Innovate Finance has responded to the @Bank of England’s Retail Payments Infrastructure Board consultation on the design of future UK payments infrastructure. 

Payments in the UK has long been an area of innovation, underpinned by the launch of the UK’s Faster Payments System in 2008. We now need new infrastructure to provide the foundation for cheaper, faster, secure and innovative payment options for consumers, business and merchants, including 

• mainstream adoption of cVRP open banking account to account payments, providing instant, secure payments in ecommerce and in-store; 
• well established use of regulated stablecoin; 
• world leading, trusted agentic commerce; 
• interoperable payment methods and cheaper, faster and cross border payments.

We  recommend:

1. Move quickly to build a next generation instant payments rail (the underlying infrastructure that moves funds and provides related messaging tagged to these) that significantly reduces costs, has extensive messaging capability to support data rich services, and can be easily and cheaply upgraded. 
2. Alongside this, new orchestration functions are needed to enable fraud data sharing, full adoption of ISO 20022 messaging and interoperability across payments rails and schemes, and support international connections.  This could include a UK ‘alias’ scheme across retail payments (allowing you to send or receive money using a simple piece of information like your mobile phone number). More work is needed to identify which of these functions should be a ‘national utility’, which can be built into the payment rail infrastructure, and which can be provided on a commercial basis.
3. The infrastructure and ecosystem architecture and design should aim to create a competitive market for schemes, products and services where innovation and competition can flourish. The orchestration and rails should provide capability and capacity that can support new market driven services and products.
4. As a shared utility for the whole payments ecosystem (including future innovators and market entrants), the new core infrastructure needs effective, independent and transparent governance and financing to ensure decisions are taken in the interests of all. 
5. Access for Non-Banks: Non-bank firms must be allowed to connect and build interfaces which interact with the core infrastructure, facilitating a broad range of ways for non-banks to secure access, so that providers can also offer greater choice to firms wanting to retain an indirect access approach. This should include more efficient settlement cycles and liquidity funding.
6. A continued regulatory focus is needed to ensure effective competition, including CMA ongoing work and a focus by the FCA as it takes on the Payment Systems Regulator's powers (including proportionate, objective and non discriminatory access to payment networks and accounts).  

As the trade association that represents and convenes innovators across the payments ecosystem we will continue to work with industry and regulators to support rapid development of the UK infrastructure.

Read our full response here