UK Government Swaps Stripe for Adyen in Major GOV.UK Pay Overhaul
Table of Contents
A Strategic Shift in Public Sector Payments
The UK’s Government Digital Service (GDS) is fundamentally altering the plumbing of its digital payment infrastructure. In a move that signals a shift toward open banking and diversified processing, the GDS has selected Dutch payments giant Adyen to replace Stripe as the processor for a significant portion of the GOV.UK Pay service.
The transition isn’t a total wipeout of existing systems but a targeted migration. Adyen will now handle card payments and ‘pay by bank’ services specifically for local authorities, police forces, and armed forces units. The deal is structured as a three-year contract with a maximum value of £25.3 million, though initial tender notices from February 2025 suggested the potential ceiling could have reached £49 million depending on transaction volumes.
While the financial scope of the contract covers roughly 17 percent of total payments processed through GOV.UK Pay, its operational footprint is massive. Adyen is now responsible for the payment gateways of over 70 percent of the organizations using the service. This includes a diverse array of public entities, ranging from small-scale operations like the 1079 (Tiverton) Squadron RAF Air Cadets to larger municipal bodies like the Yeovil Town Council.
The Move Toward Open Banking
The most significant technical gain from this migration is the integration of ‘pay by bank.’ Unlike traditional card transactions, which rely on the legacy rails of Visa or Mastercard and involve manually entering long strings of digits, ‘pay by bank’ leverages Open Banking APIs to move funds directly between accounts.
For the end-user, this reduces friction and eliminates the need for physical cards. For the government, it potentially reduces the transaction fees associated with card schemes and provides a more secure, authenticated method of payment. This aligns with a broader UK trend of pushing Open Banking into the mainstream to challenge the dominance of traditional credit and debit card networks.
Alan Maddrell, a senior content designer for the service, noted in a June 2nd announcement that the migration of approximately 1,000 services would be designed to be as seamless as possible. Maddrell emphasized that while the backend provider is changing, there would be “no discernible difference for paying users and no loss in functionality,” provided that Know Your Customer (KYC) legislation is satisfied to prevent fraud during the handover.
Fragmented Infrastructure: Why WorldPay Stays
Interestingly, the GDS is not putting all its eggs in one basket. The government will continue to utilize WorldPay to process payments for central government departments, linked organizations, and NHS bodies. This fragmented approach suggests a risk-mitigation strategy; by splitting the processing between Adyen and WorldPay, the UK government avoids a single point of failure that could freeze payments across the entire public sector.
GOV.UK Pay was originally conceptualized as a way to standardize the payment experience across thousands of disparate public services. By providing a centralized gateway, the GDS removes the burden from local councils or police forces of having to negotiate their own contracts with banks or payment processors. The GDS simply passes through the transaction fees, acting as a managed service layer.
The scale of the operation is substantial. Since its inception in 2016, GOV.UK Pay has processed roughly 137.5 million transactions, totaling approximately £9.2 billion. Currently, the platform supports 1,718 distinct services, including 662 dedicated to local government and 256 for police forces. As the system evolves, the shift toward Adyen and Open Banking reflects a wider effort to modernize the state’s financial interactions with its citizens.
