UK’s FCA Says Payments Innovation Is Among Its Regulatory Priorities in 2026

The United Kingdom’s Financial Conduct Authority (FCA) plans to encourage innovation in payments this year by supporting the expansion of open banking, modernizing payments regulation, and exploring stablecoins and other tokenized payment instruments.

“We expect the payments sector to continue developing, driven by innovations that have the potential to boost growth and competition,” the regulator said in an annual report covering its priorities for the payments sector. “We want to support this growth and ensure it delivers good outcomes for consumers and markets.”

This is one of four priorities highlighted in the FCA report, “Regulatory Priorities: Payments,” which was released Wednesday (March 25).

A second FCA priority in 2026 is ensuring firms implement the Consumer Duty, which lays out consumer protection rules that financial services firms must follow. The regulator plans to continue to engage with firms about their obligations, identify gaps in compliance and take action against firms that fail to address those gaps.

“We’ve seen improvements, but there are still instances where firms are not acting to deliver good outcomes for retail consumers,” FCA said in the report. “For example, we recently found that firms could be more transparent about the cost of international money remittance and cross-border payments.”

FCA will also prioritize protection of the integrity of the financial system, according to the report. It will do so by assessing firms’ practices around financial crime and operational resilience, taking action against any that consistently fail to meet standards, fighting financial crime and enhancing its operational resilience framework.

“We’ve been encouraged by some firms significantly enhancing their governance, oversight, and systems and controls relating to financial crime and operational resilience,” FCA said in the report. “However, weaknesses in this area still pose risks to market integrity.”

A fourth FCA priority this year is keeping customers’ money safe, per the report. To do so, the regulator will continue to assess firms’ practices around financial resilience and safeguarding, take action against those that consistently fail to meet standards, and implement its new Safeguarding Supplementary Regime, which will come into force on May 7.

“We’ve introduced new safeguarding rules in response to weaknesses across the sector and we expect firms to be ready to implement them,” the FCA said in the report.

The FCA said in October 2025 that payment service providers and online platforms have roles to play in combating romance fraud.

In August 2025, the regulator warned consumers about an impersonation scam in which fraudsters pretend to be from the FCA to trick people into turning over money.

Regulatory Priorities: Payments is the last of nine annual Regulatory Priorities reports the FCA will provide in 2026, covering different sectors. Reports published earlier this year covered insurance, consumer investments, pensions, retail banking, mortgages, consumer finance, wholesale buy side and wholesale markets.

These reports are new and replace more than 40 portfolio letters, David Geale, executive director of payments and digital finance at FCA, and Matthew Long, director of payments and digital assets at FCA, wrote in the report covering payments.

“They should act as a guide for firms’ boards and chief executives,” they wrote. “You should read these reports carefully, review the priorities within them — and act where you need to.”