Who are Pay.UK and what do they do?

As a reader of Payments:Unpacked you will know that payment systems are vital to the UK economy and play a remarkable role in ensuring that payment for the goods and services we all consume are efficient, safe, resilient and friction-free.

On its website home page the UK’s payment system regulator states:

Every time anyone uses a cash machine, transfers money, uses contactless, or gets paid, they use a payment system. 

Payment Systems Regulator

In this context I am often asked ‘who are Pay.UK and what do they do?” – sometimes I think that the person asking the question ought to know the answer(!) but sometimes someone who has more recently appeared on the ‘payments scene’ has, not surprisingly, got a little bit confused.

So, using publicly available information sources, here’s a quick briefing:

Who are Pay.UK?

Pay.UK is the recognised operator and standards body for the UK’s retail interbank payment systems. Pay.UK provide the digital payments networks used by the UK’s banks, building societies, other payment providers and all of their customers to make payments, ensuring they are secure, safe and simple to use.

Pay.UK was created in July 2017 (as the New Payment System Operator) and launched as Pay.UK in 2018, bringing the three national retail payment schemes – the Bacs Payment System, the Faster Payment System and the Cheque and Credit Clearing Company (now the Image Clearing System) – together, into a single, consolidated operation.

This act fulfilled a key Payments Strategy Forum recommendation: for the UK to have one retail interbank payment system operator.

What does Pay.UK do?

The core payment systems that Pay.UK operate are:


Bacs is the bulk system for high volume, regular interbank retail payments.

Direct Debit is the payment option chosen by thousands of companies to automatically and securely collect important payments, from millions of people and organisations. The Direct Debit Guarantee offered by Bacs is a unique end user benefit.

Bacs Direct Credit is used to pay eight in ten employees in the UK, whether that is wages, salaries, or benefits, as well as for settling business-to-business invoices.

The Bacs clearing cycle operates over a three day cycle2 and the maximum payment limit is £20m.3

In its fifty-first year (2021) Direct Debit experienced a new record with 4.6 billion transactions processed by the Bacs Payment System (2020: 4.5 billion transactions), a year-on-year increase of 2%. 

In total, Bacs Debit and Credit processed 6.5 billion transactions, £5 trillion in value.

Faster Payments

Faster Payment enables payments to be made in near real time.

Faster Payment is a near real-time system, with near real time confirmation to sender, and immediate funds availability.

The credit is normally posted to the beneficiary’s account within seconds and there is a maximum payment limit of £1m.4

The Faster Payment System continues to set new volume and value records. In 2021, Pay.UK processed 3.4 billion transactions, a 17% increase on 2020, with a value of £2.6 trillion (2020: £2.1 trillion).

Image Clearing System

Image Clearing enables images of cheques to be exchanged for clearing and payment.

The introduction of the Image Clearing Service has significantly improved clearing process times following the closure of the previous Paper Clearing System in 2019.

If a customer pays in a cheque on a weekday (before their bank or building society’s advertised cut-off time) they will be able to withdraw the funds by 23:59 on the next working day. There is not a maximum payment limit for cheques.5

The Image Clearing System processed just 158 million items in 2021 (2020: 195 million items), including 153 million cheques (2020: 188 million cheques). 

The continued decrease in cheque usage to an extent has been driven by end users migrating to alternative automated payment systems.

Pay.UK in numbers

Source: Pay.UK

In 2021 Pay.UK delivered operational availability at more than 99.9% and processed more than 10 billion retail payments with a value of just under £7.9 trillion. 

This represented a volume rise of 6.2% and a value rise of 9.3% from 2020. In 2021 Pay.UK saw significant growth in Faster Payments with transaction numbers reaching 3.4 billion payments, worth almost £2.6 trillion. 

Five new customers joined Faster Payments in 2021 taking the number of directly connected customers to 38 for Faster Payments, 27 for Bacs and 20 for Cheques (Image Clearing System). 

  • Each month Northey Point publishes a round up of the volumes and values processed across the payment systems operated by Pay.UK: Payments Tracker.

Robustness and resilience

In 2021 the Faster Payments Service maintained 100% uptime. 

Bacs remained at 100% apart from an incident in July which reduced that months uptime to 99.97%. 

ICS remained at 100% apart from an incident in August which reduced that months uptime to 99.21%.

Accessible and available

Source: Pay.UK

Despite growth in previous years, direct customer numbers on Bacs and the Image Clearing Service remained unchanged during 2021.

The Faster Payment Service grew to 38 direct participants with five new joiners and two customers off-boarding in 2021.

Overlay Services 

Pay.UK also oversees the creation of rules and standards for new overlay services that help realise increased benefits for end-users and, importantly, act as a catalyst for greater and wider innovation.

These services currently include Confirmation of Payee, which lets payers check who they are paying before they confirm the transaction, and Request to Pay, a messaging service that has been created to complement existing payments infrastructure and gives billers the ability to request payment for a bill rather than simply sending an invoice.

Request to Pay

The rules and standards for the Request to Pay framework were launched in 2020, in close collaboration with the industry. Request to Pay is an innovative and flexible way to settle bills between people, organisations and businesses. 

It is a standard messaging service that gives billers the ability to request a payment rather than sending an invoice, and gives end users different options to pay – in full, in part, ask for more time, communicate with the biller, or decline to pay – without changing their legal obligations. 

Technical and service providers are now part of the Request to Pay ecosystem and more organisations are set to join the framework in 2022. 

Pay.UK work in consultation with consumers, banks, fintechs and utility companies to further develop the service, including Interactive Advance Notification (IAN) to support the Direct Debit experience that was well-received by industry. 

Pay.UK have stated that they are encouraged to see increased industry press coverage of the merits of Request to Pay and the growth and adoption of the ecosystem.

Request to Pay: As millions of Britons struggle with their bills its time to act.

Confirmation of Payee

Confirmation of Payee was the first new strategic service delivered by the NPA programme. 

Confirmation of Payee is a name-checking service for UK-based payments, designed to help reduce misdirected payments and certain types of fraud. It gives payers greater assurance that their payments are being sent to the intended recipient and not accidentally or deliberately misdirected.

Since its launch in 2020, more than 35 payment providers have signed up and implemented Confirmation of Payee, with more signing up through 2022.

In 2021 close to 500 million Confirmation of Payee checks were successfully made, covering over 95% of applicable Faster Payment volumes (2020: one million Confirmation of Payee checks, covering 90% of applicable Faster Payment volumes). 

In 2021, Pay.UK launched a new phase of Confirmation of Payee (Phase 2) to expand the eligibility, such that all account holding payment providers can join the service.

Current Account Switch Service (CASS)

Forty-seven participating brands (2020: 49 participating brands) use the service, covering 99% of the market (2020: 99%). 

Consumers and businesses switched over 782,000 current accounts in 2021 (2020: over 700,000), taking the total number of switches to 7.8 million since the Current Account Switch Service (CASS) launched in September 2013. 

The service has also successfully redirected more than 117 million payments since inception.

CASS has achieved its customer satisfaction and awareness Key Performance Indicators (KPIs) in 2021 as well as the seven day switch completion rate. 

Overall customer satisfaction with CASS in 2021 was 92% (2020: 92%) with overall customer awareness of the service for the year reported as 76% (2020: 79%) and 99.8% of all switches were completed within seven days (2020: 99.5%). 

These outcomes are higher than the CASS’ KPI target of 90%, 75% and 99% respectively. 

The service ran two advertising campaigns in 2021, with both campaigns exceeding the 90% reach target (2020: 90%+)

  • Each quarter Northey Point publishes a round up of the current account winners and losers plus performance data on the operation of the Current Account Switching Service: CASS Tracker.

Cash ISA Transfer Service

The Cash ISA Transfer Service automates the communication between the two financial organisations (new and old) involved in a Cash ISA transfer.

Seventy-five participating brands use the electronic Cash ISA transfer service, covering 93% of ISA transfer volume across the industry (2020: 92 %). Consumers transferred over 330,000 ISAs in 2021 (2020: 350,000), taking the total number of transfers to 5.4 million since the Service launched in October 2012. 

The service continues to perform strongly against the 15 working day industry SLA, achieving an average completion time of 5.5 days (2020: 6 days).


The UK’s mobile payment service has been operating since 2014, and provides end users with the ability to make a payment without needing the recipient’s account number or sort code.

In 2021 £413 million transferred (2020: £451 million). Although Payment volumes decreased 10% year-on-year to 9.4 million transactions in 2021 (2020: 10.4 million transactions), the cumulative value sent across the Paym service since its launch amounts to £2.3 billion (2020: £1.879 billion). The number of registered users now totals nearly 5.7 million (2020: 5.8 million).

Universal Trust Service Provider (UTSP)

UTSP provides cost-effective public key infrastructure services, a set of rules and policies enabling digital certification and encryption, to UK banks and financial institutions that want to join the Faster Payment System and the Bacs Payment System.

UTSP had a 12% year-on-year increase in certificate users in 2021 and continued to provide certificates to Pay.UK overlay services, such as Request to Pay. 

Since it was introduced, UTSP has helped more than 20 customers securely access the central infrastructure, with more expected to join by the end of 2022.

How do Pay.UK generate their revenue?

Source: Pay.UK

Pay.UK’s revenue is principally from per-transaction it charges for the payment systems they operate, with additional revenue streams from ancillary services. 

Prices are set annually to ensure the costs to operate the services are recovered and funding secured to ensure service resilience and invest in Pay.UK’s strategy, including NPA.

Retained earnings grew to £47.1 million (2020: £35.5 million), helping to ensure that investment in existing services and NPA can be further increased in 2022.


Pay.UK’s costs rose by 18% to £138.0 million (2020: £116.5 million). This increase was principally driven by increased investment in the NPA programme and in the resilience of Pay.UK and the payment systems as they seek to meet the needs of a changing and more complex ecosystem. 

Costs from Pay.UK’s central infrastructure provider, Vocalink, increased as volumes grew. Delivering value to customers and end users is a key priority and, to this end, Pay.UK have signed a new contract with Vocalink, for Faster Payments and Bacs. The revised contract allows for increased capacity whilst reducing the cost impact of volume growth and enabling a smoother transition to the NPA services.

Retained earnings grew to £47.1 million (2020: £35.5 million), bringing total equity to £51.5 million (2020: £40.0 million), helping to ensure that investment in existing services and NPA can be further increased in 2022. 

Pay.UK report that strong cash flow ensured that £10.8 million of advances from customers received as Pay.UK was set up in 2018 could be repaid.

In 2021 Pay.UK’s revenue increased by 5% to £152.0 million as transaction volumes grew for the core services by 5%.

Who regulates Pay.UK?

As the recognised operator and standards body for the UK’s interbank retail payment systems, Pay.UK are supervised by the Bank of England’s Financial Market Infrastructure Directorate (FMID) and regulated by the Payment Systems Regulator (PSR).

How do Pay.UK engage with stakeholders?

Pau.UK’s work touches a broad spectrum of stakeholders, from the customers that use the systems they operate, individuals and businesses who make and receive payments, to policy makers, regulators, consumer and trade representatives, and the wider payments ecosystem.

At a high level Pay.UK’s stakeholder engagement model is via:

  • Participant Advisory Council
  • End User Advisory Council 
  • Strategic Participant Group
  • Participant Engagement Forum
  • Interaction with Guarantors

What governance model do Pay.UK have?

Pay.UK is a Company limited by guarantee. 

There are currently 42 guarantors, drawn from a broad range of banks, fintechs and payment service providers.

The composition of Pay.UK’s board is:

  • Chair
  • CEO
  • Deputy CEO
  • Senior Independent Director
  • Independent Non-Executive Director x 4
  • Non-Executive Director x 3

Supporting the Board Pay.UK operate the following committees:

  • Audit Committee
  • Nomination Committee
  • Remuneration Committee
  • Risk Committee

How do I find out more about Pay.UK?

The obvious answer is to visit Pay.UK’s website.

Alternatively why not book a place on the next Payments:Unpacked Payment System Operator briefing? 

To receive details on the next briefing email: PSOBriefing.

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