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Ecommpay has urged the Bank of England to put merchants at the centre of the design of the UK's next-generation retail payments infrastructure, arguing that merchant representation in the consultation process has so far been too limited.
The intervention follows the Bank of England's response to the Retail Payments Infrastructure Board consultation, which set out a high-level design for a new retail payments system. It proposed a single modular core using common messaging standards and noted industry support for a phased migration rather than a single switchover.
A co-creation phase is now under way, with the blueprint due to pass to an industry-led Delivery Company in the spring. Ecommpay said businesses that rely on Bacs and Direct Debit need clarity on how the transition will be managed and how the new body will be funded.
Willem Wellinghoff, Chief Compliance Officer at Ecommpay, said: "We welcome the Bank's commitment to renewing the UK's payments infrastructure, and in particular the clear support for phased migration rather than a Big Bang. For merchants, continuity matters. Businesses that depend on Bacs and Direct Debit for recurring revenue cannot afford for legacy systems to be switched off before replacements are proven. But phased must not mean open-ended. Firms need indicative milestones for the later phases, and early clarity on how the Delivery Company will be funded, because those costs will ultimately reach merchants."
Ecommpay said merchants have had too little influence over the process despite being among the groups most affected by any new payments architecture. It argued that merchants and the payment firms that serve them should have a formal role in both the co-creation work and the governance of the Delivery Company.
Wellinghoff said: "Merchants made up just 4% of consultation respondents, yet they are the ones who will need to adopt, integrate and pay for whatever comes next. Merchants, and the payment firms that serve them, need a formal seat in the co-creation work that starts this month and in the Delivery Company's governance. The questions that matter most to them - acceptance, consumer protection and commercial incentives - sit largely outside the core, and they need to be answered with the same urgency as the technical design."
Merchant priorities
Ecommpay set out three areas it said matter most for businesses using payment services. The first is account-to-account payments at the point of sale, where infrastructure changes alone will not be enough to make the model work for merchants and consumers.
Wellinghoff said: "First, account-to-account payments at the point of sale. As the Bank's response records, infrastructure alone won't deliver a viable proposition. Merchants need certainty of fate at the moment of sale, with strong customer authentication, refunds, recalls and disputes designed in from day one rather than bolted on later, under a liability model they understand. A2A doesn't need to copy cards, but consumers will expect protection that feels comparable. Without those, acceptance won't follow, however good the rails are."
The second issue is access. Ecommpay said participation in the new infrastructure should depend on a firm's risk profile, operational capability and regulatory status rather than on whether it is a bank. It also pointed to European moves to allow payment and e-money institutions direct access to payment systems.
Wellinghoff said: "Second, access. The proposed range of connectivity options and the ability to share liquidity across products are the right ideas. Access should be set by a firm's risk, capability and regulatory status, not by whether it is a bank. The EU has already opened its payment systems directly to payment and e-money institutions, and the UK should keep pace. Otherwise competition stays where it is today."
The third area is fraud prevention. Ecommpay said common standards for shared fraud data, payee checks and directories would be more effective than fragmented approaches across the market.
Wellinghoff said: "Third, fraud. Shared fraud data, payee checks and directories work best when every participant connects to them on common standards, whether they are run centrally or offered competitively. Fragmented provision creates gaps that criminals exploit."
Cross-border issues
Ecommpay also highlighted international alignment as an important issue for UK merchants selling into Europe. It said compatibility with CHAPS and ISO 20022 standards, as well as links between UK Confirmation of Payee and Europe's Verification of Payee, would shape whether cross-border payments become easier and less costly.
Wellinghoff said: "Many UK merchants also sell into Europe, so alignment with CHAPS and international ISO 20022 standards isn't a technical footnote. It decides whether cross-border payments get simpler or stay expensive. Building one-leg-out capability into the core, and making UK Confirmation of Payee work with Europe's new Verification of Payee, would make the UK a natural hub for international payments."
Ecommpay also said the new design should take account of emerging uses of artificial intelligence in commerce. It argued that payment systems may need to distinguish between identity, authority and customer intent if software agents begin buying goods and services on behalf of consumers.
Wellinghoff said: "Finally, the design needs to look beyond today's payments. As AI agents start to buy on customers' behalf, merchants will need to know not only who is paying, but whether the agent had authority and the customer intended the purchase. Building that distinction between identity, authority and intent into the rails now will cost far less than retrofitting it later. As an inclusive payments platform, we will judge success by whether the new rails cut the cost of accepting payments for the smallest businesses, not just the largest."
Ecommpay also backed a broader industry call for an infrastructure model that is open to competition, interoperable, and delivered safely and economically.
Wellinghoff said: "We support The Payments Association's call for a core that is future-proof, open to competition, focused, genuinely interoperable and delivered safely and economically. We look forward to playing our part in the co-creation phase alongside the rest of the industry."