HM Treasury published its formal consultation response on 21 April 2026, confirming the abolition of the Payment Systems Regulator. All PSR functions will transfer to the Financial Conduct Authority. This includes oversight of the Faster Payments system, BACS, and CHAPS.
The accompanying payments modernisation package integrates e-money and payment services regulation into a single framework. Stablecoins used for payments will be regulated under a new issuance regime. The Treasury is exploring how payment regulation should adapt to AI-agent-initiated transactions.
The FCA will receive new statutory powers for Open Banking regulation. Chris Woolard has been appointed as the government's Wholesale Markets Digital Champion. Enabling legislation is expected in a future parliamentary session.
Update (2026-10-26): The Payment Systems Regulator published consultation paper CP26/3, Regulatory framework for access to payment systems, on 15 October 2026. Responses are due by 5pm on Thursday 10 December 2026.
The consultation proposes a single access regime. The PSR says it aims to simplify the existing regulatory framework as part of the regulator's abolition, by removing overlap and fragmentation across the various regulatory requirements that govern access to payment systems. HM Treasury plans to repeal the payment system access regime in the Payment Services Regulations 2017. The consultation assumes that repeal goes ahead as planned, and that the PSR's functions, including its access to payments powers, transfer substantively to the FCA under the planned abolition.
Alongside a consultation document explaining the context behind the formation of the single access regime, the PSR has published a proposed revised General Direction 2 (GD2), a proposed single, revised piece of guidance governing access, and a proposed revised template for the GD2 compliance report.
The PSR says the consultation is relevant to operators of regulated payment systems, to payment service providers that have or seek direct access to payment systems, to payment service providers that provide, have or seek indirect access, and to trade bodies and other organisations representing payment system participants.