What the UK’s New Retail Payments Infrastructure Means for Merchants

Bank of England Framework

The UK is undergoing a major transformation in how retail payments infrastructure is managed and modernised. On 15 July 2025, the Bank of England released a new framework titled “A New Approach to Retail Payments Infrastructure,” outlining its vision for a more competitive, secure, and innovative payments ecosystem.

But what does this mean for UK merchants?

Here’s a breakdown of the changes, what they mean in practice, and how you can prepare.

A New Payments Model: What’s Changing?

The UK retail payments infrastructure is being restructured under a three-tiered governance model:

• Retail Payments Infrastructure Board (RPIB) – Led by the Bank of England to set the overall strategy.
• Delivery Company – An industry-led group that will design, fund and implement next-generation infrastructure.
• Pay.UK – Remains in charge of maintaining existing systems like Faster Payments and Bacs.

This collaborative public-private model is designed to accelerate innovation, enhance system resilience, and support the development of future payment methods, including the proposed digital pound.

Key Benefits for UK Merchants

✅ More Innovation, More Choice

Merchants may gain quicker access to alternative payment methods, including account-to-account (A2A) payments, QR code checkouts, and instant bank transfers — all without relying on card schemes.

✅ Faster Settlements and Fewer Outages

The new model prioritises infrastructure resilience and speed. This means reduced downtime, faster fund transfers, and improved refund processing.

✅ Increased Competition in Payment Services

By separating infrastructure from service provision, the UK is encouraging new providers and Fintechs to enter the market, potentially offering better rates and tailored merchant solutions.

Risks and Things to Watch

• No Immediate Changes, But Gradual Migration Ahead
  Legacy systems will continue to operate, but merchants should prepare for future upgrades to stay compatible.
• Potential Integration Costs
  Over time, your POS, payment gateway, or accounting tools may need adjustments to connect with the new rails.
• Digital Pound Ready?
  The infrastructure will support both traditional payments and digital assets. Merchants may eventually need to accept retail digital currency alongside other methods.

Key Milestones

• Autumn 2025: The Strategy for retail payments infrastructure will be published.
• Late 2025: The Payments Forward Plan will outline upcoming initiatives across the entire ecosystem.
• October 2025: First meeting of the Retail Payments Infrastructure Board.

Wrapping it up for Merchants

This next-generation infrastructure isn’t just about payments plumbing; it’s about reshaping how UK businesses get paid. While many of the changes will take time, merchants must stay informed and prepared for the transition.

At Merchant Advice Service, we help businesses compare payment providers and navigate change confidently. If you’re unsure how these changes affect your business, speak to our team or use The Payments Directory® to explore options tailored to your industry.