UK Payments Rules Move From BNPL to B2B Invoices

The United Kingdom’s newest payments legislation has little to do with checkout buttons, digital wallets or card networks.

Instead, it targets getting paid on time, a problem that businesses have complained about for decades.

The Commercial Payments Bill introduced in Parliament late last month may prove to be one of the clearest signals that British regulators are moving toward a broader vision of payments oversight, one that increasingly stretches from supplier invoices and construction contracts to buy now, pay later (BNPL) lending, flexible payment credentials and even tokenized money.

The legislation seeks to strengthen protections against late commercial payments, establish maximum payment terms in many contracts, reinforce rights to interest on overdue invoices, expand the authority of the Small Business Commissioner and prohibit many retention clauses in construction contracts. According to the government, the proposal is designed to address persistent late-payment practices that place pressure on small businesses and suppliers.

While commercial payment terms may appear distant from consumer-facing payment innovation, regulators increasingly view them as part of the same ecosystem. In both cases, policymakers are seeking clearer accountability around the movement of money, whether funds are flowing between businesses, from consumers to merchants, or across digital platforms.

From Late Payments to Payment Choice

That philosophy is increasingly visible across the U.K.’s payments agenda.

One of the most consequential changes remains the Financial Conduct Authority’s new framework for BNPL products. FCA regulation of many third-party BNPL providers begins July 15, bringing a fast-growing payment category into a more formal supervisory structure. Firms seeking to operate under temporary permissions were required to begin engaging with the FCA ahead of implementation.

The timing is significant because consumer payment behavior has become multifaceted, and providers are responding in kind.

In May, Visa announced a U.K. partnership with Zilch and Thredd to support the Visa Flexible Credential, allowing multiple funding sources to sit behind a single credential while enabling consumers to determine how they want to pay at the point of purchase.

The development reflects a broader trend. Consumers increasingly choose payment methods according to the circumstances of a particular transaction rather than relying on a single preferred product. Installments, debit, credit and other payment options are becoming interchangeable tools used for different purposes.

Safeguarding, Stablecoins and Infrastructure

The U.K.’s regulatory agenda extends beyond consumer credit.

The FCA’s supplementary safeguarding regime for payment and eMoney firms took effect on May 7, strengthening expectations around customer fund protection, reconciliation, record-keeping and operational controls.

The new regime is more prescriptive than the framework it replaces. Payment institutions and eMoney firms must now conduct daily reconciliations of safeguarded funds, maintain enhanced records, prepare resolution packs to facilitate an orderly wind-down in the event of failure, and undergo annual safeguarding audits. The FCA has said the changes are intended to reduce the risk of customer losses and improve confidence in nonbank payment providers as they play a larger role in the movement of money across the U.K. payments ecosystem.

At the same time, the FCA’s 2026 payments priorities emphasize open banking expansion, operational resilience, financial crime controls and payment innovation, including stablecoins and tokenized payment instruments.

Meanwhile, HM Treasury is consulting on reforms designed to create a framework capable of accommodating stablecoins and tokenized deposits alongside traditional payment mechanisms. The government’s objective is to avoid fragmented regulatory treatment as new forms of digital money emerge.

Commercial payment reforms require greater visibility into payment timing and supplier obligations. Safeguarding rules demand stronger reconciliation and record-keeping. Authorized push payment (APP) fraud reimbursement rules require traceability and dispute management. Stablecoin frameworks will eventually require institutions to connect traditional payment infrastructure with new forms of digital settlement.

For infrastructure providers, the opportunity lies less in any single regulation than in the cumulative effect of them. Banks increasingly need systems capable of documenting, monitoring and governing payment activity across multiple rails, payment types and customer experiences.

Where the Rest of the Industry Is Watching

The U.K.’s approach is attracting attention because several of its initiatives are becoming reference points for regulators elsewhere.

APP fraud reimbursement has become one of the most closely watched consumer protection frameworks in global payments. Stablecoin consultations are addressing questions many jurisdictions have yet to resolve. BNPL regulation is moving toward a structure that resembles broader consumer credit oversight.

The backdrop is a consumer market that has become increasingly digital and increasingly flexible. The PYMNTS Intelligence report “Global Digital Shopping Index: UK Edition” found that consumers used mobile phones in 48% of retail purchases globally. Preferred payment methods remain among the strongest influences on merchant selection. That behavior paves a path for U.K. regulators to broaden their scope as payments become increasingly embedded across commerce, banking and digital services.