Modernising Payment Services Regulation and the RPIB: the questions asked
In short: HM Treasury asked 42 questions on reforming the Payment Services Regulations 2017, the Electronic Money Regulations 2011 and Open Banking in its Modernising Payment Services Regulation consultation, which closed on 6 October 2026. The Retail Payments Infrastructure Board, chaired by the Bank of England, asked 18 questions on the design of the next-generation core clearing and messaging infrastructure in a consultation that closed on 11 September 2026.
Between June and October 2026 the Retail Payments Infrastructure Board, chaired by the Bank of England, and HM Treasury invited views on two connected subjects: the design of the next core infrastructure for UK retail payments, and the modernisation of the law on payment services and electronic money. Both consultations have closed, and neither body has yet published its response.
Key points
- The Retail Payments Infrastructure Board (RPIB), a senior advisory group chaired by the Bank of England, consulted from 25 June to 11 September 2026 on the design of the next-generation retail payments infrastructure. Source: Bank of England, RPIB consultation.
- HM Treasury consulted from 14 July to 6 October 2026 on modernising payment services and electronic money regulation. Source: HM Treasury, Modernising Payment Services Regulation.
- The RPIB asked 18 numbered questions, several with sub-questions, across payment journeys, design principles and a seven-layer conceptual architecture. Source: RPIB consultation, Annex 2.
- HM Treasury asked 42 questions across three chapters: what stays in legislation, new developments in payment services, and Open Banking. Source: HM Treasury consultation, chapter 5.
- The RPIB has said it will publish a summary of responses; HM Treasury has said it will set out implementation detail after the consultation, and that any changes to existing regulation will be made by secondary legislation. Source: RPIB consultation, section 5; HM Treasury consultation, paragraph 1.11.
| Feature | RPIB consultation | HM Treasury consultation |
|---|---|---|
| Who consulted | Retail Payments Infrastructure Board, chaired by the Bank of England | HM Treasury |
| Open | 25 June to 11 September 2026 | 14 July to 6 October 2026 |
| Number of questions | 18, with sub-questions | 42 |
| Subject | Design of the core clearing and messaging infrastructure | Reform of the PSRs 2017 and EMRs 2011, tokenised payments, agentic payments and Open Banking |
| Published next step | Summary of responses and next steps in the high-level design phase | Further detail on implementation, with changes made by secondary legislation |
How the two consultations relate
The RPIB is designing infrastructure for retail payments; HM Treasury is proposing changes to the law that regulates them. The RPIB is translating the Payments Vision Delivery Committee’s strategy for future retail payments infrastructure into a high-level design, which an industry-owned Delivery Company (DeliveryCo) is to take forward; Pay.UK continues to operate the UK’s existing retail interbank payment systems in the meantime. HM Treasury, in its Modernising Payment Services Regulation consultation, is reviewing the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs), which it describes as the bulk of payment services law.
The RPIB states that decisions on the core infrastructure will “shape, and be shaped by” the wider payments ecosystem, including the work of HM Treasury and the FCA to modernise payments regulation. HM Treasury cites the RPIB consultation in its introduction, records that the Payment Systems Regulator is being consolidated into the FCA, and notes that the Financial Services and Markets Bill 2026 is before Parliament. According to the Parliament bill page, the Bill completed its Lords stages on 15 September 2026 and, as at 7 October 2026, was awaiting second reading in the Commons. The consolidation is set out in the note on the Financial Services and Markets Bill 2026.
RPIB questions on payment journeys and design principles
The RPIB proposed an illustrative, non-exhaustive list of payment journeys to inform the design of the core infrastructure. It listed four existing journeys the core should keep and, where possible, improve: single immediate payments, batch payments, recurring or scheduled payments, and cross-border payments. It listed six new or emerging journeys: account-to-account payments at physical and online points of sale, instant payments via aliases such as a phone number, advanced delegated payments (to a carer or an AI agent), programmability, deferred payments made when connectivity is lost, and payments across different forms of money. The RPIB asked whether those journeys are sufficient to inform the design (1), whether there are additional or alternative journeys (1a) and whether any journey is not an appropriate input (1b). It also asked what should guide migration timelines and product roadmaps (2). The RPIB expects transition management to be a key activity for DeliveryCo, working with Pay.UK, and described one possible approach: a staged transition with a defined, time-limited period of dual running where needed.
In questions 3 and 4 the RPIB consulted on six proposed design principles: a platform for innovation and competition, open access, common utilities and common standards, security and resilience, performance and scalability, and protection from fraud and wider financial crime. The RPIB asked whether respondents agree with the list (3), whether there are additional (3a) or alternative (3b) principles, which should take priority (4) and what trade-offs follow for performance, scalability and cost (4a).
RPIB questions on the architecture and cross-cutting issues
In questions 5 to 10 the RPIB sought views on a technology-agnostic conceptual architecture, a model of the retail payments system in seven layers: end user, access, product, core messaging and clearing, settlement, services, and scheme and standards. The RPIB described the architecture as a way to organise its thinking rather than a proposed design of the payments system, and invited respondents to challenge its structure, assumptions and proposed boundaries. It described the core as focusing on a minimum set of essential functions, including clearing and settlement co-ordination, core messaging and routing, transaction processing and controls, and connectivity and access management. It asked whether respondents agree with the architecture (5) and its boundaries between layers (6), which baseline services belong in the core (7), which payment-enabling or value-add services should be delivered separately from it (8), what opportunities and challenges digital identity frameworks and credentials such as Legal Entity Identifiers could present (9) and what other architecture-wide issues should be considered (10).
In questions 11 to 13 the RPIB consulted on interoperability between forms of money and on settlement models. On the RPIB’s working definition, a payer pays in one form of money, for example a bank deposit, and the payee receives another, for example a claim on a stablecoin. The liabilities are exchanged at par (one for one) in the clearing and messaging layer, and settlement takes place in central bank money. The RPIB asked whether respondents agree with that approach (11), what the trade-offs are between settlement models for speed, payment certainty, liquidity, operational complexity and scalability (12), and what design, governance and operational issues interoperability would raise (13).
In questions 14 to 18 the RPIB turned to priority and emerging journeys. It asked whether the design choices capture what is needed for account-to-account payments at the point of sale, online and in store (14), and what further opportunities and challenges exist (14a); how the infrastructure could help with cross-border payments and which solutions to target (15 and 15a); what functional requirements the infrastructure and the wider ecosystem would need to meet to enable programmable payments in high volumes while maintaining resilience and user trust (16); what the infrastructure would need to support agentic payments safely and what barriers to adoption exist (17 and 17a); and which consumer protection and fraud-related capabilities should be prioritised for inclusion in the core (18). The RPIB stated in its fraud principle that the core infrastructure “would not create a new consumer protection regime or redefine liability or reimbursement models”.
Modernising Payment Services Regulation: what stays in legislation
HM Treasury asked in questions 1 to 4 which requirements in the PSRs and EMRs should remain in legislation and which should be delegated to the FCA. HM Treasury proposes to keep the perimeter of regulated payment services and key definitions, such as electronic money, in legislation, and it has committed to keep the notice period and the explanation a provider must give when it terminates a framework contract. Where HM Treasury delegates a requirement, it proposes to remove the requirement from the statute book and the FCA would consult on replacement rules. HM Treasury included two assimilated EU Regulations in scope, the Cross Border Payments Regulation and the SEPA (Single Euro Payments Area) Regulation, and excluded the Interchange Fee Regulation and the Payment Card Interchange Fee Regulations 2015. It asked what to delegate (1), what to update in what remains (2), whether key definitions need updating (3) and which international developments, such as the EU’s payment services reforms, the UK should incorporate (4).
HM Treasury questions on tokenised payments and stablecoins
In questions 5 to 8 HM Treasury consulted on tokenised deposits and stablecoins, starting with whether the law needs to adapt for tokenised deposits in retail payments (5). HM Treasury proposes to treat as money-like, and to bring within the payments perimeter, stablecoins issued in the UK under the new regulated activity in article 9M of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, which the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 insert with effect from 25 October 2027. It may extend that approach in future to stablecoins from an overseas jurisdiction that HM Treasury recognises. It asked whether only those stablecoins should be treated as money-like (6), whether authorised issuers of UK-issued qualifying stablecoins should be able to provide payment services without additional permissions but subject to relevant requirements (7), and whether safeguarding of those stablecoins in the course of payment services should in time fall under the payments regime and not the cryptoasset regime (8).
In questions 9 to 14 HM Treasury consulted on how payment services should be defined as regulated activities. HM Treasury proposes to replicate the activities in Schedule 1 to the PSRs as individual regulated activities, with three changes: merging the cash placement and cash withdrawal activities, merging the two payment execution activities, and splitting issuing payment instruments from acquiring payment transactions. HM Treasury proposes that the same activities apply to payments in conventional currency and to tokenised payments (payments made with digital tokens on a distributed ledger), and that an existing firm obtain a variation of its FCA permission before providing tokenised payment services. HM Treasury asked about the split (9), a single set of activities for both kinds of payment (10), the variation requirement (11), smart contracts and programmable payments (12), and whether conduct (13) and prudential (14) requirements suit tokenised payments.
HM Treasury questions on agentic payments, inclusion and sector risk
HM Treasury asked in question 15 how payment services regulation needs to adapt to support agentic payments, in which an AI agent initiates or completes a payment for a consumer or business, and whether the provisions on authentication and consent, and on liability for unauthorised payment transactions, need updating. HM Treasury put forward no specific proposal on those provisions. The current position on consent and liability under the PSRs is set out in the note on agentic payments liability. HM Treasury also asked about other innovations to take into account (16) and how the reforms can support an inclusive payments market (17).
In questions 18 to 20 HM Treasury consulted on sector risk. It recorded that HM Treasury and the Home Office, in the National Risk Assessment, had identified an increased risk of financial crime in the payments and electronic money sector. It asked what key risks have emerged in recent years and how well the current regulations address them (18), whether enhanced accountability for senior managers of payment and electronic money institutions would support better management of financial crime risk, and with what benefits, costs or risks, including to international competitiveness (19), and what targeted amendments would address sector risks proportionately (20).
HM Treasury questions on Open Banking
In questions 21 to 42 HM Treasury consulted on the long-term legal basis for Open Banking, which today depends on the PSRs and the CMA’s Retail Banking Market Investigation Order 2017. HM Treasury described two tracks: modernising the Open Banking provisions of the PSRs, and a new framework under Part 1 of the Data (Use and Access) Act 2025 (DUAA), under which the government committed to lay a statutory instrument by the end of 2026.
On the first track, HM Treasury intends the existing rights of access in regulations 69 and 70 of the PSRs to remain in statute. It intends to establish a new right of access for variable recurring payments, which could require an account servicing payment service provider (ASPSP), such as a bank, to allow a payment initiation service provider (PISP) to lodge a payment mandate for a series of payments; the scope could be limited to providers of current accounts or to ASPSPs of a certain size. HM Treasury states that access under the new right will not be required to be provided free of charge, except for sweeping (automatic transfers between a customer’s own accounts). It also intends to enable the FCA to decide whether access that is free today should move to a commercial basis. HM Treasury invited views on the new right and its scope (21), on charging for access that is free today (22), on lifting the ban in regulations 69 and 70 on an ASPSP requiring a contract before giving access (23), other changes to the rights of access (24), the definitions of payment initiation and account information services (25), what should stay in legislation (26) and any other adjustments (27).
On the second track, HM Treasury intends to give the FCA powers under DUAA, through regulations of the kind provided for in section 14, to make rules for ASPSPs, PISPs and account information service providers (AISPs), including on interfaces, standards, pricing guardrails for commercial products, funding of the standard-setting Future Entity and dispute processes. HM Treasury does not propose a power for the FCA to mandate ASPSP participation in commercial Open Banking schemes. It asked about the FCA’s interface powers (28), a power to mandate scheme participation (29), whether to keep the CMA Order requirement to publish product and reference information (30), and whether to keep the requirement to enable sweeping and, if so, its scope (31).
HM Treasury expects the Future Entity and the operators of commercial schemes to be interface bodies under DUAA. It intends to give the FCA a power to require each scheme and its participants to establish a centralised pricing model, and to set guardrails such as requiring that pricing is fair and that schemes are transparent about their pricing methodology. HM Treasury also considers that there would be benefit in a power for the FCA to intervene more directly in pricing if needed, for example by a cap. HM Treasury asked about FCA powers over the Future Entity (32), competition law barriers to commercial schemes (33), direct pricing intervention inside and outside schemes (34), FCA powers over schemes (35) and any further powers the FCA would need (36).
Commercial variable recurring payments and competition law
A variable recurring payment uses a single mandate, under which a payment initiation service provider makes a series of payments from the customer’s account, rather than a separate authorisation for each payment. Under the CMA Order, the largest banks must enable variable recurring payments free of charge for sweeping between a customer’s own accounts (paragraph 4.26). Variable recurring payments for other purposes, known in the market as commercial variable recurring payments (cVRP), are offered through commercial Open Banking schemes. HM Treasury describes a scheme operating on a commercial basis as one in which the participants can agree pricing arrangements, with account providers able to receive a fee for enabling access and payment initiation (paragraph 4.33). HM Treasury records that novel variable recurring payments are now taking place under a new Open Banking scheme and welcomes the industry action that launched it (paragraphs 4.4 and 4.23).
HM Treasury acknowledges that centralised pricing within a scheme raises a question under competition law (paragraph 4.36). Section 2 of the Competition Act 1998 (the Chapter I prohibition) prohibits agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade in the United Kingdom and have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom, subject to the exclusions and exemptions in the Act. HM Treasury gives its reasons for a centralised pricing model in each scheme: it would avoid a web of bilateral agreements, could encourage smaller payment initiation and account information service providers to take part without negotiating with each account provider, would likely improve price certainty and could reduce the risk of different firms paying different prices for the same service (paragraph 4.35). HM Treasury acknowledges that market participants may otherwise have concerns about centralised pricing under the Act, and notes that, depending on what FCA rules require, participants may be able to rely on the exclusion in paragraph 5 of Schedule 3 for agreements made to comply with a legal requirement (paragraph 4.36). In question 33 it asked whether its approach would leave competition law barriers to the operation of commercial schemes and how they might be addressed. How the move of Open Banking from a CMA remedy to a statutory basis bears on the competition position of industry schemes is set out in the note on the open banking competition regime after the smart data SI.
On supervision, HM Treasury intends to model the FCA’s Open Banking monitoring and enforcement powers on its powers under the Financial Services and Markets Act 2000, with a possible power to issue compliance notices under section 8 of DUAA, and to mirror the FCA’s existing objectives and have-regards. HM Treasury asked about mirroring the FCA’s enforcement powers (37), compliance notices (38), sharing confidential information with the Future Entity (39), mirroring the FCA’s objectives (40), an additional objective reflecting the innovation and data-sharing aims of DUAA (41), and any other feedback (42).
How the EU approached the same questions in PSD3 and the Payment Services Regulation
HM Treasury asked in question 4 which international developments, such as recent EU reforms, the UK should incorporate, and noted the EU’s provisional agreement on a third Payment Services Directive and a Payment Services Regulation (paragraph 2.14); it also invited views on what the UK framework may need to support the UK’s continuing membership of the Single Euro Payments Area (paragraph 2.15). The Council and the European Parliament reached that provisional agreement on 27 November 2025, and the Council’s General Secretariat circulated the final compromise texts of the Payment Services Regulation (Council document 8221/26) and the third Payment Services Directive, PSD3 (Council document 8222/26), on 17 April 2026. The European Parliament’s Economic and Monetary Affairs Committee approved the agreed texts on 5 May 2026. As at 7 October 2026 neither instrument had been formally adopted or published in the Official Journal, so neither was yet EU law. On the agreed text the Regulation would apply 21 months after it enters into force; the payee verification provisions and the related refund liability (Articles 50 and 57) would apply after 27 months, and the exemption for recurring credit transfers described below (Article 85a) on entry into force (Article 112).
The EU co-legislators put the conduct-of-business rules, including those on open banking, fraud and strong customer authentication, in the Payment Services Regulation, which would apply directly in every Member State, and the rules on authorisation and supervision in PSD3. Under PSD3, issuing electronic money would become one of the listed payment services (Annex I, point 8), and electronic money institutions would no longer hold a separate authorisation but would be authorised as payment institutions, with the distinct requirements for electronic money, including on capital, distribution and redeemability, preserved (recitals 5 and 6). HM Treasury plans to keep the perimeter and key definitions in legislation and is considering which more detailed requirements to delegate to FCA rules (paragraphs 2.7 and 2.9). It proposes to keep issuing electronic money as a regulated activity alongside the payment services (paragraph 3.21), and does not address whether electronic money institutions would continue to hold a separate authorisation. Under the agreed EU Regulation, the strong customer authentication requirements remain in the Regulation itself (Article 85), whereas HM Treasury has committed to begin revoking the authentication provisions in the PSRs so that the FCA can make outcomes-based rules (paragraph 2.8).
Under the agreed EU Regulation, account information and payment initiation services still cannot be made conditional on a contract with the account provider (Article 34(1)). The EU co-legislators record in the recitals that this principle has meant access without charge since PSD2 and should be maintained (recital 55); no Article of the agreed text sets that out as a separate rule. Account providers and third-party providers may agree, including through a multilateral scheme, on paid services beyond what the Regulation requires, and the EU co-legislators give the scheduling of future variable recurring payments as an example of such a premium service (recital 56). The agreed Regulation creates no right of access for variable recurring payments, but the dedicated interface must allow payment initiation service providers to place standing orders and future-dated payments (Article 36(4)), and a payer’s provider need not apply strong customer authentication to each recurring credit transfer, including transfers of varying amounts, that it initiates at the payee’s request under an agreement the payer has authenticated (Article 85a). Where the same data is available both under the Regulation and through a scheme, access under the Regulation must remain possible without joining the scheme (Article 34(2)). Account providers must also offer a dedicated interface (Article 35) and a dashboard through which users can monitor and withdraw their consents (Article 43). HM Treasury proposes a statutory right of access for variable recurring payments that need not be free, an FCA power to decide whether access that is free today should move to a commercial basis, and FCA powers to require centralised pricing within commercial schemes. It also asked whether the ban on requiring a contract should be lifted.
HM Treasury and the EU co-legislators would both bring stablecoins within payments regulation, by different routes. Under the agreed EU Regulation, electronic money tokens, which the Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114) deems to be electronic money, would be included in the definition of funds (Article 3(30) and recital 29), while certain trading and exchange activity by crypto-asset service providers would be excluded (recital 29a); under PSD3, issuers of electronic money tokens that are not credit institutions would be authorised as payment institutions (recital 6). HM Treasury proposes to bring UK-issued qualifying stablecoins within the payments perimeter, and may in future extend that approach to stablecoins from an overseas jurisdiction whose regime it formally recognises (paragraph 3.12).
The EU co-legislators also agreed fraud measures that have no counterpart among HM Treasury’s proposals. Under the agreed Regulation, checking of the payee’s name against the account identifier would extend to all credit transfers (Article 50). Where any provider’s failure to carry out that check results in a defectively executed transfer, the payer’s provider would have to refund the payer, with a right to compensation from the payee’s provider or the payment initiation service provider where the failure was theirs (Article 57). A provider would have to refund in full a consumer who was manipulated by a third party pretending to be that provider and using communication channels attributed to it, where the consumer notifies the provider without undue delay and reports the fraud to the police, unless the consumer acted fraudulently or with gross negligence (Article 59). HM Treasury asks separately about sector risk and the accountability of senior managers (questions 18 to 20). In the UK, the Payment Systems Regulator requires reimbursement of authorised push payment fraud over Faster Payments under its Specific Direction 20, which HM Treasury’s consultation does not address.
| Subject | HM Treasury proposals (UK) | Agreed EU texts (PSR and PSD3) |
|---|---|---|
| Status | Consultation closed 6 October 2026; implementation by secondary legislation | Provisional agreement November 2025; committee approval May 2026; not yet adopted |
| Where the detailed rules are made | Perimeter and key definitions in legislation; delegation of more detailed requirements to FCA rules under consideration | Directly applicable Regulation for conduct; Directive for authorisation and supervision |
| Electronic money | Issuing electronic money kept as a regulated activity; authorisation model not addressed | Issuing electronic money becomes a payment service; single authorisation for payment institutions replaces the separate regime for electronic money institutions |
| Access to accounts for open banking | Existing rights of access kept; FCA to decide whether free access should move to a commercial basis; ban on requiring a contract under review | No contract may be required (Article 34); recitals record that access has been without charge and should stay so (recital 55); dedicated interface and consent dashboard required |
| Variable recurring payments | New statutory right of access, not required to be free except for sweeping; centralised pricing within commercial schemes | No right of access; scheduling future variable recurring payments cited as a possible paid premium service (recital 56); recurring credit transfers at the payee’s request, including variable amounts, exempt from strong customer authentication (Article 85a) |
| Stablecoins | UK-issued qualifying stablecoins in the payments perimeter; possible future extension to stablecoins from a recognised overseas jurisdiction | Electronic money tokens treated as electronic money and included in funds, with exclusions for trading activity |
| Payee name checks and impersonation fraud | No proposals; general questions on sector risk (questions 18 to 20) | Name check for all credit transfers; refund where a fraudster impersonates the consumer’s provider |
| Strong customer authentication | Provisions in the PSRs to be revoked so the FCA can make outcomes-based rules | Kept in the Regulation (Article 85) |
The wider relationship between the two regimes is set out in the note on PSD3 and the UK.
What happens next
The RPIB has said that it will publish a summary of responses and outline next steps in the high-level design phase, and that DeliveryCo will take forward the high-level design later in 2026. HM Treasury has said that it will set out further detail on implementation after the consultation and that changes to existing regulation will be made by secondary legislation. As at 7 October 2026 neither body had published its response. The RPIB proposals are set out in more detail in the notes on the next-generation retail payments infrastructure and on product level arrangements.
Frequently asked questions
When did the two consultations close?
The RPIB consultation closed on 11 September 2026. The HM Treasury consultation closed at 11:59pm on 6 October 2026, after 12 weeks. As at 7 October 2026 neither body had published a response.
Does HM Treasury propose to make access for variable recurring payments free?
HM Treasury intends to establish a new right of access for variable recurring payments and states that access under it will not be required to be provided free of charge, except for sweeping between a customer’s own accounts. It also intends the FCA to be able to decide whether access that is free today under the PSRs and the CMA Order should move to a commercial basis.
Will the next-generation infrastructure change consumer protection or reimbursement rules?
The RPIB states that the core infrastructure would not create a new consumer protection regime or redefine liability or reimbursement models, and that its role would be to ensure the relevant protections can be applied as new payment journeys emerge. The RPIB asked in question 18 which consumer protection and fraud-related capabilities should be prioritised for inclusion in the core.
