Inaction and uncertainty have plagued the UK’s approach to payments for some time, but with key deliverables anticipated in 2026, Paylume looks at how the National Payments Vision could turn that around.
The UK has been caught in a rut in recent years with its approach to payments policy. As other countries have moved forward, especially those like India, Brazil and the United Arab Emirates, the UK has begun to appear on the backfoot, after previously being viewed as a leader globally, particularly due to its success with Faster Payments and with the beginnings of open banking.
The EU has also progressed, with its payment services package agreed by co-legislators in December, and deadlines for sending and receiving instant payments through the Instant Payments Regulation and its Verification of Payee.
The National Payments Vision (NPV) has the potential to change that, considering the significant progress made in 2025.
What the National Payments Vision is?
The NPV is the government’s long-term strategy for modernising the payments ecosystem so it is more resilient and capable of supporting innovation and economic growth.
Published by HM Treasury in late 2024, it responds to the Future of Payments Review that was undertaken by the last government.
The NPV establishes a clear direction for how retail and wholesale payments should evolve, with the government suggesting that its vision is “for a trusted, world-leading payments ecosystem delivered on next-generation technology, where consumers and businesses have a choice of payment methods to meet their needs”.
For example, rather than prescribing a single technology, it focuses on outcomes such as greater choice for users, stronger competition, world-class infrastructure and high levels of security and consumer protection.
One of the goals of the NPV is to drive the digital transformation of financial services, modernising the country’s core infrastructure, providing clearer investment signals, and fostering competition and innovation. This includes a focus on four key areas: open banking as an alternative to cards, digital identity, the digital pound, and fraud prevention.
All of these have different degrees of urgency for the government. For example, it is more than likely that fraud prevention will remain a pertinent topic, considering the problems the UK has experienced with authorised push payment (APP) scams. In addition, open banking remains front of mind for the UK’s Financial Conduct Authority (FCA), which recently confirmed that the UK Payments Initiative (UKPI), a new company formed by 31 firms to enable variable recurring payments (VRPs), will be set up by the end of the year to manage the roll-out of a commercial VRP scheme.
By providing much needed upgrades to retail payments systems and defining a path to next-generation platforms, it envisages more speed and reliability, ensuring enhanced digital journeys across banks, fintechs, and commerce.
Coordinated governance and better public-private sector collaboration could finally unlock the investment opportunities that have not yet been achieved in areas such as digital wallets and account-to-account payments, aligning infrastructure reform with innovation.
What has been achieved so far?
Since publication, the main achievement has been putting governance and coordination in place.
For example, the Payments Vision Delivery Committee (bringing together His Majesty’s Treasury (HMT), the Bank of England and other regulators) has been established to oversee the delivery of the initiatives and to avoid fragmented reform.
Meanwhile, a strategic direction for future retail payments infrastructure has been agreed – signalling a shift away from the cancelled New Payments Architecture towards a more pragmatic and phased approach.
This has clarified that existing systems such as Faster Payments will continue to be improved, while long-term infrastructure revitalisation is planned via new structures instead of a single “big bang” replacement.
Why are there doubts?
Despite the renewed momentum that came with the unveiling of the NPV, there are inevitable concerns that it could all fail to materialise.
The NPV faces significant risks that could impede its delivery.
It comes off of the back of past failures of the state, notably the collapse of the New Payments Architecture (NPA), which conveys the challenges of large-scale infrastructure projects that come with complex governance and multiple stakeholders.
Open banking adoption has also begun to lag, despite a strong start in Europe, with low payment volumes and delays in advanced features like Variable Recurring Payments due to unclear commercial incentives and compliance complexity.
The government and industry alike will need to fight through these doubts should they wish for this to be a success, and to ensure that investment and innovation in the payments industry continues.
What is expected in 2026?
2026 will be pivotal for the NPV.
If things stick to plan, then it should be the year that the NPV shifts from strategy to execution.
In Q1 2026, regulatory bodies are expected to publish the Payments Forward Plan, a roadmap that will provide the sequencing, deadline and priorities for the payments initiatives encompassed in the NPV.
Also in Q1 2026, a Retail Payments Infrastructure Board will be fully set up and run a design consultation that is intended to translate strategic goals into concrete design choices for future infrastructure.
Meanwhile, by the end of the first half of 2026, a new Delivery Company is expected to be established, which will be responsible for taking those designs and delivering the next generation of retail payments infrastructure for the UK.
Together, these steps mark the transition from vision and planning to sustained, industry-led delivery.
With 2026 beginning in weeks, banks and fintechs operating in the UK need to embrace the initiative.
They need to closely watch this space as it will have a significant impact on their payments transformation roadmap in the upcoming years.
They will need to understand the potential of the improvements that will be delivered through the initiatives that will be included within the Payments Forward plan and match this up with any current plans to launch new payment products, so that they can maximise the investments that they are making on both fronts.
It is vital that collaboration takes place across the industry. Only through this can the wider payments ecosystem achieve and benefit from the NPV’s goals.
