UK payments system is deceptively complex

Beneath every tap of your card is a complex web of payment systems you don’t even notice – and we mustn’t fall behind, writes Keith Douglas

When the government published its Payments Forward Plan last month, it set out the course for the retail payments sector over the next three years to deliver its National Payment Vision (NPV). This covers everything from open banking, regulatory reform, stablecoin and cash provision through to fraud strategy and the potential for a digital pound. The starting gun has been fired – now the ecosystem must deliver the NPV at pace.

The stakes are high, given the UK’s reputation as a global payments pacemaker. Much of this reflects the wide adoption of digital payments, including through cards and digital wallets. And it also reflects a system that few consumers will have heard about: the Faster Payments System (FPS). Introduced in 2008, FPS enables near‑instant, 24/7 money transfers between bank accounts and has become a worldwide model for account-to-account payments.

Innovation will be vital to maintain its standing, anchored by resilience, security, convenience and consumer choice. 

Like a swan gliding, payments work best when they seem effortless and people don’t see the vigorous paddling beneath the lake. Delivering that friction‑free experience, however, requires significant coordination behind the scenes.

It’s also imperative that the UK acts now to seize the benefits on offer. EY estimates that creating more advanced infrastructure to support the growing account‑to‑account payments market could deliver a £9bn economic boost annually – the same yearly contribution as English football. 

Tackling financial fraud

While these foundations take shape, the payments businesses and consumers rely on must continue to withstand ever‑evolving fraud threats, enabling wages to land on time, bills to be settled, online shopping or SME cash flow.

The UK has an unmatched track record in payments resilience, with its core account-to-account retail payment systems processing more than £27bn a day. As the industry modernises, we must build on this, delivering ever stronger consumer protections. Without the right defences, criminals will exploit gaps faster than we can close them.

The UK must move decisively to get ahead of the next generation of financial crime. Real‑time monitoring, stronger verification and intelligence‑led fraud tools aren’t optional; they’re foundations to keep future innovation secure. Payment service providers are part of this battle and already having an impact. Mastercard’s AI‑driven Consumer Fraud Risk, for example, helped cut authorised push payment fraud by 20 per cent a year after its introduction.

Expanding our payment horizons  

Consumers, businesses and government have different needs, and modern payments must meet them. People now expect considerable choice in how they pay, from cards and open banking to emerging agentic experience and, soon, new forms of digital currency. And they expect these to all work seamlessly across devices. 

The UK has this chance to lead the next wave of digital payments, creating a system where moving between different forms of money – from bank deposits to tokenised assets or regulated digital currencies – is as effortless as today’s contactless transactions.

To realise this future, trust must be embedded from the start. Not only through strong fraud controls, secure digital identities and proof that new and existing payment networks can safely co‑exist and draw strength from each other, but also by giving consumers confidence that their money is safe and their rights are clear. 

Defining the UK’s future payments landscape

The decisions made this year will determine how the UK pays, transacts and moves money for decades. By balancing innovation with resilience, expanding user choice and building a trusted multi‑money system, we can secure a globally competitive payments landscape that works for everyone. 

The public may never see the intense work beneath the surface – and that’s the point. Our job is to keep the UK payments system gliding like a swan, while together we create a modern, future-proof payments framework.

Keith Douglas is CEO of Vocalink, a Mastercard company