The UK boasts impressive retail payments capabilities that underpin the economy. However, we should always be seeking to innovate and deliver better outcomes for businesses and consumers alike. To do this, we need to look at the core retail payments infrastructure and also address the fact that the payments industry is dealing with a congested pipeline of uncoordinated regulatory initiatives.
Without a new approach and effort, we risk losing ground to our international peers.
So, what needs to change?
The answer is twofold. Firstly, we need a clear strategy that sets out what we want to achieve in payments, focusing our efforts on customer outcomes—both for individuals and businesses. Secondly, we need to renew our retail payments infrastructure to ensure they can support innovation in the market.
Jana Mackintosh of UK Finance
The market currently suffers from a tangle of regulation, which leads to decision paralysis and unclear priorities. This environment stifles innovation which complicates investment in payments.
To deal with the challenges, we need a new strategy, one that places customer outcomes at the heart of all decision-making. Consumers should have choice and accessibility in how they pay, and businesses should benefit from systems that settle payments quickly, efficiently, and securely.
Other nations have modernised and upgraded their payment systems to provide more choice, more security, and faster settlement times. We should look to do the same.
The UK needs a single, unified regulatory voice—led by the Bank of England—to oversee the future of payments infrastructure. This should guide a public-private partnership that sets strategy for the payments landscape with industry needs. This would address the current fragmented landscape, with multiple regulators and competing initiatives, which has created uncertainty that slows innovation. This will allow the industry to innovate while complying with essential national security and resilience requirements.
The UK’s retail payments infrastructure also needs renewal, and the industry should play a leading role. Currently, there is a disconnect between those funding change initiatives and the decision-making bodies responsible for implementing them. Getting the best outcome here is a current area of focus for industry discussions.
What about Open Banking?
Open Banking payments offer both more choice and innovation for consumers. However, its potential remains unrealised. The Payments Systems Regulator (PSR) has acknowledged the role Open Banking can play in driving competition, but to fully unlock this potential, we need to focus on two areas: a sustainable commercial model and a revamped governance structure.
The UK has a golden opportunity to once again take a leadership role in the global payments market, but to do so, we need decisive action. This includes creating a new partnership with regulators, placing the Bank of England at the helm, and giving the industry a stronger role in decision-making. By focusing on strategic investments and delivering the necessary infrastructure, the UK can usher in a new generation of payment products and services that are faster, safer, and more innovative.
The industry stands ready to play its role across all aspects of this work, supporting the Bank of England, other regulators and the government to collectively enhance the UK payments landscape.
This is the way we can ensure UK payments remain globally competitive, delivering the outcomes that consumers and businesses deserve.
The time for bold action is now.
Jana Mackintosh is managing director, payments and innovation at UK Finance
Jana is delivering a presentation about the UK’s National Payments vision on Day One of Open Banking Expo UK & Europe on 15-16 October at the Business Design Centre in London. Click here to find out more about the speaker line-up, agenda and stages – and get your ticket.
