The UK government has launched a consultation on plans to integrate the PSR into the FCA, marking a significant restructuring of the payments regulatory framework.
The consultation follows a March 2025 announcement in which the government outlined its intention to consolidate the PSR within the FCA as part of its wider Regulatory Action Plan. Legislation for this transition will be introduced once Parliamentary time allows.
Under the proposals, the FCA would assume full responsibility for the PSR’s functions, which include promoting competition and innovation across payment systems and ensuring that consumer and business interests are safeguarded. The move is designed to create a more streamlined regulatory environment by reducing the number of supervisory bodies overseeing the sector.
The government believes this consolidation will simplify the regulatory landscape for firms and stakeholders while advancing its vision of a trusted, world-leading payments ecosystem. By centralising oversight, it expects to provide clarity and predictability, reduce compliance burdens and strengthen the UK’s competitiveness in global payments innovation.
Responding to the consultation, FCA executive director of payments and digital finance and PSR managing director David Geale said, “The Government’s consultation is an important next step in simplifying and clarifying payments regulation. The consolidation will ensure there is a clear, predictable and proportionate regulatory framework that supports the UK’s dynamic and fast-evolving payments landscape. We will continue to work with the Government and sector as plans for consolidation are finalised.
“We’ve already developed a more streamlined and joined up approach to payments regulation and removed some of the regulatory burden on firms, for example on our joint approach to open banking and our close partnership on delivering the NPV.”
The consultation highlights the growing importance of efficient and adaptive regulation in the payments industry, particularly as digital finance continues to evolve rapidly. Stakeholders across the sector will now have the opportunity to provide feedback on the government’s proposals before the plans are finalised.
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