The Financial Conduct Authority (“FCA”) has published its 2026 Regulatory Priorities for Payment’s report, replacing the previous Dear CEO and portfolio letter approach with a single annual publication for the sector.
The report applies to firms authorised or registered under the Payment Services Regulations 2017 (“PSRs”) and the Electronic Money Regulations 2011 (“EMRs”), including payment institutions, electronic money institutions, AISPs and PISPs.
The overall message from the FCA is clear: firms that can demonstrate strong governance, effective controls and positive customer outcomes should expect a more proportionate supervisory relationship, while firms creating consumer or market harm are likely to face quicker and more assertive intervention.
Innovation, Open Banking and Regulatory Reform
The FCA continues to position the UK payments sector as a key area for innovation and growth. Open banking remains a major priority, alongside work on stablecoins, tokenised payments and broader reform of the existing PSR and EMR framework.
The regulator is also beginning to explore how emerging technologies, including AI-enabled or “agentic” payments, may fit within future regulation.
For firms operating in the sector, this means regulatory change is unlikely to slow down. Businesses that actively monitor developments, engage with consultations and build adaptable governance frameworks will be in a stronger position to capitalise on future opportunities.
Consumer Duty and Customer Outcomes
Although the FCA has acknowledged progress in some areas of Consumer Duty implementation, it is clear that many firms still have work to do.
Two areas receiving particular attention are international payment pricing transparency and the treatment of vulnerable customers. The FCA expects firms to be able to demonstrate that customers fully understand the costs associated with payment services, particularly in cross-border transactions involving FX margins and fees.
More broadly, the regulator continues to emphasise that Consumer Duty is not a one-off compliance exercise. Firms are expected to continually assess whether products, communications and customer journeys are delivering fair outcomes in practice.
Financial Crime, Fraud and Operational Resilience
Financial crime prevention remains a central regulatory concern, particularly in relation to money laundering and Authorised Push Payment (“APP”) fraud.
The FCA has also signalled increased focus on operational resilience, incident reporting and third-party risk management. A forthcoming joint policy statement from the FCA, the Bank of England and the Prudential Regulation Authority is expected to introduce additional reporting obligations for operational incidents and critical third parties.
Importantly, the FCA has noted that weak financial crime frameworks and concerns around Senior Management competence continue to be common reasons for authorisation delays or refusals.
Firms should therefore ensure that AML governance, second-line oversight, MLRO resourcing and operational resilience frameworks are not only documented appropriately but are also genuinely effective in practice.
Safeguarding Remains a Critical Priority
The introduction of the Safeguarding Supplementary Regime in May 2026 represents one of the most significant upcoming regulatory changes for payments and e-money firms.
The FCA has made clear that safeguarding expectations are increasing substantially, particularly around governance, reconciliations, audit readiness and wind-down planning. The regulator has also warned firms to expect a rise in adverse safeguarding audit opinions as standards tighten across the sector.
This heightened focus reflects the rapid growth in safeguarded funds held by the sector in recent years, with both EMIs and PIs now safeguarding significantly larger sums than in previous periods.
Firms that begin implementation planning early and carry out detailed reviews of their safeguarding arrangements are likely to be far better prepared once the new regime takes effect.
How Complyport Can Help
Complyport works with payment institutions, e-money institutions and fintech firms across a wide range of regulatory and compliance matters connected to the FCA’s 2026 priorities.
Our support includes:
- AML and financial crime advisory services;
- Consumer Duty reviews;
- Safeguarding framework assessments;
- Operational resilience projects;
- Governance reviews;
- Regulatory authorisation support;
- Ongoing compliance oversight.
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