UK payments changes widen access for FinTechs

Changes to the UK’s real-time payments framework are expected to make it easier for non-bank payment service providers (PSPs) to access the Faster Payments System, reducing barriers to entry while supporting greater competition across the country’s digital payments ecosystem.

The revised approach reduces pre-funding requirements for participants, lowering the cost and complexity of joining the UK’s instant payments infrastructure. The changes are intended to broaden participation among FinTechs and payment providers, enabling more organisations to offer real-time payment services to businesses and consumers.

Industry participants have welcomed the move, noting that easier access could encourage innovation and expand customer choice in the growing digital payments market.

Mark Fieldhouse, Chief Revenue Officer at Form3, said the revised liquidity model represented a positive step towards making instant payments more accessible for newer market entrants.

“The introduction of a flexible liquidity model is a welcome step in lowering the cost and complexity of accessing instant payments in the UK. By reducing pre-funding requirements, it should make it easier for more FinTechs, particularly newer entrants, to participate in real-time payments, driving greater competition across the already booming London FinTech industry,” he said.

While the changes are expected to improve access, Fieldhouse noted that expanding participation must be supported by resilient technology capable of managing payment operations securely and efficiently.

“Maintaining high standards within instant payments is crucial for end users and the UK’s reputation as a leader in modern payments. This new liquidity model helps to address one of the biggest challenges in instant payments, but banks and FinTechs will still need to have their own robust infrastructure in place that can manage payment processing, liquidity requirements and security protocols like anti-fraud measures in real time. Yes, customers want speedy payments, but not at the cost of security,” he said.

He added that organisations entering the market should ensure they have the operational capabilities needed to support high-volume, real-time payment services before scaling their offerings.

“The risk here is that new entrants will run before they can walk, without having the necessary infrastructure in place to handle real-time payments at scale,” Fieldhouse said.

The changes form part of wider efforts to strengthen competition and innovation in the UK’s payments landscape while maintaining the resilience, security and reliability expected of real-time payment systems.