The UK government has launched a consultation on plans to fold the PSR into the FCA, as part of its broader Regulatory Action Plan.
The move, announced in March 2025, aims to streamline oversight of payment systems, reduce complexity for firms and bolster the UK’s ambition of becoming a global leader in payments innovation.
The consultation sets out proposals for transferring all functions of the PSR to the FCA. This would include responsibilities for promoting competition and innovation in payment systems, overseeing the services provided by them, and safeguarding the interests of both businesses and consumers.
If implemented, the changes would significantly reshape the regulatory landscape by cutting the number of supervisory bodies involved in payments oversight. The government believes the shift will simplify the environment for stakeholders and create a more predictable framework for compliance and growth.
The FCA has already been working closely with the PSR on a joint approach to payment oversight, including in the development of open banking standards. By consolidating the functions into one authority, the government hopes to accelerate efficiency and provide firms with greater clarity on regulatory expectations.
Responding to the launch of the consultation, FCA executive director for 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 government intends to legislate for the change once Parliamentary time allows, marking a pivotal step towards aligning its payments oversight with the vision for a trusted, world-leading ecosystem.
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