UK National Payments Vision: Igniting innovation and delivering £9bn economic growth

Britain sparked the Industrial Revolution, lighting up the world with breakthroughs in manufacturing, transport, and energy. But as others raced to industrialise, the nation that once led the charge began to see competition from around the world, challenging its position. Now, history risks repeating. 

The UK has long been at the cutting edge of payments innovation. From ATMs to the first large scale real-time payments solution, the Faster Payments System (FPS), and open banking, all have helped shape how the world transacts. But global competition is heating up. To maintain its edge and unlock the next wave of economic growth, Britain must once again reinvent how money moves.

“When the UK launched Faster Payments, it didn’t just upgrade the system – it revolutionised how money moves,” says Peter Reynolds, EVP of Real-Time Payments at Mastercard. “It set the global standard for real-time account-to-account transactions. Innovations like open banking are turbocharging the ecosystem, fuelling competition, and opening the door to a faster, smarter future. These aren’t just technological tweaks – they’re the building blocks of a more dynamic, inclusive economy.”

The FPS system is a jewel in the crown of the UK. It has been exported to markets such as the USA, Singapore, Thailand, the Philippines, and others, and has been enhanced through multiple generations. However, the UK risks losing its edge. 

“As other countries drive forward, they’re deploying the latest technologies without the legacy friction we still tolerate” Reynolds explains. Take something as basic as sending money to a friend.

“In the UK, we’re still asking people to type in sort codes and account numbers. Other countries use multiple aliases – digital identities, email addresses, and phone numbers – and are rapidly extending real time payments to new technologies like contactless, giving consumers more choice in how they pay. If we want to lead – not lag – we need to modernise now. The next wave of growth depends on it.”
 

Account-to-account (A2A) payments have undoubtedly reshaped the UK economy over the last two decades, with around 11 billion transactions processed each year. ¹

A2A payments drive economic growth by enabling faster settlements and improved liquidity management for businesses, enhancing fraud protection, and fostering service innovation that supports the burgeoning fintech ecosystem. 

They also promote financial inclusion by allowing more people to participate in the formal economy. In 2023 alone, it’s estimated $3.4 billion of GDP in the UK was facilitated by real-time payments.²

Central to these historic successes are a collaborative financial industry and the UK’s approach to effective and progressive regulation – seen through the Competition and Markets Authority, Financial Conduct Authority, and Payment Systems Regulator’s work to make open banking a reality ahead of other markets. 

Both public and private sectors have worked hand-in-hand to create a forward-looking and secure environment in the UK.

The challenge now is to maintain this approach and ensure ongoing modernisation of the UK’s A2A system to promote further economic progress.
 

Like the factories of the Industrial Revolution that once powered the UK’s economic success, today the financial networks are a key engine of growth. The government’s National Payments Vision (NPV) acknowledges the critical role strong, effective payments – particularly A2A – will play in its central mission to boost the UK economy. ³

The private sector agrees. Recent analysis by EY and Mastercard finds that a more modular, scalable and flexible approach to A2A payments – allowing more participants to ‘plug and play’ and offer additional services – could boost UK GDP by £9 billion a year within a five-year period. 

Modernised infrastructure has the potential to take the UK’s fintech sector to the next level - a sector that is on track to employ 130,000 people by 2030.⁴ A more accessible A2A system would open the door for greater innovation and drive regional growth in key fintech hubs such as Manchester, Bristol, and Leeds.

Enhancing A2A services would also lead to business growth as businesses will benefit from faster settlements and improved liquidity management, as well as lower cost cross-border payments. EY estimates a value of £880m in GDP per annum alone by reducing trade costs and improving the efficiency of cross-border payments.⁵

Meanwhile, consumers stand to benefit from greater choice at checkout, as merchants expand their payment options. And choice matters – 69% of millennials say they’re more likely to shop at stores that offer instant payment services.⁶ Other markets show what’s possible when modern infrastructure meets user-centric design. In Sweden, the Swish app — used by over 8 million people in a country of just over 10 million — enables payments via mobile numbers and QR codes and is estimated to have boosted GDP growth by 0.5%.⁷
 

It’s no surprise that Sweden – which has developed its payments infrastructure within the regulatory framework of SEPA – is one market to look to for learnings. 

Not all real-time payments markets benefit from a cohesive regulatory approach, but SEPA regulations ensure standardisation and interoperability of A2A systems – both of which are key to future growth, particularly of cross-border payments which are vital in an increasingly global economy.

Reynolds equally recognises the importance of strong regulation in the UK’s future success. “Regulation shouldn’t be seen as a hurdle. It’s not about stifling progress, but instead, bringing the industry together around a common roadmap to support innovation, and ensuring the needs of customers come first – especially through fraud detection.”

This is particularly important because enhanced fraud detection is crucial for realising EY’s £9bn per annum estimate, with authorised push payment fraud costing the UK nearly £460m in 2023.⁸
 

The NPV lays out a bold roadmap for the future of payments technology – one that calls on government, regulators, and industry leaders to unite and deliver a payments ecosystem that helps businesses grow, enhances the user experience and promotes innovation.

From steam engines to digital wallets, Britain has always harnessed technology to fuel progress. By modernising the payments ecosystem, and bringing together effective regulation, fintech innovation, and public and private sector collaboration, the UK is well positioned to take back its crown and reinforce the nation’s legacy as a pioneer in payments.

Discover how Mastercard Real-Time Payments can help your business stay ahead of regulation, unlock growth, and lead in innovation: What’s Next for Real-Time Payments

1. Annual summary of payment statistics 2023
2. ACI Worldwide
3. National Payments Vision, GOV.UK
4. Whitecap Consulting
5. Calculations based on benefits created in the years following the implementation of reforms.
6. Mastercard’s New Global Payments Index (October 2024)
7. Future of Payments Review
8. Authorised push payment fraud information, UK Finance