Statement
Introduction
The National Payments Vision set out the government’s ambitions for a world-leading payments ecosystem which drives innovation, supports competition and ensures security, in line with the Growth Mission. It established the Payments Vision Delivery Committee (‘the Committee’) to enhance regulatory coordination and drive implementation of key activities – including setting out the approach for the development and delivery of the UK’s retail payments infrastructure needs. The Committee is supported by a Vision Engagement Group comprising over 30 representatives from the sector.
The Committee has agreed an innovative new model to deliver the next generation of UK retail payments infrastructure, supporting businesses and consumers across the economy. The new model embeds public and private sector collaboration, utilising the right expertise in the right functions to drive transformation. The model also supports short-term activity to enhance resilience and functionality of the existing Faster Payments System, which Pay.UK has been progressing with industry participants.
In coming to this decision, the Committee has considered international comparisons, reflected on previous UK approaches, and has drawn on work led by the Bank of England and Payment Systems Regulator (PSR), as well as the views, insights and proposals contributed by the Vision Engagement Group. The Committee is grateful to the Vision Engagement Group and looks forward to continued close collaboration.
This work sits alongside government’s broader actions to set the foundations for an innovative, competitive and secure payments landscape, as set out in the Financial Services Growth and Competitiveness Strategy. The authorities will continue to coordinate closely to deliver these commitments, in line with the recently updated and enhanced Memorandum of Understanding and following the future consolidation of the PSR into the FCA.
A collaborative new model to design and deliver next-generation infrastructure
The new model resets responsibilities across the ecosystem, with clear roles for the public authorities and industry participants to renew the UK’s retail payments infrastructure and harness the opportunities of next-generation technologies at pace. Pay.UK’s critical role as operator of existing systems will continue.
The Payments Vision Delivery Committee will set strategy for retail payments infrastructure.
In the autumn, the Committee will publish its strategy for retail payments infrastructure. This will establish key priorities for next-generation infrastructure, aligning with the National Payments Vision’s pillars of innovation, competition and security and reflecting input from stakeholders across the ecosystem. This will inform the work of the new Retail Payments Infrastructure Board, the Delivery Company and Pay.UK. The Committee will also publish the Payments Forward Plan by the end of the year, which will set out a sequenced plan of initiatives across the payments ecosystem including initiatives in both retail and wholesale payments, and the role of digital assets.
The Committee will maintain a key role while empowering the Retail Payments Infrastructure Board to lead design of next-generation infrastructure in line with the Committee’s strategy.
Over the coming months, the Committee will work with the Vision Engagement Group as it develops its strategy and the Payments Forward Plan, and the model is operationalised – ensuring that stakeholders across the ecosystem, including end-users, can input meaningfully through the new model.
The Bank of England will set up and chair the Retail Payments Infrastructure Board – with broad representation across the ecosystem – to translate strategy into design
The Board will translate the Committee’s strategy into design, including through consultation with the broader ecosystem and end-users. The Bank of England will chair this board, reflecting its role as operator of the Real-Time Gross Settlement service and experience of renewing infrastructure, including convening technical expertise across the sector and resolving gridlocks where needed. The Board will act transparently and report to the Committee.
Industry experts will lead the procurement and delivery of new infrastructure.
Having set the design, the Board will oversee its delivery by a new industry-owned and led Delivery Company, responsible for procuring and funding next-generation infrastructure. The new model ensures the right expertise is driving activity at each stage of design and delivery, with clear mechanisms to ensure coordination, including with Pay.UK. These will help provide the close alignment necessary to support a smooth transition to next-generation infrastructure in future - which will continue to be regulated by the PSR (FCA in future) and the Bank of England.
Pay.UK will retain its fundamental role as operator of existing interbank payment systems.
Through this new model, Pay.UK’s role is clarified and focused on the critical running of current interbank systems, optimising to maintain the resilience of these systems and ensuring they can best serve today’s ecosystem. Pay.UK’s unique expertise will be fed into all levels of the new model, including through representation on the Retail Payments Infrastructure Board and Delivery Company.
The Committee will set its strategy and establish the new model to progress activity at pace.
The Committee will publish its strategy for retail payments infrastructure in the autumn.
The Committee is clear that next-generation infrastructure must support innovation, competition and security, keep pace with end-user needs as they develop, and support interoperability between existing and emerging forms of digital money. The strategy will reflect objectives across the authorities.
The Committee’s work remains closely aligned with the design phase for the digital pound, the UK’s proposed potential retail central bank digital currency. Any future decision on the digital pound will take account of wider trends in money and payments, and the Committee’s outputs will be an important factor in the digital pound assessment.
The Bank of England will work at pace to establish the Retail Payments Infrastructure Board and support the industry-led Delivery Company.
The new model ensures next-generation infrastructure will be designed and delivered in line with the government’s ambitions in the National Payments Vision by technical experts across the Bank of England and industry participants, while ensuring transparency and reporting to the Committee.
As Chair of the Retail Payments Infrastructure Board, the Bank of England will now work with ecosystem participants to establish these new structures, including supporting the setting up of the new industry-led Delivery Company.
As a first step in this process, Vim Maru (Chief Executive Officer, Barclays UK) has offered to act as the chair designate of the Delivery Company, working with the Bank of England in the immediate-term to determine its relationship with the Retail Payments Infrastructure Board. Formal board appointments will be finalised as part of the establishment of the Delivery Company. The Committee welcomes these steps.
An appointments process will take place for members of the Retail Payments Infrastructure Board. This is with a view to the first meeting of the Board taking place in October.
The Bank would welcome further written engagement on these steps at RPIB@bankofengland.co.uk