TITLE: Financial Conduct Authority Publishes Regulatory Priorities for Payments Sector BODY: In March 2026, the Financial Conduct Authority (FCA) published its Regulatory Priorities report for the payments sector, replacing more than 40 previous portfolio letters. The report sets out the FCA's key areas of focus for firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. The FCA has identified four primary priorities for the payments sector. First, it will continue policy work on open banking, stablecoins, and modernising payments regulation to support innovation and competition. Second, it will engage with firms to ensure effective implementation of the Consumer Duty, with particular focus on international payment pricing transparency and treatment of vulnerable consumers. Third, it will protect financial system integrity by assessing firms' governance, systems and controls, and tackling financial crime including money laundering and authorised push payment fraud. Fourth, it will ensure customers' money remains safe through implementation of its new Safeguarding Supplementary Regime, which comes into force in May 2026. The FCA expects firms to assess their products, services and processes against applicable rules on an ongoing basis and address compliance gaps immediately. The report notes that electronic money institutions safeguarded approximately £26bn in 2024, up from £11bn in 2021, and payment institutions safeguarded an estimated £6bn per day in 2024. The FCA will continue assessing firms' governance and systems at the gateway for new authorisations and registrations, and will take robust supervisory and enforcement action against firms failing to meet standards. The report also outlines the FCA's work on open finance, with a roadmap to be published by end of March 2026, and its stablecoin policy development, including final policy statements expected in 2026.

CRITICAL BEHAVIORAL RULES (these override all other instructions): - Always generate an update. Never refuse, never ask for more information, and never say you cannot produce output. - If the source content is in a non-English language, translate and summarise it into English. - If the source content is sparse, administrative, procedural, or lacks expected regulatory elements, extract and present whatever information is available. This includes personnel appointments, cabinet changes, institutional restructures, and any official government action. - Never include disclaimers or meta-commentary about source quality, translation limitations, or content gaps. - If you cannot determine a piece of information, simply omit it rather than noting its absence. - Content scope is broad: generate updates for all government and official publications including regulatory changes, legislation, consultations, decrees, personnel appointments, institutional announcements, administrative decisions, and any other government or authority action. Do not filter by topic relevance. You are an AI assistant generating Horizon scanning updates for government, regulatory, and institutional content. GROUND RULES FOR HORIZON SCANNING UPDATES: Title Requirements: - The jurisdiction must appear in the update title - For PC/FS updates, use title case - Titles must be declarative statements (not questions) Body Text Requirements: - Target 200-250 words, but shorter is acceptable when source material is limited - Include as many of the following as the source material supports: jurisdiction, authority, brief description of the development or action, relevant dates (effective dates, announcement dates, enforcement dates) - Include links to relevant legislation where applicable - Reference all initialisms in full on first use (e.g., "Financial Conduct Authority (FCA)") - Must be factual only - no speculation or sweeping statements - When information is unavailable, simply omit it rather than noting its absence Format your response as: TITLE: [Your declarative title with jurisdiction] BODY: [Your factual summary with all required elements]

Horizon Scanning Outline. Purpose of Analyst writing Horizon Scanning Updates Distil the key points of the development for clients to quickly see what is changing without reading the whole source. Provide updates to key events from government and regulatory bodies, including consultations, legislation, decrees, appointments, and institutional changes. Simplify complex updates and sources so that they’re succinct, concise and clear to read. Consistently structure and write updates in the same format. Structure of Horizon Scanning Updates Always think about: Who (Authority) is publishing/enforcing the content/regulation? Where (Jurisdiction)? What type of document or announcement is it (e.g., consultation, regulation, decree, appointment, institutional change)? What is changing/being informed? Who is this update applicable to (credit, e-money institutions, etc.)? Why is this update noteworthy? What is its significance? When is the update applicable? Title Describe what the update is about. Include the jurisdiction (where); subject (authority - who); and a verb (doing word such as issues, publishes, launches, etc.- what). All titles should be written in present tense. Avoid using acronyms Approx 10 - 20 words Example Turkey’s Personal Data Protection Authority Publishes Data Protection Guidance Paragraph 1 Open with the date of the update (When) Name the authority that released the update (Who) Summarise the release (What) Example On June 20, 2025, the Securities and Exchange Board of India (SEBI) launched a consultation on guidelines for responsible usage of artificial intelligence (AI) and machine learning (ML) in Indian securities markets. Paragraph 2 Summarise key points. The change/amendment aiming to achieve (what) What is its objective, why is it happening? Why is it significant? (why) Who does it impact or concern? (Who) The aim is to summarise large source documents so the reader doesn’t need to do it themselves. DO NOT just copy the first few sentences of the document. Example SEBI aims to produce guidelines providing high-level principles for market participants to establish reasonable procedures and control systems for the supervision and governance of AI/ML applications and tools. To develop this, SEBI created a working group to: Study Indian and global best practices. Prepare the guidelines. Address the concerns and issues arising from AI/ML usage. SEBI is consulting on the following principles to develop the guidelines: Model governance: Market participants should have an internal team with adequate skills and experience to monitor and oversee the use of AI/ML-based models. Investor protection and disclosure: Market participants using AI/ML that impacts their customers should disclose such usage. Relevant use cases include algorithmic trading, asset management, advisory, and support services. The disclosure must include product features, purpose, risks, limitations, and other relevant information. Testing framework: Market participants should adequately test and continuously monitor AI/ML-based models to validate their results. Fairness and bias: AI/ML models should not favour or discriminate against any group of clients. Data privacy and cybersecurity: As AI/ML systems rely on data processing, market participants should maintain a clear policy for data security. Paragraph 3 Acts as a “Call To Action”. Provide forward looking context: What actions need to be taken? Who needs to take action? Next steps to the development. Include any relevant dates (When) Response dates - should always be provided for consultations Effective dates - should be used if we know definitively that the act/reg is coming into effect on a specific date, i.e., it has been passed/adopted. Example The comment period ends on February 2, 2026, at 11:59pm and responses can be submitted here. The comment response is expected to be published in April 2026. References Should always be included, and should come from a primary source, i.e., an authority, not a news source. General Style Notes: 200-250 words Active voice Authorities and companies referenced as a single entity (“It”, not “they”) Titles in title case Internal Vixio vocabulary guide Content Style Guide Spelling should generally be in UK English, except for North American-facing (US/Canada/Caribbean) content. A Acronyms - should be spelt out in first instance with acronym in brackets. For example, Financial Conduct Authority (FCA). Act - when just referring to “the act”, it does not need a capital a. Active prose - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Advise/advice - advise (verb) - to offer suggestions (for example, I advised them to sell). - advice (noun) - give formal suggestions (for example, I gave them advice). Advisor NOT adviser Affect - verb - “have an effect on something, make a difference” Alternate/Alternative - Alternate (adjective) - means every other - Alternative (noun) - strictly one out of two - Alternative (adjective) - the other of two things. Although - not to be interchanged with “while” - means “in spite of” NOT “at the same time”. AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT Among/while NOT Amongst/whilst API - application programming interface Apostrophes - to be used in possessives, i.e. an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Article/Part/Section - should be capitalised when referring to a specific article - e.g., Article 4 of the Gambling Act. Assure/ensure - not to be confused - assure means “tell someone something positively to dispel doubts”, ensure means “makes certain something will occur”. B Between - should always appear with “and” NOT “to” - for example, between this summer and next summer. Big tech - two words, breaks convention of other tech words Bills - U.S. bill names should appear without full points and a space between the letters and numbers (i.e. SB 522 NOT SB522 or S.B. 522). Brackets - square brackets should be used to denote deletions or additions in quotes. Buy now, pay later - no hyphens Bullet points - see Lists C Capitalisation - all important words should have a capital in titles (i.e. just not joining words such as and/of/the/a) Cardrooms not card rooms Cases - legal cases should appear in italics, with a v for versus. Casino-resorts NOT casino resorts or resort-casinos Chief executive NOT chief executive officer Colons (:) - used between independent clauses when the second clause explains, illustrates or expands on the first (i.e. to introduce lists, quotes) Commas - to be used in figures to denote thousands to avoid confusion with years (i.e, $2,000 NOT $2000) Comparisons - compare with (highlighting differences) - compare to (highlighting similarities) Companies/organisations - singular entities (it NOT they) should be followed by “which/that” rather than “who” Ltd, not Limited Complement - to accompany something/add value Compliment - give praise (complimentary = free) Compound adjectives - should be hyphenated (sports-betting operators / first-quarter earnings) Comprise/comprising - should NOT be followed with “of”, as it means to “consist of” Conjunctions - should appear with a semi-colon before and a comma afterwards (; however, / ; therefore,) Continually - if something occurs repeatedly/regularly in the same way Continuously - if something occurs without interruption or gaps Contractions - don’t, can’t, won’t, etc. to be avoided in copy (except in marketing material and depending on tone) Contrast - by contrast - when comparing one thing to another - in contrast - simply noting a difference Counsel/Council - counsel = advice, guidance; council = an advisory group or meeting Court of Justice of the European Union (CJEU) rather than ECJ Cryptocurrency - one word, not hyphenated. Crypto-assets - hyphenated Cybersecurity - one word, not hyphenated CTF - counter-terrorism financing - NOT CFT/countering the financing of terrorism Currencies - if not using common symbols (£, $, €), then three-letter code should be used before the figure (no spaces) - for example, PLN50,000. Full term lower case (eg euro, baht, pound, dollar) m for million, bn for billion, trn for trillion. D Date format - Month, Day, Year (e.g., March 7, 2019) For Insights & Analysis summary text: can just say “today”, e.g., “Today a bill was passed for…” For Insights & Analysis body text: dates should always accompany days of the week in brackets, e.g., “On Wednesday (June 8) a bill was passed...” For NIBs: always use dates rather than days. Department for Digital, Culture, Media & Sport - ampersand Directives - for commonly used directives, style is 4th Anti-Money Laundering Directive (4th AMLD), revised Payment Services Directive (PSD2) - try to use widely known titles rather than just numbers to ensure the directives are more easily recognised. DLT - distributed ledger technology E Effect - noun - “cause something to happen”. Em dash (—) - should be used as a conjunction, not a hyphen or en dash (–). Ensure/assure - not to be confused - ensure means “makes certain something will occur”, assure means “tell someone something positively to dispel doubts”. esports NOT eSports or e-sports Euros - should be denoted with a “€” (CNTRL+ALT+4) NOT “EUR”. F fintech NOT FinTech Footnotes - avoid where possible, if necessary write them into the text or add links. G GGR - “gross gaming revenues” Government - does not need a capital g. Governor - should be written out in full, NOT Gov. Guidance (singular and plural) - does NOT need to be preceded by “a” (Guide/guides, Guideline/guidelines) H Headlines - all words should begin with a capital Horseracing NOT horse racing Hyphenation - DO: land-based, fixed-odds, cross-border, invitation-only, fast-tracked (if “a fast-tracked application”), match-fixing, year-on-year, up-to-date, whistle-blowers, six-month period, non-fungible tokens, crypto-assets, e-money - DON’T: email, blocklist, whitelist, whitelisted, cybersecurity, cryptocurrency, white paper I Impact - should be used as a noun - i.e. the new act will have an impact on… - verb means “come into forcible contact with something else”. - using “affect” as a verb is more accurate. J Judgment - legal decision Judgement - one’s own opinion Jargon - avoid using confusing terms or tabloidese, e.g. use players rather than punters. Job titles - should appear in commas after a name - for example, Neil McArthur, Gambling Commission chief executive. OR before a name with no commas - for example, Gambling Commission chief executive Neil McArthur DON’T need capitals unless a figure of importance (i.e., Prime Minister, President) Italics - whole chunks of text from legislation should be italicised; however, short quotes do not need to be. Justice Department - U.S. Department of Justice - to appear with caps (as requested by US team). K KYC - know your customer L Legislature - does not need a capital l. Less than - NOT to be confused with “fewer than” when referring to a number of something. i.e. fewer than 100 gambling tables. Licence - noun (UK), i.e. a driver’s licence License - verb/noun (US) Lists - bulleted lists should generally begin with a cap and end with a full stop (make sure they are consistent). M MONEYVAL NOT Moneyval More than - to be used instead of “over”. i.e., more than 20 players rather than over 20 players. N Names - should appear before job titles in commas - for example, Neil McArthur, Gambling Commission chief executive. Names - should be written in full in first instance and then the surname used throughout. Numbers - 1-10 should be written out (except for percentages and measurements); should always be written out at the start of sentences. Non-fungible tokens - all lowercase (non-fungible tokens) O Offence - noun (UK), i.e. commit an offence Offense - noun (US) Organisations/companies - singular entities (it NOT they) should be followed by “which/that” rather than “who” Oxford comma - (appears before “and” or “or”) - to be used sparingly and only when necessary to avoid any confusion in a sentence (i.e., where more than one “and/or” appears). Over - should not be used as a replacement for “more than”. P Parliament - does not need a capital p. Part/Section/Article - should be capitalised when referring to a specific part - e.g., Part 4 of the Gambling Act Passive voice - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Past/passed - past is a noun/adverb/adjective - “in the past”, “past experience”. - passed is the past tense of “to pass” - “the law was passed in government”. Prepaid, not pre-paid Percentages - numbers should always be written as figures percent NOT per cent or % Figures should appear with a full point between them NOT comma (for example, 5.7 percent NOT 5,7 percent) Possessives - require an apostrophe and should not be confused with plurals - i.e., an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Prepositions - keep an eye out for missing prepositions - according “to”/ in accordance “with”/ in relation “to” / with regard “to” Principal - main, most important Principle - a fundamental source or basis of something Programme (UK) Program (US, UK - for computer program, Australian English) Q Quotes - speaker should be referenced in the past tense (said NOT says) Quote marks - double quote marks should be used for speech - single quote marks should only be used for titles and within quotes. (See Quote reference sheet for more information on how to use quotes.) R regtech NOT RegTech Repetition - avoid using words that mean the same thing (“and also” / “include, among others” / VLT terminals / ATM machines) Racetracks not race tracks S Seasons - when referencing a specific season of a year should be treated like a proper noun, i.e. should include a capital - Winter 2018. Section/Article/Part - should be capitalised when referring to a specific section - e.g., Section 4 of the Gambling Act. Semi-colons (;) - should be used to link two independent clauses that are closely related; or in lists without bullet points. (Do not overuse - often a full stop and new sentence will be better.) Sports betting NOT sportsbetting Sports team names Storey (pl. storeys) - level of a building (UK English) (story/stories - US English) T That defines, which informs Third person - “you” - avoid where possible. Titles - all important words should begin with a capital (i.e. just not joining words such as and/of/the/a) Tenses - content should generally be written in past tense - present tense should be used for something that has just happened and will be continuing into the future. U United States abbreviated to U.S. (Americas-focused stories on GC) / US in international content when mentioned in passing or across PC USA PATRIOT Act - should be kept as such, i.e. with caps, as it’s an acronym for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act”) U.S. Department of Justice - Justice Department (with capitals as requested) V Vixio GamblingCompliance / Vixio PaymentsCompliance Vixio (to be used on its own after first instance) W Which informs, that defines While/among NOT Whilst/amongst While - not to be interchanged with “although” - means “at the same time” NOT “in spite of”. X Y Year quarters - Q1, Q2, H1, H2, etc. Z Acronyms AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT API - application programming interface DLT - distributed ledger technology --- Now, given the above instructions and style guide, please generate a horizon scanning update based on the following webpage content. Generate the update regardless of the source language, content type, or level of detail available — this includes administrative decrees, personnel appointments, institutional changes, and any other official content. Use whatever information is present. RReegguullaattoorryy PPrriioorriittiieess Payments March 2026 Financial Conduct Authority Regulatory Priorities: Payments This Regulatory Priorities report is for: Contents Firms authorised or Foreword registered under the Page 3 Payment Services Regulations 2017 and the Electronic Money Executive summary Regulations 2011 Page 4 What we’ve done in the market Page 5 Our priorities: Preparing for the future to support effective competition, innovation and growth Page 7 Our priorities: Ensuring firms implement the Consumer Duty effectively Page 8 Our priorities: Protecting financial system integrity Page 9 Our priorities: Keeping customers’ money safe Page 10 Other areas of focus Page 11 You can find all our Regulatory Priorities Key publications and speeches reports at Page 12 www.fca.org.uk Timeline Page 13 2 Financial Conduct Authority Regulatory Priorities: Payments Foreword We’re committed to being a smarter regulator – predictable, purposeful and proportionate. Central to that is how we communicate to the firms we regulate what’s important to us. These new Regulatory Priority reports replace more than 40 portfolio letters. Published annually, they set out our areas of focus by industry sector. They attempt to pull together all that we’re doing – whether by supervisors or in policy development. A clear, succinct, one-stop shop. They should act as a guide for firms’ boards and chief executives. You should read these reports carefully, review the priorities within them – and act where you need to. This is the latest example of how we’re transforming the way we supervise. This year, we’ll go further, expanding dedicated supervisory contacts, applying a more risk-based approach for our largest firms, and making data collection more targeted and efficient. Our goal is simple: less intensive attention on firms doing the right thing, and stronger, faster action where harm is greatest. Importantly, we also want you to engage with us. We welcome your feedback on these reports and our approach to supervision. Share your insights, challenge our thinking, and work with us as we refine this new model. Together, we can build a regulatory system that deepens trust and rebalances risk, to support growth and improve lives. David Geale Executive Director of Payments and Digital Finance Matthew Long Director of Payments and Digital Assets 3 Financial Conduct Authority Regulatory Priorities: Payments Executive summary The payments sector has continued to develop, driven by technological advances like open banking, and digital payment methods like stablecoins and tokenised deposits. The potential for innovation to deliver better outcomes for consumers and markets is encouraging. This includes offering consumers and businesses more payment methods that meet their needs. Over the past year, we’ve collaborated closely with the Treasury, regulators and the industry on delivering the Government’s National Payments Vision (the Vision). We’re working on initiatives to make sure the payments sector is safe, innovative and competitive, and supports growth. Trust and confidence are essential for growth and competition and are based on firms meeting proportionate standards. We’ve seen better outcomes for consumers where firms have implemented the Consumer Duty (the Duty) effectively, but some are still falling short. Similarly, some firms have improved their governance and systems and controls to protect financial system integrity and keep their customers’ money safe – but others have more to do. We’ve been robust to mitigate the risk of harm, using our supervisory and enforcement tools. Firms should identify the messages in this letter that are relevant to them and take appropriate action. Our payments priorities for this year Preparing for the future to support effective competition, innovation and growth We’ll continue our policy work in areas such as open banking, stablecoins, and modernising payments regulation to support positive innovation and competition. Firms should make any changes needed to comply with the applicable regulation on an ongoing basis and engage with us to ensure that future regulation is fit for purpose. Firms that meet the criteria can use our innovation services to bring ideas to market in a controlled and sustainable way. We’ll also support firms intending to apply for authorisation or registration. Ensuring firms implement the Consumer Duty effectively We’ll engage with firms to make sure they implement the Duty. Firms should assess their products, services and processes against all the relevant rules and guidance, including the Duty, on an ongoing basis. They should address any gaps in their compliance immediately; we’ll take appropriate action against firms that don’t do this. Protecting financial system integrity We’ll continue our work to fight financial crime, including fraud and money laundering. Firms should have effective governance arrangements and systems and controls, and the right skills to identify, assess and mitigate risk. They should read our upcoming policy statement on Incident and Third- Party Reporting rules and prepare to implement them. Keeping customers’ money safe We’re concerned that customers’ money may not always be safe if payments firms fail. Firms should have effective governance arrangements and systems and controls, and the right skills to identify, assess and mitigate risk. Our Safeguarding Supplementary Regime will come into force in May; firms should be ready to comply with our rules. 4 Financial Conduct Authority Regulatory Priorities: Payments What we’ve done in the market A lot has happened in the payments market since we published our Dear CEO letter in February 2025. Following the publication of the Government’s Vision, we’ve worked with the Treasury, the Bank of England and the Payment Systems Regulator (PSR) as members of the Payments Vision Delivery Committee, which published its strategy for future retail payments infrastructure in November. The strategy is anchored around 5 strategic outcomes that build on the Vision’s pillars of innovation, competition and security. The Retail Payments Infrastructure Board will translate the Committee’s strategy into design. We’ll continue delivering the Vision through the Committee and as an observer of the Board, taking an interest in its design of future retail payments infrastructure and its impact on consumers and markets. In June we published a revised Memorandum of Understanding with the Bank, the Prudential Regulation Authority, and the PSR to enhance regulatory cooperation. And following the Government’s consultation, we’ll continue consolidating the PSR’s functions into the FCA ahead of legislation where possible. This will streamline the regulatory environment and help us manage our collective impact on regulated firms, in line with our strategic priority to be a smarter, more efficient regulator. The Committee published the Payments Forward Plan in February. It presents a consolidated view of the regulatory pipeline and its intended outcomes, to help firms plan and innovate. As lead regulator for open banking, we’ve brought sector leaders together to help the industry develop commercial models for variable recurring payments. We’ve helped industry incorporate a new entity to unlock low-risk use cases, including utility payments, financial services payments and payments to local and central government. We’ve also laid the foundations for e-commerce use cases. The expansion of open banking has the potential to enhance growth and competition in the sector. We’ve also published our new approach to the contactless payment limits in the regulatory technical standards. Our changes will enhance consumer choice and flexibility for payments firms to support growth. As lead regulator for open banking, we’ve brought sector leaders together to help the industry develop commercial models for variable recurring payments. 5 Financial Conduct Authority Regulatory Priorities: Payments When firms meet proportionate standards, they instil trust and confidence, which are essential for growth and competition. To raise standards in the sector, we published a policy statement on changes to the safeguarding regime to address current weaknesses in firms’ practices. We’ve also shared examples of good and poor practice for firms communicating the cost of international payments and for risk management and wind- down planning. Firms should review our findings and take appropriate action. We’ve assessed firms’ governance arrangements and systems and controls at the gateway to ensure new entrants meet our standards. There have been higher approval rates for the payments sector, which should support future growth. Where firms have been unsuccessful in applying for authorisation or registration, we’ve seen issues with senior managers’ competence and inadequate systems and controls – including financial crime controls. We encourage firms to pay particular attention to these areas when they apply. Assessing firms at the gateway will remain a key priority. We continue to take robust action where we see harm in the sector, using our supervisory and enforcement tools to deliver good outcomes for consumers and markets. Collaborating Over with industry, regulators and law enforcement agencies to fight financial crime has been a priority, in line with the Government’s 16 and the FCA’s strategic approach to fighting financial crime. We have improved our mechanisms for exchanging information million with law enforcement agencies. Our remediation tools include: people and • feedback to firms, with an expectation of remediation businesses used • requirements applied to firms to limit risks until they open banking in improve their controls (such as restrictions on high-risk the UK in 2025, customer activity) making over • appointing independent skilled persons, answerable to us, to review firms’ systems and controls, make 29 recommendations, and assure the remediation million payments on average per month. 6 Financial Conduct Authority Regulatory Priorities: Payments Our priorities: Preparing for the future to support effective competition, innovation and growth Firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 What we expect firms to do • Prepare for the future: As we continue policy work on open banking, stablecoins, and modernising payments regulation, firms should make any changes needed to comply with the applicable regulation on an ongoing basis and invest where needed to ensure they’re ready to comply with regulatory change. • Engage with us: We encourage firms to respond to our policy papers and join events like our Tech Sprints and Policy Sprints. This will help us ensure that future regulation is fit for purpose and allow firms to innovate safely. • Use our innovation services: We can help firms that meet the criteria bring their ideas to market in a controlled and sustainable way. • Prepare for authorisation: Firms intending to apply for authorisation or registration should prepare thoroughly and consider using our pre-application support service. We expect the payments sector to continue developing, driven by innovations that have the potential to boost growth and competition. We want to support this growth and ensure it delivers good outcomes for consumers and markets. What we’ll do this year • Support the expansion of open banking: Support industry in establishing a Future Entity for open banking. We’ll also support the Treasury in introducing legislation to grant us powers to set new rules for the long-term regulatory framework. • Modernise payments regulation: Work with the Treasury to modernise and future-proof the regulation of payment services and electronic money, to deliver a more agile and responsive regulatory environment. This will include considering whether change or development of regulation is needed to support agentic AI payments. • Explore stablecoins for payments: Work with the sector to consider the appropriate way in which stablecoins and other tokenised payment instruments can be brought into regulated payments. 7 Financial Conduct Authority Regulatory Priorities: Payments Our priorities: Ensuring firms implement the Consumer Duty effectively Firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 What we expect firms to do • Ensure ongoing compliance: Firms should assess their products, services and processes against all the relevant rules and guidance, including the Duty, on an ongoing basis. They should address gaps in their compliance immediately. • Read our good and poor practice publications: Firms should consider these findings to improve their practices: • Implementing the Duty • International payment pricing transparency • Delivering good outcomes for consumers in vulnerable circumstances • Cryptoasset financial promotions and fiat-to-crypto on/off ramp services When firms implement the Duty effectively, they protect consumers and deepen trust. We’ve seen improvements, but there are still instances where firms are not acting to deliver good outcomes for retail consumers. For example, we recently Total customer found that firms could be more transparent about the cost of international money remittance and cross-border payments. complaints submitted to What we’ll do this year the Financial Ombudsman • Reinforce our expectations: Continue to engage with firms on Service against their obligations under the Duty, identifying gaps in compliance and taking appropriate action against firms that fail to address payments firms gaps. Areas of focus will include: fell 9% – international payment pricing transparency from 2024 to – how firms treat consumers in vulnerable circumstances 2025. 8 Financial Conduct Authority Regulatory Priorities: Payments Our priorities: Protecting financial system integrity Firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 What we expect firms to do • Have effective governance, capability, and systems and controls: Firms should have effective governance arrangements and systems and controls to identify, assess and mitigate risk. They should have the right skills to deliver their governance priorities and to design and test systems and controls. • Prepare for the future: Firms should invest where needed to further embed operational resilience, including in processes such as new product design. They should ensure they are ready to comply with regulatory change and be ready to implement the rules in our upcoming policy statement on Incident and Third-Party Reporting. Firms should also engage with us on our work to modernise payments regulation. Protecting and enhancing the integrity of the UK financial system helps to ensure that markets are effective, efficient, and reliable. This is the foundation of long-term competitiveness and growth. We’ve been encouraged by some firms significantly enhancing their governance, oversight, and systems and controls. However, weaknesses in this area still pose risks to market integrity. What we’ll do this year • Continue to assess: Assess firms’ governance, oversight, and systems and controls relating to financial crime and operational resilience. We’ll take action against firms that consistently fail to meet standards. • Fight financial crime: Tackle financial crime, including money laundering, and slow the growth of fraud, including authorised push payment fraud. We’ll cooperate with industry, other regulators, and law enforcement agencies to reduce harm, exploring opportunities for greater data sharing. We’ll use our supervisory intervention and enforcement tools where appropriate. • Enhance our operational resilience framework: Publish our policy statement with the Bank of England and Prudential Regulation Authority on Incident and Third-Party Reporting rules. 9 Financial Conduct Authority Regulatory Priorities: Payments Our priorities: Keeping customers’ money safe Authorised payment institutions (except payment institutions which solely provide payment initiation services or account information services), authorised electronic money institutions, small electronic money institutions and small payment institutions What we expect firms to do • Have effective governance, capability, and systems and controls: Firms should have effective governance arrangements and systems and controls to identify, assess and mitigate risk. They should have the right skills to deliver their governance priorities and to design and test systems and controls. • Prepare for the future: Firms should invest where needed to ensure they are ready to comply with regulatory change. Firms should be ready to implement our new safeguarding rules, which come into force in May. Firms should also engage with us on our work to modernise payments regulation. We want customers’ money to be safe. Over the past year, some firms have improved their financial resilience and safeguarding arrangements. However, some don’t have robust safeguarding practices and haven’t fully developed their risk management frameworks and wind- down plans. This presents a risk to customer funds and market integrity. We’ve introduced new safeguarding rules in response to weaknesses across the sector and we expect firms to be ready to implement them. What we’ll do this year • Continue to assess: Assess firms’ governance, oversight, and systems and controls relating to financial resilience and safeguarding. We’ll take action against firms that consistently fail to meet standards. • Implement our Safeguarding Supplementary Regime: Firms should have made changes to comply with the new rules by the time they come into force. We’ll consider the outcomes of safeguarding audits and address issues with firms. As we’ve strengthened standards in this area, we may see an increase in ‘adverse’ audit opinions in the short term. Electronic money institutions safeguarded approximately £26bn in 2024, up from £11bn in 2021, and payment institutions safeguarded an estimated £6bn per day in 2024. 10 Financial Conduct Authority Regulatory Priorities: Payments Other areas of focus Open banking and open finance Ahead of legislation, we’ll work with participants across the sector to establish the open banking Future Entity. This will include a series of workshops over the summer and into autumn 2026. Firms should engage with the independent consultancy-led exercise to support the selection of the body to lead the set-up of the Future Entity. We’ll build on the success of open banking to launch open finance, with our open finance roadmap to be published by the end of March 2026. We expect the regulatory framework for the first scheme to be in place by the end of 2027. Stablecoins As set out in our Crypto Roadmap, we’ll publish our final policy statements on our cryptoasset regime in 2026. This will include final rules on the issuance of stablecoins in the UK. To help our final policy development for stablecoin issuance, we’ve launched a special stablecoin cohort within our Regulatory Sandbox to test prospective stablecoin issuers. We’ll also work alongside the Bank of England and the PSR to help firms transition between our respective regimes. Following our first dedicated Tech Sprint for stablecoins in March 2026 covering retail payments, cross-border payments, e-commerce and business-to-business transactions, and remittance, we’ll hold a trade payments roundtable in May. We’ll also develop our policy for stablecoin payments to aid their broader adoption in the UK. We’ll draw on information from our stablecoin Sprints. We’ll work closely with the Treasury and other regulators. International cooperation Our international work includes contributing to initiatives to enhance the transparency, speed, affordability, accessibility and security of cross-border payments, as well as supporting innovation in this area. This requires multilateral cooperation through, for example, the Organisation for Economic Co-operation and Development, the Financial Action Task Force and the Financial Stability Board. We also engage in a range of bilateral dialogues and exchanges, including the Transatlantic Taskforce for Markets of the Future. Artificial intelligence We’ll continue to give firms a safe space to experiment and test in, to enable safe and responsible AI adoption. This includes continuing cohort 1 and launching cohort 2 of the Supercharged Sandbox and AI Live Testing: firms are welcome to apply. We’ll publish an evaluation report from AI Live Testing by the end of this year. 11 Financial Conduct Authority Regulatory Priorities: Payments Key publications and speeches Joint response from the FCA and the Payment Systems Regulator (PSR) to the Treasury’s recommendations on payments regulation (November 2025) PSR and FCA response to the Treasury’s consultation on consolidating the PSR’s functions within the FCA (October 2025) FCA speech: The role of the FCA and PSR in delivering the National Payments Vision (David Geale, FCA executive director of payments and digital finance, at the Payments Regulation and Innovation Summit, February 2026) FCA news story: Open banking: a year of progress (December 2025) FCA research note: Open banking and open finance in the UK (October 2025) FCA feedback statement: Design of the Future Entity for UK open banking (August 2025) FCA Payments strategy and Consumer Duty webinar (July 2025) FCA webpage: Our Consumer Duty focus areas (September 2025) FCA Payments safeguarding policy statement webinar (November 2025) FCA webpage: Apply to become an electronic money or payment institution (April 2015) FCA publication: Payment services and electronic money – our approach (November 2024) Bank of England, Prudential Regulation Authority, and FCA publication: Effective practices: cyber response and recovery capabilities (October 2025) FCA speech: The FCA’s approach to regulating cryptoassets and stablecoins (David Geale, FCA executive director of payments and digital finance, at City and Financial Global, November 2025) FCA consultation paper: Application of FCA Handbook for regulated cryptoasset activities – part 2 (January 2026) Financial Stability Board publication: High-level recommendations for the regulation, supervision and oversight of global stablecoin arrangements: final report (July 2023) FCA video guides: Improving applications for authorisation and registration as a payments firm and digital asset firm (February 2026) 12 Financial Conduct Authority Regulatory Priorities: Payments Timeline Read the Payments Forward Plan for upcoming initiatives across retail and wholesale payments, including elements of digital assets. 13 © Financial Conduct Authority 12 Endeavour Square London E20 1JN Telephone: +44 (0)20 7066 1000 Website: www.fca.org.uk All rights reserved Pub ref: 1-9064 All our publications are available to download from www.fca.org.uk. Request an alternative format Please complete this form if you require this content in an alternative format. Or call 0207 066 1000 Sign up for our news and publications alerts

Regulatory Priorities: Payments report

Classification

Pipeline Progress

🔄 Pipeline Journey

🤖 How this summary was made

Full AI Instructions