FCA set to streamline payment systems oversight

The UK government has opened a consultation on proposals to fold the Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA), a move designed to simplify oversight and strengthen the UK’s ambition of becoming a global leader in payments innovation.

Announced in March 2025 as part of the Regulatory Action Plan, the consultation outlines transferring all functions of the PSR to the FCA. This includes its role in promoting competition and innovation, overseeing payment system services, and protecting the interests of businesses and consumers.

If enacted, the consolidation would significantly reshape the UK’s regulatory landscape by reducing the number of supervisory bodies involved in payment systems oversight. The government argues this will cut complexity, improve clarity, and create a more predictable environment for compliance and growth.

The FCA has already been working in close alignment with the PSR, particularly in areas such as open banking standards and payment system reforms. By formally consolidating responsibilities into one authority, officials believe the UK can deliver greater efficiency, eliminate duplicative efforts, and set a clearer path for firms operating in the sector.

David Geale, FCA executive director for payments and digital finance and PSR managing director, welcomed the consultation, calling it an important step toward simplifying regulation. He highlighted that a unified approach will ensure a clear, proportionate, and predictable framework for the UK’s fast-evolving payments ecosystem. Geale also pointed to joint initiatives like open banking and the New Payments Vision (NPV) as examples of how integration is already helping to reduce the burden on firms.

The government has confirmed its intention to legislate for the changes when parliamentary time allows. The reform marks a pivotal moment for the UK, aligning oversight with its vision for a trusted, innovation-driven payments ecosystem that can support both domestic growth and global competitiveness.

FCAfintech regulationOpen Bankingpayments oversightpayments regulationPSRRegulatory Action PlanUK GovernmentUK payments innovation