Roadmap to next steps in payments innovation and regulation
Following the National Payments Vision and the launch of the Payments Vision Delivery Committee (PVDC), last week HM Treasury (HMT) published the Payments Forward Plan, setting out a three-year roadmap for how UK payments regulation and infrastructure will develop.
The PVDC brings together the Bank of England, the Financial Conduct Authority (FCA), the Payment Systems Regulator (PSR) and HMT. The Plan builds on the 2023 Future of Payments Review and is designed to make sure retail, wholesale and digital asset reforms move forward in a joined-up way rather than as separate initiatives.
For retailers, that joined-up approach and the clearer line of sight on what’s coming next really matters. The BRC, as part of the NPVDC Engagement Group, has also helped shape the focus of the Plan.
What’s in it?
The Plan pulls together the main regulatory and infrastructure changes expected over the next few years. Relevant ones for the Finance Community include:
- Merging the PSR into the FCA, reviewing key pieces of payments legislation (such as the Payment Services Regulations and E-Money Regulations), looking at a possible cap on systemic payment system fees, and reforming the Financial Ombudsman Service.
- A HMT consultation on payments law in Q2 2026 (including Open Banking and stablecoins), an FCA engagement paper later that year, and further legislation expected between 2026 and 2028.
- Q2 2026 will see the start of a retail payments infrastructure design programme, alongside upgrades to Faster Payments and BACS by the end of 2026. The FCA will consult on new Open Banking interface rules in Q3 2026. The Competition and Markets Authority is also expected to consult on digital wallets from the first half of 2026.
- Work on a potential Digital Pound will continue through 2026, with a blueprint and decision expected from HM Treasury and the Bank of England.
- The ongoing market reviews to improve transparency around card scheme and processing fees and to review cross-border interchange fees. Strengthening domestic account-to-account options could also reduce reliance on current card schemes.
Why this matters for retailers
The plan:
- Provides clarity for when consultations and legislative changes are expected, which helps businesses plan investment and compliance activity more effectively.
- Creates a real opportunity for the adoption and acceleration of Pay by Bank as a competitor to the card schemes.
- Supports stronger competition and resilience. Greater transparency on fees, regulatory reform and infrastructure upgrades could help reduce concentration in the market and improve outcomes for merchants.
The Plan is a welcome attempt to move from fragmented reform to a more coordinated programme. Delivery will be everything. If the timelines are met and reforms move at pace, this could be a turning point for competition and innovation in UK payments. There’s a risk that if timelines slip or focus shifts, progress could stall, particularly for Pay by Bank, where potential is strong but regulatory clarity and momentum are essential.
HMT will be speaking at our in person Finance Community Horizon Scanning event on 13th May to discuss the Plan so do book your place if you have yet to do so.
