PS25/7: Decision to revoke Specific Direction 2 and 2a

We have published our decision to revoke Specific Direction 2 (SD2) and Specific Direction 2a (SD2a). We have given a Specific Direction to Pay.UK to that effect which will come into force on 27 August 2025.

We have also published our decision to revoke Specific Direction 4 (SD4) and Specific Direction 4a (SD4a). We have given a Specific Direction to LINK to that effect which will come into force on 25 August 2025.

Background

In May 2025, we published our decision to revoke Specific Direction 3 (SD3), which required that all central infrastructure for Faster Payments in place on or after 1 July 2026 was provided under a contract that was the result of competitive procurement. This decision aimed to provide the necessary space and certainty for work to deliver the National Payments Vision (NPV), overseen by the Payments Vision Delivery Committee (PVDC).  

As part of this work, the NPV tasked the PSR and the Bank of England with assessing the requirements for retail payments infrastructure, and strengthening the governance and funding arrangements needed to deliver this.  

During the SD3 consultation, some respondents proposed reviewing, and potentially revoking, Specific Direction 2 (SD2). SD2 requires all central infrastructure for Bacs to be competitively procured, but with no deadline yet set by the PSR. Our initial view was that our reasons for revoking SD3 could also apply to SD2, particularly that doing so could provide the necessary space and certainty for work to deliver the NPV.  We therefore consulted on the revocation of SD2 (and SD2a).  

SD2 Consultation outcome and decision to revoke SD2 (and SD2a) 

We received seven responses to the consultation on the revocation of SD2 (and SD2a). All responses agreed with our proposal, in particular that the rationale for revoking SD3 also applies to SD2 (and SD2a).  

After having reviewed all consultation responses, we have decided to revoke SD2 (and SD2a).  

The PVDC has now published an update on the approach to the development and delivery of the UK’s retail payments infrastructure needs, which includes a new governance model. The PVDC will publish its strategy for retail payments infrastructure in Autumn 2025, followed by the Payments Forward Plan (a sequenced plan of initiatives) by the end of 2025. In this context, the revocation of SD2 ensures that there is space and flexibility for the NPV outcomes to materialise unencumbered by legal obligations in SD2. 

Next steps  

We will continue to monitor Pay.UK’s work and adapt our supervisory approach as appropriate. As part of this work, we and the Bank of England will maintain close regulatory oversight of Pay.UK before it extends the current Bacs contract with the incumbent supplier. 

The Bank of England will also establish the Retail Payments Infrastructure Board (RPIB) and support the setting up of the industry-led Delivery Company. Alongside the new model announced by PVDC, the authorities will seek to continue to make progress to deliver strong outcomes in the short term. There is ongoing work on short-term infrastructure enhancements, with the authorities, Pay.UK and industry partners working closely to explore options around design and delivery.