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UK Government Seeks Feedback on Merging Payments Regulator with FCA

By  |  September 8, 2025

The UK government has launched a consultation on its proposal to fold the Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA), a move officials say will streamline oversight of the country’s payments landscape. According to a statement released Monday, the plan would shift all of the PSR’s responsibilities—including promoting competition, innovation, and safeguarding consumer interests—into the FCA’s existing framework.

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    The finance ministry said the change is designed to simplify regulatory structures, reduce duplication across agencies, and support the government’s broader growth agenda. Per a statement, having a clear and predictable framework is key to fostering competition and innovation while ensuring security in payment systems.

    Since its creation in 2015, the PSR has played a central role in opening access to payment networks, supporting Open Banking initiatives, and introducing fraud protections. Government officials emphasized they remain committed to high standards of consumer protection, noting that fraud continues to pose significant risks to both consumers and businesses. According to a statement, the integration will strengthen the UK’s ability to respond to these challenges while giving businesses more clarity and flexibility.

    To prepare for the transition, the FCA and PSR are already coordinating more closely. Per a statement, steps include establishing a new FCA executive director position for payments and digital finance, updating existing memoranda of understanding with other regulators, and working together on Open Banking projects such as variable recurring payments.

    The consultation outlines how PSR functions would be embedded into the Financial Services and Markets Act 2000 where feasible, while new provisions would be added if needed. The government said it wants to move quickly to provide certainty for regulators, firms, and consumers as the payments sector continues to evolve.

    Source: Gov UK