.svg)
Pay.UK has released its strategy report, indicating where it wants the UK’s retail payments industry to be by 2026.
The UK’s retail payments authority has published its five-year strategy document: "Our foundation for the future 2021-2026".
The document details the authority’s purpose, vision and strategic goals to enable the UK to remain competitive in the retail payments environment globally.
Pay.UK was established in 2017 by the Payment Systems Regulator (PSR) for the purpose of delivering the New Payment Architecture (NPA) and bringing together the key UK payment schemes, such as Bacs and Faster Payments, into a single holding company.
It is currently responsible for operating the UK’s national retail payments systems.
“Our new strategy provides us with the framework we need to deliver what our end users (e.g. individuals and businesses), current and future customers (e.g. payment service providers such as banks and building societies), and our regulators want: a fast, efficient and well-managed payments platform today, and a next-generation payments platform for the future – the New Payment Architecture (NPA),” the institution said in a statement.
The NPA is a long-running initiative to replace the UK’s interbank payment systems, Bacs and Faster Payments, with a single central payment and settlement infrastructure.
Advocates believe the appropriate delivery of the new architecture is critical as it has the potential to improve competition in payment services, eventually leading to better and cheaper services for people and businesses.
In the strategy document, Pay.UK has set out seven goals to help in the delivery of the NPA.
This includes ensuring the robustness and resilience of the Pay.UK platform and setting rules, standards, controls and policies for the benefit of all those who interact with the institution and its services. “We won't do anything that might compromise the robustness or resilience of our platform, or conflict with our role as a systemic risk manager,” the document says.
As well as this, the authority has committed to transforming the organisation and its culture “to support open and transparent dialogue”.
This is likely to be a well-received goal in the industry as a source had previously told VIXIO in September that “the general consensus is that Pay.UK has failed to deliver on its promise and potential”.
This failure to deliver has also had a knock-on effect on the PSR's reputation, with some feeling that they left it too late to intervene with the NPA’s development.
In July, the regulator called for a narrowing of the scope of the NPA’s central infrastructure services (CIS) contract.
Next-generation
One of the goals in the strategy document is to ensure the platform delivers the greatest possible value and efficiency for current and new customers. “We won’t compete with our customers, or restrict or direct their business models.”
This may put some in the market who have long felt that the NPA development is holding back innovation opportunities at ease. “As the NPA is presumed to be just around the corner, people opt not to risk investing money into this area,” a payments consultant has previously complained.
The Pay.UK document establishes six targets for its "vision: to be delivered. These include lower barriers to entry, whereby the authority has said that it is working closely with the Bank of England. “We will ensure that the next generation payments platform will deliver more connectivity options for our customers and an automated, on-demand testing environment.”
In addition, Pay.UK has said that it will provide simplified access to data to enable customers to create new propositions for end-users.
Another of its targets is to encourage greater use of instant payments in situations where cards are typically used, similar to that suggested by the European Commission’s Retail Payments Strategy. Pay.UK believes that “reducing the proportion of transactions made by card will benefit the UK economy by removing associated costs.”
For this, it has committed to enabling real-time point-of-sale payments to deliver a greater choice of payment method for end-users.
The adoption of the ISO 20022 messaging standard is another key component of the strategy. “Moving to a globally-recognised messaging standard for payments will bring major benefits, enabling us to develop new services for the benefit of end-users, and providing valuable additional data functionality to our customers.”
Elsewhere, there have been recent changes to ISO 20022 migration announced by the Bank of England. The second phase transition for direct participants of the high value CHAPS system has been put back and will now take place as a single event in April 2023, rather than two separate stages in June 2022 (migration from MT to MX (ISO) network) and February 2023 (enablement of enhanced data).
In addition, enhanced data will be immediately supported from April 2023, removing the need for an initial like-for-like implementation stage.
