The UK Government announced on March 11, 2025, that the Payment Systems Regulator (PSR) will be abolished, with all regulatory functions consolidated into the Financial Conduct Authority by the end of 2026. The decision follows the November 2024 National Payments Vision.
Rationale
The consolidation aims to reduce complexity for firms currently dealing with three overlapping regulators (BoE for financial stability, FCA for conduct, PSR for payment systems). HM Treasury launched a formal consultation on implementation details in September 2025, which closed in October.
NPA Cancelled, Replaced by IIR
In parallel, Pay.UK formally cancelled the New Payments Architecture (NPA) procurement - the UK's flagship infrastructure modernization project for nearly a decade. The PSR revoked its regulatory directions mandating NPA delivery (Specific Directions 2 and 2a) in May 2025. The program was renamed Interbank Infrastructure Renewal (IIR), shifting from a single monolithic procurement to a modular, iterative approach.
What This Means
Every regulated payment system and PSP in the UK will shift from PSR to FCA oversight. The NPA cancellation and IIR reboot means UK payment infrastructure modernization is effectively restarting. For payments professionals, regulatory engagement should shift to FCA teams, and infrastructure planning should track IIR developments rather than legacy NPA timelines. The PSR continues operating with full statutory powers until legislation is enacted.
Sources: HM Treasury, BoE MoU