The UK Government has released its National Payments Vision (NPV), marking a major step forward in its commitment to build a world-class payments ecosystem.
The NPV outlines a forward-thinking approach to modernising the sector, leveraging next-generation technology to foster economic growth and innovation, according to Finextra.
The NPV comes in response to the 2023 Future of Payments Review, addressing the need for a trusted, flexible, and growth-oriented payments landscape.
It aims to tackle existing challenges in the sector, including regulatory inefficiencies and technological bottlenecks, while ensuring that businesses and consumers have access to diverse payment methods.
At its core, the NPV aims to establish a payments ecosystem built on cutting-edge technology.
This is part of a broader strategy to provide a clearer, more predictable, and proportionate regulatory framework.
To achieve this, the government has coordinated with key watchdogs, sending a joint remit letter to the FCA and the Payment Systems Regulator (PSR) to align their objectives with the Vision’s goals.
The government also plans to modernise the UK’s retail payments infrastructure through the New Payments Architecture programme.
This initiative will replace Faster Payments and Bacs with a centralised, purpose-built system for clearing and settlement.
However, the NPV acknowledges that progress in this area has been “slow and challenging,” prompting the establishment of a Payments Vision Delivery Committee to oversee the necessary upgrades.
As part of the Vision, the FCA will assume a regulatory role for open banking, addressing gaps in current governance and driving progress toward a sustainable commercial model.
The PSR will conduct an independent review of authorised push payment (APP) fraud reimbursement rules to ensure consumer protection and fraud mitigation remain at the forefront.
Looking ahead, the NPV also commits to exploring the potential of a digital pound, with any rollout contingent on primary legislation. This demonstrates the government’s ambition to remain at the cutting edge of financial innovation while ensuring robust legislative oversight.
Tony Craddock, director general of The Payments Association, welcomed the Vision, stating: “First, I believe this is exactly what we need to support growth in the UK. Directionally clear without being too prescriptive. Honest about our strengths and failings while respectful of the need for change. Creative without being too clever. Designed to reflect an industry that has stalled in places but is primed for growth. Directed towards a motivating purpose: ‘to achieve a trusted, world-leading payments ecosystem delivered on next generation technology, where consumers and businesses have a choice of payment methods to meet their needs.’”
Mark Brant, chief payments officer at NatWest, also endorsed the government’s plan, commenting: “The steps that the government has outlined will help unlock growth in the UK economy, ensuring the UK’s global lead is not eroded by a complex regulatory change agenda which inhibits firms from providing innovative services that meet their duty to deliver good outcomes for customers.
“It’s time we fully realise the growth potential of digital and accelerating the implementation of open banking through enhanced commercial models. In addition to a focus on the core infrastructure to bolster innovation, we support a clear, predictable and resilient regulatory framework to build on the foundations, with a focus on the three pillars – Innovation, Security and Competition in the interests of the UK and the industry.”
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