The Labour government’s ambitious pledge to transform the UK’s payments landscape has been criticised by industry leaders, who claim the changes amount to a “reshuffle rather than reform.”
According to City AM, Chancellor Rachel Reeves outlined the government’s National Payments Vision (NPV) during her 2024 Mansion House address, describing it as a plan for “decisive action to progress open banking and support our FinTech businesses.”
However, the Payments Association – the main industry body representing the payments sector – has warned that the proposals lack the fundamental reform needed to drive innovation and economic growth.
A central element of Labour’s plan was the decision to abolish the Payment Systems Regulator (PSR), which was first established in 2013. Reeves said the move would “free businesses” from the “stranglehold” of excessive regulation. The government announced that the PSR’s responsibilities would be absorbed by the Financial Conduct Authority (FCA), as part of efforts to streamline oversight and simplify regulatory structures.
Yet, the Payments Association cautioned that the new framework risks replicating the same issues under a different structure. Payments Association director of policy and government relations Riccardo Tordera-Ricchi said that while the decision to axe the PSR was broadly welcomed, the consolidation could create uncertainty. “The same problems under a different roof,” he warned, noting that the move may fail to address existing inefficiencies.
Downing Street said the PSR would “mainly be consolidated” into the FCA’s remit, but the industry body has called for stronger checks and clearer definitions of authority between the FCA and the Bank of England. Tordera-Ricchi said the sector currently faces “ambiguity around the respective roles and responsibilities of the FCA and the Bank of England” and urged the government to ensure these are “clearly defined and communicated.”
He also highlighted that “concerns remain about who will have clear responsibility for competition oversight in the payments market,” urging the government to outline a precise accountability framework.
The Payments Association is also pressing for a “robust post-implementation review” 12 months after the overhaul takes effect. The goal would be to assess whether the changes have truly delivered on their promises of growth, regulatory clarity, and reduced burden for firms operating in the payments space.
Meanwhile, Business Secretary Peter Kyle reaffirmed Labour’s broader deregulatory stance, pledging to cut regulatory burdens by 25%. He said there were “absurdities” across multiple watchdogs that required simplification to support economic growth.
Despite Labour’s assurances of a streamlined and innovation-friendly regulatory landscape, industry leaders appear sceptical that the new framework will deliver the sweeping reform the sector had hoped for.
Keep up with all the latest RegTech news here
Copyright © 2025 RegTech Analyst
Copyright © 2018 RegTech Analyst
