1.  Context: Two Animals in the Room and the PA Manifesto

The Payment Association (PA), as the primary lobbying group for the UK payments industry, has published its Payments Manifesto - Making Britain a Payments Powerhouse. This briefing frames across three actors:

• The Lion — UK Stablecoin (UKS): a disruptive, high-potential digital currency capability with transformative implications for payment rails.

• The Elephant — the status quo: incumbent payment infrastructure, vested interests, and the inertia of existing commercial models.

• The Manifesto — PA’s is generally supportive of Digital Activities, but the suggested fraud reimbursement reforms do not support fighting Financial Crime: procedural interventions that risks harming the very consumers it purports to protect.

2.  ISO 20022 and the 19-Character Problem

The New Data Standard

ISO 20022 provides a structured data framework for global high-value payment systems and cross-border transactions. It became mandatory in November 2025, replacing legacy message formats with richer, more interoperable data structures. This enables materially better fraud detection, transaction context, and cross-border operability.

The Two-Tier System

The Bank of England’s CHAPS system is fully ISO 20022 compliant. Despite a decade of discussion, the UK New Payments Architecture has not progressed, and Faster Payments does not use ISO 20022 — this gap has real consequences.

Faster Payments has not yet made the transition — and this gap has real consequences. The familiar 18-character limit in many online banking interfaces is a direct artefact of Faster Payments and Bacs legacy format constraints.

The CHAPS/Faster Payments divide creates a structural asymmetry in which structured data benefits — richer fraud signals, cross-border context, programmable compliance — accrue unevenly across the system.

The International Move to Real Time Payments

The new depth of data and the move to real time enables the existing payment systems to match the competitive nature of stablecoins in real time. The constant refreshing of data enables instant payments to be more secure and increase fraud protection since banks have more information on who is making the transactions. By banks sharing this type of data, bad actors using Mule Account Networks become clearer and who is connected to whom. It enables quick and appropriate action by the authorities with evidence-based data.

**3.  Fraud Reimbursement: The Reimbursement History **

The Shift from Voluntary to Mandated

The central battleground between the PA and regulators has been the question of liability: who bears responsibility for Authorised Push Payment (APP) scams — the bank or its customer? The Payment Systems Regulator (PSR) has rightly placed this responsibility on banks. The reimbursement trajectory tells its own story:

The progression from 20% to 87% is not a story of voluntary goodwill — it is a story of regulatory compulsion. The PA lobbied for a £25,000 reimbursement cap. The PSR originally decided on a much higher limit before reducing it to £85,000 just before the launch. This figure matched the bank deposit protection scheme of £85,000 but not linked to it. The FSCS, in Nov 2025, to £120,000 ‘ensuring consumers can feel confident their money is safe.

The industry reimbursed £173 million from October 2024 to September 2025 under the new ruling.

Prior to mandatory reimbursement, Which? research indicated that approximately 40% of APP scams were not being reported — a direct consequence of the banks’ bureaucratic claims process.

4.  Manifest: Part Attrition Design

The PA’s Proposed Police Report Requirement

The PA Manifesto 2026 proposes requiring a police report for any fraud reimbursement claim above £150. The stated rationale is claiming validation and deterrence of fabrication, given that the average fraud loss is approximately £3,200. This when only 3% of claims were rejected due to insufficient caution indicating most consumers were aware of the risk.

Report Fraud (formally known as Action Fraud) is the UK national reporting centre of fraud and cybercrime. Managed by the City of London Police.  Action Fraud’s sub-2% investigation rate means a mandatory police report is not a fraud deterrent — it is a reimbursement barrier. It shifts cost and burden onto victims while providing the industry with a procedural exit.

Why This Fails as Consumer Protection

• The cost of investigating a single fraud case is approximately £25,000.
• Time from report to trial is typically 2–3 years.
• Requiring a police report for a £150+ claim creates a compliance burden that will deter legitimate victims — particularly vulnerable consumers — from pursuing valid claims.

**5.  Stablecoins: PA Interests **

The PA’s Conditional Enthusiasm

The PA Manifesto is broadly supportive of UK stablecoins, and this is unsurprising: stablecoins are largely positive for the global banking system and the PA naturally supports what benefits its membership. However, this enthusiasm has conditions.

The Fair Commercial Models Question

WCIT, amongst other respondents, raised fundamental questions about backing asset reimbursement models and commercial frameworks for stablecoin infrastructure. The PA Manifesto’s call for ‘fair commercial models’. Here ‘fair’ probably means fair to incumbent payment processors which may or may not be extended to end users or merchants.

A2A and International Digital Wallets

The PA Manifesto also calls for A2A and international digital wallets: genuine A2A disintermediates card networks and processors. A UK Stablecoin enabling genuine Account-to-Account (A2A) payment at near-zero cost.

Multiple Digital Wallets are linked to bank accounts, debit card, credit cards allowing for contactless payments, instore and online payments via smartphone. As plus 50% UK adults use these them as support for loyalty cards, peer to peer transaction alongside security biometric authentication.

Programable activities (Smart Contracts)

The best example of Programmable contracts is the Bacs System. Created 50 years ago it is widely used and understood - easy to set up, know rules and 3-business day payment cycle. Cheques were massive with a 10-day float allowed for bank risk. Now cheques less than 1% of all payments.

Smart Contract over Distributed Ledger Technology, with regulations, can allow contracted payments of 30-days to be paid to SMEs and others on time. Despite several Government attempts, (inspired Faster Payments), the average time to payment is 58 days.

6.  Bank of England Consultation vs. PA Manifesto

What the Alignment Table Reveals

A mapping of the PA Manifesto against the BoE’s consultation work reveals a pattern: most of what the PA calls for is either already underway independently of PA lobbying or lies entirely outside the BoE’s consultation scope.

The BoE consultation is doing substantive work on systemic risk framing, the wallet provider/issuer separation, and reserve requirements. The concern is the PA manifesto is attempting add particularly on reimbursement liability and governance their client’s interests above that of the consumer in the goal of ‘Making Britain a Payment Powerhouse’.

UK Government’s National Payments Vision (NPV), November 2025, has similar aspirations. It is a three-year plan to provide a trusted, world leading payment ecosystem. To include the benefits of new technologies like tokenisation and agentic AI to drive competition in this sector. Interoperability between the various technologies and prepare for Open Finance (the new digital world).

**7.  Summary **

Stablecoin and digitalisation of all assets is a global opportunity. The currencies best placed for it, are the US Dollar, the euro, Japanese Yen, the UK pound and the Hong Kong/China Yuan/Renminbi. These currencies in their physical form are used extensively in other countries as belief in the local currency wanes.

**Next steps **

2. Bank of England to stay with its schedule of announcements for stablecoins in 2026

3. Financial Crime must be addressed now, to do so:

   2. Faster payments must start to use ISO20022 immediately
   3. PRS reimbursement to be supported without additional bureaucracy processes
   4. Agree with the PA view on Social Media Companies compliance (75% scams start)

4. NPV is great but the UK has lost a decade of activity surrounding the New Payment Architecture (NPA) now paused. Suggest gaining traction early, back small ‘doable tasks early and leave Bacs alone. Yes, it is old-fashioned architecture, has a 3-day settlement cycle but it works. Consumers have given Bacs the thumbs up - 73% direct debit volume.