Industry Advice: How To Plan For The New Payments Architecture

Thought Leadership· 9min April 1, 2022

Bringing payments architecture into the modern world is an undeniable necessity. Fortunately, the project to modernise and future-proof the UK’s payments infrastructure is well underway.

The New Payments Architecture (NPA) is intended to provide the country with a resilient, robust, stable and secure payments network. It should boost competition and innovation by lowering barriers to entry for Payments Service Providers (PSPs.)

Focus on the customer journey

While much of the change is happening at the back end and well out of the view of the end users, participants need to think about how they can use the new framework to bring additional value to their customers.

Once implemented, the NPA infrastructure will support the development of new, innovative ‘overlay services’ as well as enhance the existing ones such Confirmation of Payee and Request-to-Pay through the availability of a richer ‘ISO20022’ data set. There is obviously enormous potential for banks to utilise these features in their own services. 

There will also be other opportunities for participants that want to enhance the customer experience. For example, the ability to provide enhanced remittance information across both B2B and B2C channels using the larger ISO2022 data set.

If participants can use the richer data sets, better liquidity and faster response times to create customer experiences that have new features and more flexibility, then this would be a highly desirable outcome. 

Addressing NPA migration and transition challenges

The migration and transition to NPA is a big challenge. With these challenges in mind, banks must be prepared to answer pressing questions which include:

  • Is it possible to decouple the technical project from the migration programme?
  • Do banks really want to manage the transitional iterative rules during the long migration window?
  • Could it be possible to complete the NPA migration deferring the need for substantial redevelopment of the core banking system until a later date?
  • Could the existing FPS infrastructure be retired earlier, saving operating costs associated with soon-to-be redundant infrastructure?
  • Is there a means of being prepared for, and insulated from, the technical NPA transition and therefore minimising the NPA day one impact?

Engage with the experts

Large financial institutions often have very set ways of doing things. In order to best deal with the challenges of adopting the NPA, it would therefore be beneficial to get views from outside the organisation, to ensure that all relevant opportunities are identified and strategic direction is set accordingly. 

Participants ultimately should seek expert advice to facilitate and guide them through all of the requirements and questions and impact assessments. Only then can they be sure that they’ve covered all the potential outcomes. 

Think beyond NPA

While the NPA is designed to help the payments industry deal with challenges today, participants should also have an eye on the future. If banks are already investing much time and capital on the NPA, then it would be sensible to consider the potential payments landscape beyond NPA.

Whilst the precise nature of these changes is still evolving, an API and micro-services based infrastructure will provide the flexibility to adopt to both the NPA and other future payments technology that supersede it.


Marcus Bateman

Head of UK Product


Written by

Marcus Bateman Senior Product Manager for Form3

Senior Product Manager for Form3 Financial Cloud, a new and innovative company providing FinTech solutions to Financial Institutions. Previously Director for RBS Domestic payment Product Management team. This included UK payments products including Bacs, Faster Payments, CHAPS, Cheques, and Agency Banking.