What do banks need to do now?

In response, banks need to develop their own plans for upgrading their UK infrastructure to better support today’s instant payments services and roadmap, while enabling other payment services to eventually move onto instant payments rails.

This involves:

– Assessing their current end-to-end FPS solution across the bank and defining target business and IT architecture for UK instant payments services over FPS and beyond. They should also assess their internal FPS gateway solution and consider upgrade / transformation options

– Exploring opportunities arising from ISO 20022 data adoption, including payment operations, financial crime risk reduction, and greater systems interoperability

– Engaging directly in the current programme of FPS enhancements and navigating how this evolves into the new design and delivery structure

– Developing a robust testing approach and migration options for changes to banks’ FPS / instant payments systems to ensure high-service levels are maintained throughout a transition.

– Enhancing payments operations and processes as more use cases become viable over instant payment infrastructure, such as open banking payments

– Engaging upstream with payments products colleagues for retail, business, corporate and government customers to ensure product roadmaps harness enhanced instant payments and open banking capabilities for domestic and cross-border / one-leg out payments

– Engaging in the retail payments infrastructure strategy under the new RPIB described above, and via your representatives or contacts on the Vision Engagement Group, or RPIB going forward.

While the to-do list may look extensive, banks don’t necessarily have to start from scratch. Despite its ultimate demise, much of the analysis work conducted in preparation for the former New Payments Architecture programme could still prove useful and feed into this new activity.

Leading instant payments forward

We are at the start of what stands to be an exciting journey for the UK’s instant payments infrastructure. Icon’s extensive work with our clients to develop payments strategy, architecture designs and drive implementations – coupled with our understanding of the past, present and future of instant payments in the UK and beyond – can help banks navigate the transition ahead and realise the full potential.