UK Government Plans to Upgrade Gov.UK Pay with Open Banking

The UK government has announced a £49.2 million plan to add open banking technology to the Gov.UK Pay platform. According to the update, this will help improve digital payments across public services, making them faster and safer. The Government Digital Service (GDS) has invited payment service providers to apply for the contract.

Gov.UK Pay is widely used by public services, including local councils, police departments, and health teams. Since its launch in 2016, the platform has processed over 94 million payments for more than 1,000 services. The government said the new update will help users pay through their banks using an advanced system.

Gov.UK Pay to Get a New Payment Provider for Open Banking

The government has issued a market notice asking for a new payment service provider. The chosen provider will handle credit and debit card payments, as well as open banking transactions. The contract will last for three years, with an option to extend for two more years if needed.

The selected provider will go through a 12-month onboarding process before fully starting operations in 2026. This means that by next year, the government will begin preparing for the new payment system.

Open banking allows banks to share financial data securely with other services through APIs. In the UK, these systems follow rules set by Open Banking Ltd and the Competition and Markets Authority. The update shows that the government wants to improve digital payments using this technology.

The Crown Commercial Service had already introduced a framework for open banking services in December last year. This move was part of a wider effort to modernize payments in the public sector.

New Payment System to Use Secure APIs and Improve Public Transactions

Presently Gov.UK pay works with Worldpay for central government services and Stripe for local government payments respectively. The purpose of this update is to upgrade access and security by permitting true banks application programming interface (APIs).

The format will aid customers run smooth transactions. The government had said the new service provider must form alliance with the nine giant UK banks known as CMA9, this is to see that they come to compliance with the recent open banking standards. Which generally includes better security for transactions, offering of refunds and the ability to cancel payments by users.

The market notice explains that the new payment provider should also help resolve disputed card payments and handle identity verification using automated checks. The provider will need to ensure strong anti-money laundering (AML) processes as well.

Currently, Gov.UK Pay has handled transactions worth over £6 billion. With the new update, public services will have better tools to process payments more securely. The government believes this change will help both users and service providers manage digital transactions more effectively.