Future of UK payments: The next phase must deliver for retailers
Following our response to the Retail Payments Infrastructure Board’s (RPIB) consultation, the Bank of England has outlined prospective designs for the future of UK retail payments infrastructure and confirmed that work will move into an industry co-creation phase. A Blueprint is expected to be handed to the industry-led Delivery Company in Spring 2027.
For retailers, this is a significant milestone. Decisions made now will shape future payment services, their cost to businesses and the experience they offer consumers.
What has the Bank proposed?
The proposed infrastructure includes:
Modular architecture: A common platform supporting existing services and new payment methods and forms of money.
Common access and messaging: Standardised access and ISO 20022 messaging to improve interoperability and reduce duplication.
Payment orchestration: Validation, routing and sequencing of payments, including batches, potentially supporting migration from Faster Payments and Bacs formats.
Shared services: Potential common capabilities covering fraud prevention, data sharing, directories and alias services.
Clearing and settlement: Improved liquidity efficiency and coordinated settlement through the Bank’s Real-Time Gross Settlement (RTGS) service.
Resilience and capacity: Infrastructure able to accommodate growing volumes, faster payments and operational and cyber disruption.
These are initial proposals, subject to further industry collaboration.
Key issues to resolve
The Bank has recognised several challenges that will be particularly important to retailers:
A2A payments: Infrastructure alone will not secure merchant adoption. Commercial viability, acceptance, payment certainty, speed, reliability, refunds and consumer protection must also be addressed.
Fraud and liability: Stronger verification, richer payment data and traceability are needed, alongside clear arrangements for reimbursement, liability and dispute resolution.
Competition: The balance between central shared services and private-sector provision remains unresolved. The infrastructure must support innovation without creating unnecessary costs or barriers.
Migration: Respondents favour phased migration over a 'Big Bang' approach. Costs, testing and operational readiness must be considered, particularly for Bacs, Direct Debit mandates and existing dependencies. Current systems must remain resilient until replacements are proven.
Financial inclusion: Future arrangements must support accessible payment journeys, assisted payments and appropriate non-digital alternatives, including cash and cheques.
What happens next?
The programme will progress through four stages:
Blueprint development: The Bank, RPIB and Design Authority prepare an initial high-level design.
Industry co-creation: From November 2026 to Spring 2027, stakeholders test and refine the proposals.
Handover: In Spring 2027, the Blueprint passes to the industry-led Delivery Company for detailed design, procurement and construction.
Implementation: The infrastructure moves through build, transition and migration before becoming operational.
Industry, end-user representatives, technical specialists and consumer groups will remain involved throughout.
Ensuring retailers' priorities shape the outcome
The co-creation phase is an important opportunity to ensure the future infrastructure works for businesses and consumers. Our priorities are to ensure:
New payment methods deliver genuine competition and lower acceptance costs.
A2A payments are commercially viable for merchants, with reliable payment confirmation and appropriate consumer protections.
Fraud, refunds, disputes and liability are clearly addressed.
Shared infrastructure enables innovation and competition without creating additional costs or barriers.
Migration is affordable, thoroughly tested and phased to minimise disruption.
Businesses of all sizes and their customers are considered in decisions on accessibility and payment choice.
The Bank’s response provides a foundation for further work. We will continue engaging with the Bank and wider industry to ensure retailers' priorities influence the design and delivery of the future payments system.
