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The UK has a proud history as a global payments leader – with a world-renowned fintech sector and impressive record of innovation in payments, with over 90% of payments made electronically. However, as recognised in the Garner Review, when it comes to account-to-account (A2A) payments, the pace of innovation has stalled.
When the UK’s Faster Payments system launched in 2008, it set the global standard for real time payments. But in recent years, other markets have adopted similar systems and continued to surge ahead, implementing new overlay features, in particular with retail payments.
In response, the UK is raising the bar again, with an ambitious programme of reform - the National Payments Vision (NPV) - to modernise UK’s rails and unlock the next wave of growth. This transformation has the potential to unlock up to £9 billion in annual GDP uplift over the next five years driven by retail payments, B2B payments and digital assets.
A launchpad for innovation
A modern, dynamic and adaptable A2A system will act as a platform for innovation, providing the necessary foundations to enable a burgeoning fintech market for new products and services, offering more choice for both consumers and businesses.
Markets such as Brazil, India, Thailand and Sweden offer examples of rapid growth of A2A payments and give a glimpse of the further opportunities to unlock value for consumers, fintechs, businesses and ultimately the UK economy.
The time is now for industry and government to seize this growth opportunity and work together to build an A2A environment fit for the future. After proudly wearing the innovation crown for decades, the UK cannot afford to waste this opportunity to drive real change. The country’s fintechs will play an important role in facilitating innovation, but for that to happen we need realise the ambition of the NPV and ensure that new capabilities are rapidly realised and delivered for all stakeholders.
Going after growth
A modern underlying A2A infrastructure is crucial - it will provide the resilient foundation on which fintechs will innovate. That’s why a modular, flexible approach isn’t just smart, it’s essential to deliver a multi-layered interoperable payment ecosystem which will facilitate high transaction volumes, resilience, security and interoperability. With the UK’s needs at the forefront, the benefits the NPV can deliver include:
- Enabling retail A2A payments, offering increased choice for businesses
- Faster government payments, like real-time benefits, emergency aid, and business support - we’ve seen this work well in Asia Pacific
- Quicker and more accessible cross-border transactions, enabled by fast multi-currency payments and seamless stablecoin use – Peru is a great example of what’s possible
- A modern, modular platform that lays the groundwork for breakthrough innovations, especially in a world of digital assets and agentic payments.
Enabling interoperability
The digital asset revolution is likely to lead to a “multi money world” and the interoperability across platforms and asset types will be essential to growing services and unlocking UK growth potential. In practice, this means connecting solutions such as bank apps, wallets (for both fiat and digital currencies) along with stablecoins and tokenised deposits.
A modern UK A2A infrastructure also offers huge opportunities for streamlining cross-border transactions – connecting global platforms to provide instant settlement and seamless processing and enabling money movement across borders, at lower-cost and at the touch of a button.
We need to work together, across the industry, to ensure a secure and resilient ecosystem.
Securing the ecosystem
As with all new payment methods, new use cases bring a renewed risk of fraud. To counter this, innovation must keep pace, with fraud prevention solutions delivering protection across a range of use cases. Network level fraud prevention systems cover 95% of all UK A2A transactions today. Further coverage and enhanced data sharing along with advanced analytics can continue to strengthen anti-fraud AI models, helping to keep people and their hard-earned money safe.
Reducing fraud losses matters for the financial sector - and just as importantly, it helps remove the incentive for criminals to target people with push-payment scams.
Ultimately, the benefits would be extensive - not just for individuals and businesses impacted by fraud, but also for the wider economy, with lost funds reinvested in growth. US figures suggest this could unlock up to 0.5% of GDP to be reinvested into the economy, and the UK stands to benefit similarly.
Unlocking new use cases
A2A infrastructure enables new ways for people to pay and get paid. These include instant payments, variable recurring payments, embedded finance and digital wallets, to name a few. It is the responsibility of those of us working in payments to ensure the foundations are in place to drive the competition, innovation and financial inclusion.
A key part of tapping into the £9 billion growth opportunity is testing future technology in a contained environment where new ideas and products can be piloted, away from critical national infrastructure. Mastercard’s UK A2A Sandbox is one such example. It provides banks and financial institutions access to its next generation global A2A instant payments technology in a safe development environment, facilitating experimentation, validation and collaboration to test new ideas and use cases and, letting fintechs do what they do best – innovate.
Driving progress
With the right conditions in place, the payments sector can deliver immediate economic dividends and act as a catalyst for broader technological progress and innovation, reclaiming the UK’s rightful position at the forefront of global payments
The National Payments Vision is key to enabling a thriving, competitive fintech community, setting standards and driving the adoption of new services.
The modernised infrastructure will provide the foundations to build this competitive ecosystem for the next wave of payments innovation and economic growth in the UK. But realising the full potential of A2A payments requires more than just technology - it demands proactive governance and collaboration across the payments ecosystem to build an infrastructure that is fit for the future, and the many services that will be built on top of it.
Only then will we unlock the £9 billion growth opportunity.
To discover more about Mastercard's A2A solutions, and to start delivering change in your organisation, visit their A2A solutions page.
