By Charles Damen (Token.io; UKPI TPP Constituency Board Director) & George Miltiadous (HSBC; UKPI ASPSP Constituency Board Director)
We’ve spent our careers on different sides of the payments’ ecosystem – George in banking and Charles in payment acceptance – but we share the same conviction: the next era of UK payments will not be built by an institution, it will be delivered by an ecosystem. The UK has a real opportunity to make account-to-account payments work at scale for everyday commerce, and that will only happen if banks, third party providers (TPPs), businesses and regulators align on a common, trusted framework. That’s why we’ve chosen to support UK Payments Initiative and the development of a commercial framework for recurring open banking payments.
In 2023 Joe Garner’s “Future of Payments” report identified the need for greater merchant and consumer choice in UK retail payments. This was followed in 2024 by HM Treasury’s “National Payments Vision” which called for seamless account-to-account payments to be developed as a ubiquitous payment method.
Building on our UK’s strong open banking foundations, clear policy direction and an ecosystem ready to collaborate, the work done by UKPI presents an amazing opportunity to start delivering on these ambitions in a tangible way. In particular, the development of a modern, flexible, and digitally native recurring payments product will help underpin a strong user experience, lower payment costs for businesses and support broad market adoption.
At its core, payments infrastructure is the financial plumbing that enables commerce to take place across the economy. When that infrastructure evolves successfully, it supports businesses, enables new services and helps drive economic growth.
The next phase of open banking
Payments feel innovative when they disappear into the background: simple, reliable and secure. Banks, fintechs, infrastructure providers, regulators and end users (consumers and merchants) all play a role in shaping how money moves through the economy. When those players come together around a shared objective, the result is new payment capabilities that can support innovation at scale.
Open banking has moved beyond its early regulatory phase and, to extend the reach of open banking payments and provide increasing customer choice, enhanced open banking payments can now be delivered by the banks on a commercial basis.
For banks, this shifts the open banking conversation from compliance to innovation. Commercial open banking payments are compelling because they combine customer control with a modern payment experience. Customers can set clear permissions and limits, while benefiting from a flexible yet transparent way to manage recurring payments without the friction of legacy approaches.
This also present an opportunity for banks to support new customer journeys: subscriptions, utilities, repayments and more, while leveraging the UK’s reliable and scalable open banking infrastructure and instant payment rails. Done well, open banking recurring payments can reduce payment friction, improve customer outcomes and help banks enable innovation in a way that is interoperable across the market.
For TPPs, this is core to their business model. The flexibility of UKPI’s modern recurring payment proposition and commercial framework means it can underpin a wealth of different use cases, including “one-click” checkout journeys, flexible instalment repayments, and even physical Point-of-Sale payments.
By bringing the industry together to jointly develop core scheme rules and other shared artefacts (including, for example, a potential trustmark), UKPI is driving development of a payments proposition that merchants will want to offer and that consumers will recognise, trust and adopt.
Collaboration in practice
Financial institutions remain central to the trust, resilience and security that underpin the payments system. As the ecosystem evolves, banks have a responsibility not only to maintain that infrastructure but also to help shape the next generation of payment capabilities.
Collaboration is not theoretical in UKPI. It takes place through regular working sessions between participating institutions. Board representatives meet on a fortnightly basis to work through operational planning, regulatory considerations and the practical design of the scheme itself.
Bringing together perspectives from across banks, fintechs and infrastructure providers helps ensure the framework being developed is robust, commercially sustainable, and capable of supporting the next generation of payment services.
But agreement on the technology alone is not enough. For payments innovation to succeed at scale, trust and cooperation across the industry are essential. Consumers need confidence that new payment methods are secure and reliable. Businesses need confidence that payment capabilities will be widely adopted and interoperable.
The collaboration we are seeing across the UK payments ecosystem today will play an important role in ensuring the UK remains a global leader in payments innovation.
