In March 2025, the government announced that it will consolidate the Payment Systems Regulator (PSR) primarily within the Financial Conduct Authority (FCA) as part of the Regulatory Action Plan.
The government has now published a consultation paper which sets out proposals for integrating the functions of the PSR entirely within the FCA. This will see the FCA take on the PSR’s responsibilities, including for promoting competition and innovation in payment systems and the services provided by payment systems, as well as supporting the interests of consumers and businesses.
The proposed consolidation seeks to deliver a more streamlined regulatory environment for payment systems by reducing the number of regulatory bodies, simplifying the regulatory landscape for firms and stakeholders as part of the delivery of the government’s vision for a trusted and world-leading payments ecosystem.
Ahead of transitioning to a new streamlined framework, the PSR and FCA are already making arrangements to ensure operational readiness for implementing the integration. This includes:
- Creating a new FCA Executive Director role for Payments and Digital Finance that includes responsibility for both FCA Payments and as Managing Director of the PSR.
- Updating the Memorandum of Understanding between the PSR, FCA, Bank of England and PRA required under section 99 of the Financial Services (Banking Reform) Act 2013 (FSBRA 2013) to enhance co-ordination and support even closer working.
- Jointly progressing Open Banking, including by establishing a joint steering Group to drive forward the work on variable recurring payments, supporting pace and clarity.
- Working together with the Bank of England and HM Treasury through the Payments Vision Delivery Committee to drive delivery of the government’s National Payments Vision.
- Undertaking joint stakeholder engagement to support coherence and ensure stakeholders get clear, joined-up messages.
- Building closer joint working on horizon-scanning to support forward-looking priorities, and creating joint project teams on areas of mutual interest to bring together perspectives across the authorities.
Responding to today’s launch of the consultation, David Geale – FCA, Executive Director, Payments and Digital Finance and Payment Systems Regulator (PSR) Managing Director – said:
‘The Government’s consultation is an important next step in simplifying and clarifying payments regulation. The consolidation will ensure there is a clear, predictable and proportionate regulatory framework that supports the UK’s dynamic and fast-evolving payments landscape. We will continue to work with the Government and sector as plans for consolidation are finalised.
We’ve already developed a more streamlined and joined-up approach to payments regulation and removed some of the regulatory burden on firms, for example, on our joint approach to open banking and our close partnership on delivering the NPV.’
The consultation documents can be found on HM Treasury’s website, at https://www.gov.uk/government/consultations/a-streamlined-approach-to-payment-systems-regulation-consultation
The deadline for responses is 20 October 2025.
