The £9 billion payments overhaul that’s about to change how every UK business gets paid
Key Points
- UK Finance's new Plan for Growth says modernising Britain's account-to-account payments infrastructure could generate £9 billion a year, citing EY modelling
- DeliveryCo, chaired by Barclays UK boss Vim Maru, is the industry vehicle building the next-generation rails, with operational launch targeted for 2030
- Visa and Mastercard currently handle 95% of UK card transactions, a dependency UK officials increasingly frame as a strategic vulnerability
- Small businesses are the biggest near-term winners through lower merchant costs, faster settlement and improved cashflow
- A parallel Great British Tokenised Deposit pilot could add a further £3 billion in benefits through fraud reduction and operational efficiencies
The cards in your wallet might soon have competition you’ve actually heard of.
UK Finance, the trade body that represents nearly every major bank operating in Britain, published its Plan for Growth: From Strategy to Delivery on Monday (11 May), putting hard numbers on a project the City has been quietly building for years.
According to EY modelling commissioned by UK Finance, modernising Britain’s account-to-account payments infrastructure could generate around £9 billion a year in economic uplift through lower merchant costs, faster settlement for small businesses, reduced fraud, and stronger competition in payments markets.
The vehicle for all of this has a name only a banker could love: DeliveryCo.
It is the industry-owned company set up under the Bank of England’s new model to procure and build the next generation of UK retail payments infrastructure.
Barclays UK chief executive Vim Maru is chair-designate, and the funding consortium pulls in Lloyds Banking Group, NatWest, Santander UK, Nationwide, Coventry Building Society and the Link ATM network.
Visa and Mastercard are taking stakes too, which tells you something about how seriously the incumbents are taking it.
Why now?
Visa and Mastercard process roughly 95% of all UK card transactions, according to the Payment Systems Regulator. Britain made 48.8 billion payments in 2024, with card payments accounting for 64% of the total. That is two American companies sitting on top of nearly two-thirds of every payment in the UK economy.
One banking executive noted that if Visa and Mastercard were ever switched off, Britain would be “sent back to the 1950s”.
Russia’s experience after sanctions in 2022, when both networks suspended operations within weeks, is the worked example nobody at the Treasury wants to think about for too long.
Geopolitics has accelerated a plan that was already moving. Bank of England Deputy Governor Sarah Breeden has framed DeliveryCo as a resilience layer rather than a replacement, but the practical effect is the same: a domestic rail that means UK commerce keeps running whatever happens in Washington.
What changes for businesses
The £9 billion figure from EY is not a windfall, it is a productivity dividend, and it lands most heavily on small businesses.
Card fees on a typical £30 transaction can run anywhere from 30p to over £1 once interchange, scheme fees and acquirer margins are stacked up.
Account-to-account payments, where money moves directly between bank accounts without an intermediary network, cost a fraction of that.
Faster settlement is the other half. Under current card rails, a small business waiting for funds to clear can sit on a working capital gap of two to three days.
A modernised A2A system settles in seconds, which means smaller firms managing thin cashflow get their money the moment a customer pays.
UK banks already provide close to £200 billion in lending and overdrafts to SMEs, much of which exists to plug exactly that timing gap.
E-commerce businesses gain twice over. Lower transaction costs at checkout mean margin improvement on every sale, and modernised infrastructure makes fraud easier to spot, which UK Finance says feeds directly into stronger consumer confidence in online shopping.
The timeline
DeliveryCo is expected to be operationally established and empowered through 2026, with the Payments Vision Delivery Committee handing detailed technical blueprints across next year. T
he current target is a fully operational national system by 2030. UK Finance wants the Bank of England and HM Treasury to confirm the policy direction and target architecture for the next-generation infrastructure during 2026, which would unblock procurement.
UK Finance has flagged a parallel track that matters just as much. Its Great British Tokenised Deposit pilot, a market-led initiative testing programmable sterling deposits on distributed ledger infrastructure, could add a further £3 billion in economic benefits on top of the £9 billion headline figure, according to analysis it conducted with EY.
That number covers fraud reduction, operational efficiency and macroeconomic benefits across 40 identified use cases.
What could go wrong?
Three things, mainly. The first is regulatory drift. UK Finance is explicitly asking HM Treasury and the FCA to ensure that their ongoing review of assimilated payment services law gives tokenised deposit projects enough flexibility to develop iteratively. If the rulebook lags, GBTD slows.
The second is the open banking framework. The Plan for Growth pushes HM Treasury to deliver secondary legislation this year to put open banking on a commercially sustainable long-term footing, with the FCA finalising interface rules by Q1 2027. Without that, the layer of services that sits on top of the new infrastructure cannot scale.
The third is the digital pound question. The Bank of England has been progressing carefully on regulated stablecoins, but uncertainty about whether a central bank digital currency might displace private-sector digital money is, according to UK Finance, beginning to affect investment decisions. The trade body wants a clear decision taken on the digital pound rather than indefinite consultation.
What it means for you
Most of this will be invisible. Tap your card next year and it will probably still say Visa or Mastercard on the front.
But the rails underneath are being rebuilt, and the bet from UK Finance, the banks, and increasingly the Treasury is that the visible result over the next four years will be cheaper payments at the till, faster money in small business accounts, less fraud, and a payments system that does not depend on two companies based in California and New York continuing to want British custom.
The Mansion House speech in July is the next political checkpoint.
Whether the Chancellor uses it to confirm the architecture, the funding, and a binding delivery timetable will tell you everything about whether the £9 billion lands.
