New Payments Architecture

Thought Leadership· 9min December 11, 2019

Plumbing for the 21st century

Nestling between the River Thames and the cycle super highway is a memorial to a chap called Joseph Bazaalgate. Thousands of cyclists’ whizz past it every day without noticing it. Nevertheless, it stands on top of his creation and is one of the wonders of Victorian engineering - the London Sewers.

Completed in 1875, when London had a population of around two million, those same sewers are now being used by over eight million London residents. Only now, nearly 150 years later, is London having to invest £4.5bn in its plumbing - nearly one thousand times the amount spent on the original solution. Why so long after? Because Joseph Bazaalgate had the foresight to double the capacity originally sized for London in anticipation of the future needs. Brilliant!

What is NPA ?

Right now, the UK payments industry under the guidance of Pay.UK and the watchful eye of the Payment Systems Regulator (PSR) is also undertaking a significant process of renewal of a different kind of plumbing. The UK’s interbank payments infrastructure. This is the infrastructure that sits behind your mobile, internet and branch banking services, ensuring that the billions of bank-to-bank payment messages, (e.g. Faster Payments, Standing Orders, Direct Credits and Direct Debits), continue to be processed in a secure and timely way.

The NPA Programme will create a new clearing and settlement infrastructure using a new common message standard (based on ISO20022). It’s a little bit like the plumbing for financial services. The ultimate aim is for this infrastructure to process Faster Payments, Bacs Debits or Credits and Cheque payments, thereby rationalising three current scheme infrastructures into one.

Conceptually, the NPA proposes a standardised, layered approach to facilitate better access, stability, resilience, innovation and competition. There’s a ‘Clearing and Settlement’ layer, to process the payment messages and disburse the funds. On top of this, there’s a ‘Channels’ layer, allowing users to access distributed services and functions through a variety of communications channels (e.g. APIs). The conceptual blueprint, published back in 2017, is underpinned by a set of design principles and attributes:


  • Single set of standards and rules.
  • End-to-end interoperability including APIs and a Common Credit Message (CCM).
  • Collaborative infrastructure / overlay services.
  • Secure, resilient and stable.


  • Layered approach.
  • Overlay services.
  • Support push payments.
  • Single, common Messaging standards.

Concept versus Reality

According to Pay.UK, the NPA programme will deliver the NPA Blueprint in stages. For example, it is dependent on the successful delivery of the new core clearing and settlement layer. The Bank of England is forecasting to deliver their upgraded Real-Time Gross Settlement (RTGS) system after 2021. In the meantime, incremental improvements will be delivered to the payment services from 2019, with the delivery of so called ‘overlay services such as Confirmation of Payee and Request to Pay.

From a core payments perspective, the focus is expected to be on upgrading the Faster Payments Service, given that this is where the majority of future payments growth is expected to be derived.

Pay.UK are currently running the RFP process, with a preferred supplier expected to be announced in Q2 2020. Building and Testing is planned to run from 2021 to 2022 with migration in 2023-24.

NPA: The challenge for existing and new Payment Service Providers

Given the lack of certainty around the scope, message standard and the expected 2023 delivery date, organisations might be tempted to sit and wait on the side-lines until the core infrastructure is delivered. At Form3 we don’t believe organisations can afford to do this - especially if you are one encumbered with legacy infrastructure.

  • How will your organisation transition from complex and inflexible processing platforms with dedicated payments engines, complex orchestration and multiple system interfaces?
  • How can you start to prepare and mitigate the impact of NPA when the proposed architecture is still conceptual?
  • What if you are a new challenge PSP, looking to connect to the UK Payment Infrastructure for the first time?
  • How can you avoid costly ‘throw-away integration’ before NPA is delivered?1

Interoperability and continuity of service

Form3 has already built market services that sit across the conceptual layers and our fully-cloud-native infrastructure supports a layered conceptual infrastructure.

Form3 can also help organisations manage the impact of transitioning and onboarding to NPA by providing a re-routing facility between the current (Faster Payments) and future real-time, infrastructure.

Our flexible, micro-services architecture is accessible through a single API, helping insulate clients from the ensuing scheme changes (e.g. adoption of a Comment Credit Message).

Form3 will be ready to facilitate the transition to NPA and manage PSP migration by providing additional re-routing of Faster Payments SIPs to the NPA (i.e. Smart routing between old and new gateways). The Form3 platform will promote interoperability between new and existing schemes; ensuring continuity of service and supporting phased migration.

Form3 future-proof payments processing with a social benefit

It’s difficult to know exactly how the payments landscape is going to change in the coming years with the introduction of NPA. There are, however, certain undeniable trends as businesses and consumers rapidly adopt digital methods of payments. First, the rapid adoption of real-time payments and second, richer payments data sets, insights and automation. The digital world requires real-time processing and enhanced services with richer data analytics, all served up through simple, secure and accessible APIs.

Form3 is proud to be helping organisations prepare for the advent of the New Payments Architecture and will continue to insulate them from the uncertainty both before and after roll-out. In the meantime, we will continue to help them connect to the existing infrastructures such as FPS, Bacs and CHAPS.

In 2019, we connected half of all the new UK Faster Payments participants. Although insignificant to some, it’s a little bit like Bazaalgate’s plumbing for London; an amazing sub-structure that makes modern life so much easier.

1 : "As the commencement of the NPA draws closer, we would expect a temporary slowdown in joining numbers as potential new participants wait for the new system, rather than investing in building connections to the pre-existing system.” – PSR June 2019

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Written by

Joss Wilbraham Customer Success - Enterprise Customers

Joss has an in-depth business, regulatory and technical knowledge of the payments and Financial Services landscape gained on projects over more than 20 years with Open Banking UK, the Financial Conduct Authority, Royal Bank of Scotland, Barclays, HSBC, JP Morgan Chase, Bankers Trust, Citigroup, VocaLink and Cap Gemini.