Payments View – June 2026

Payments View – June 2026

Welcome back to Payments View – and firstly congratulations to all UK readers on surviving the heat. A key update this month is news that the Bank of England has published its policy statement and draft Code of Practice for systemic stablecoin issuers. This edition also includes updates on:

• The FS&M Bill's progress through committee stage
• RPIB Consults on Next-Gen Payments Infrastructure
• The launch of the first commercial VRP scheme
• Government's continued focus on Agentic AI
• Consultation on monitoring of business relationships under the AMLR
• Money Laundering Amendment Regulations 2026
• The Bank of England's systemic stablecoin regime

As always, don't hesitate to reach out to us if you would like to discuss any of the developments in this edition.

Financial Services and Markets Bill Continues Progress

While not quite as exciting as tracking the progress of PSD3 from a European perspective, we wanted to provide a brief update on the Financial Services and Markets (FS&M) Bill 2026-27 which continues its Parliamentary journey. As we covered in our May edition, the King's Speech confirmed the Bill's introduction, and it has now completed its second reading in the House of Lords. Committee stage began on 22 June, with Royal Assent expected in late 2026 or early 2027.

The Bill's core payments provisions, the integration of the Payment Systems Regulator (PSR) into the FCA, and Financial Ombudsman Service (FOS) reform, remain on track. In addition, firms tracking the Senior Managers and Certification Regime, will be aware of the significant streamlining of the regime – although it is still not being expanded to also apply to payments firms (despite the FCA’s long-held preference for this).

However, the legislative process is not without friction as the House of Lords Financial Services Regulation Committee has published a letter to Lord Stockwood, Minister for Investment, raising concerns that elements of the Bill could weaken regulators' accountability – a theme that is likely to surface repeatedly during committee stage.

For payments firms, the key question remains how the PSR's functions will operate once integrated into the FCA. HMT confirmed in its April consultation response that the integration will use the Financial Services and Markets Act 2000 (FSMA) framework as far as practicable, with a designation regime retained for bringing payment systems into and out of scope, and existing PSR requirements transferred via transitional provisions.

RPIB Consults on Next-Gen Payments Infrastructure

The Retail Payments Infrastructure Board (“RPIB”), chaired by the Bank of England has published its consultation on the design of the UK’s next-generation retail payments infrastructure which sets out the proposed future of UK payment systems following the shelving of the New Payments Architecture. The consultation sets out the types of payments the new infrastructure should support, the design principles that should guide its development, and how the core clearing and messaging infrastructure fits within the broader payments ecosystem. With responses due by 11 September 2026, this is one that payments firms across the market will want to engage with.

As readers of Payments View will know, the Payments Vision Delivery Committee (“PVDC”) published its strategy for the future retail payments infrastructure late last year, establishing five high-level strategic outcomes that the RPIB has now been tasked with translating into a concrete design. That design will ultimately be handed to the newly formed Delivery Company – an industry-led entity responsible for the development of a high-level design for the core infrastructure.

The consultation is structured around three complementary perspectives – future payment journeys, design principles, and the wider payments ecosystem. We think the former is the most interesting at this stage with useful confirmations of the types of transactions that the new infrastructure is intending to support. We’ve set out the key points below:

• Existing functionality: The new infrastructure will retain and improve existing Faster Payments and Bacs capabilities – immediate transfers, salary payments, recurring transactions and batch processing.
• Account-to-account payments at the point of sale: This is one of the headline propositions. Consumers will be able to pay merchants directly from their bank accounts at physical and online checkouts, with an immediate confirmation showing whether the transaction has been accepted or declined.
• Alias-based payments: Payments could be initiated using a proxy identifier – such as a phone number or email address – removing the need for payers to enter a sort code and account number. If this sounds familiar, it should and readers with long(ish) memories will remember Paym – a similar mobile payments service that quietly shut down by Pay.UK in March 2023 after failing to gain meaningful traction. A lot has changed on alias-based payments since then however, particularly with the recent focus on Wero in Europe (with interest in Wero itself being driven by a European push to establish credible alternatives to US-based card schemes and other systems).
• Delegated and agentic payments: The infrastructure will support payments made by an authorised person / AI agent on behalf of the account holder, with specified parameters and conditions. This connects directly to HMG’s emerging agentic payments agenda and the Chancellor’s focus on AI-powered payments.
• Programmable and conditional payments: Transactions governed by pre-agreed conditions, including deferred payments that can be queued during temporary loss of connectivity and executed once the connection is restored.
• Multi-money ecosystem: In perhaps the most forward-looking proposal the infrastructure will need to support payments involving different forms of money. The consultation contemplates scenarios where a payer uses a ‘regulated’ stablecoin to send funds to a recipient who receives them as commercial bank money, all processed through the same core infrastructure. The digital pound is also referenced, although the BoE and Treasury have yet to commit to its introduction.
• Enhanced cross-border payments: Faster, cheaper and more transparent cross-border transactions, building on the infrastructure’s domestic capabilities.

So what should firms be thinking about? At this stage, these are proposals and obviously do not represent final design decisions. However, the direction of travel is clear, and the payments journeys outlined in the paper have real implications for how firms plan their infrastructure investment, product roadmaps and competitive strategies over the medium term. Firms with views on the design choices – particularly around interoperability, the multi-money ecosystem and the scope of the new payment journeys – should seriously consider responding ahead of 11 September 2026.

We have been tracking the RPIB’s work closely and will continue to cover key developments as the high-level design takes shape. If you would like to discuss the consultation, its implications for your business, or how to structure a response, do get in touch.

UKPI Launches the First Commercial VRP Scheme

In another launch focused on driving innovation in the UK payments industry, UKPI officially launched the first commercial variable recurring payments (cVRP) scheme earlier this month.

The scheme establishes a shared rulebook, commercial model, and operational standards for flexible, automated account-to-account payments. This is distinct from the existing sweeping VRPs and opens the door to recurring payments across different providers – subscriptions, utility bills, regular investments, and more – without the need for card rails or Direct Debits.

The FCA has confirmed that it expects additional schemes to emerge and has reiterated plans to consult on a long-term regulatory framework for open banking by the end of 2026, subject to the government legislating to provide the necessary powers through the FS&M Bill. The FCA and PSR joint steering committee continues to oversee progress alongside industry.

As we have covered in previous editions, VRPs have been a running story in Payments View and the launch of a commercial scheme is a great milestone.

Government's Continued Focus on Agentic AI

Chancellor Rachel Reeves’ recent speech at the AI Adoption Summit continues to keep ‘agentic’ payments (transactions initiated and executed autonomously by AI agents on behalf of consumers and businesses) firmly on the policy agenda, with her comments highlighting the potential importance of the technology to the government and the UK payments industry.

The concept is deceptively simple: as AI agents grow more capable, they will increasingly be able to authorise payments on your behalf – booking your train, paying for your hotel and settling your restaurant bill, all without you reaching for your wallet. The regulatory questions are rather less simple: liability allocation, consumer consent frameworks and fraud prevention, amongst others.

Detail is quite light at this stage (the Chancellor’s speech was as much focused on wider AI developments and investment) so while we see this as a key trend for Payments View, it may be some time before the practical implications for the regime become clear.

In the meantime, we thought we’d end this update with some of the ‘cutting edge’ headlines that our very own ‘agentic AI’ kindly suggested for this update:

• The Rise of the Machines (that Pay for Things): Agentic Payments
• I, Robot, Would Like to Split the Bill
• HAL 9000 Opens His Wallet: Agentic Payments Hit the Agenda
• Do Androids Dream of Direct Debits?
• Ex Machina, Ex Wallet
• Agentic Payments – Pay Up, Skynet

Glad to see that our jobs are safe (at least on the comedy headline front) for just a while longer.

Key Updates for your MLRO

There are a number of interesting AML developments to flag this month.

On the EU side, AMLA has published a consultation on draft guidelines for ongoing monitoring of business relationships under the AMLR, covering CDD review triggers and transaction monitoring frameworks – responses are due by 3 September 2026. AMLA has also published a consultation on draft regulatory technical standards for home-host supervisory co-operation under MLD6.

On the UK side, the Money Laundering Amendment Regulations 2026 (SI 2026/621) are in force from 30 June 2026, bringing updated CDD and EDD requirements for cryptoasset businesses (with crypto correspondent relationship provisions effective from February 2027), refreshed pooled account and high-risk third country definitions, and the replacement of euro references with sterling throughout the MLRs. In addition the FCA has published its findings from its review of firms' financial and trade sanctions systems and controls, covering proactive and reactive casework since September 2023.

If you would like to discuss any of these developments, please get in touch.

A ‘Stablecoin’ for Your Thoughts? The Bank of England's Systemic Stablecoin Regime

The Bank of England has published its policy statement and draft Code of Practice for systemic stablecoin issuers – being those that are widely used in payments and may therefore pose risks to UK financial stability that will be regulated jointly by the Bank and the FCA, once recognised by HMT. Beyond this, the FCA will regulate the issuance, custody and admission to trading of UK-issued qualifying stablecoins and, in future, their use in payments, including for non-systemic stablecoins. In addition, the BoE has also published an approach document on their joint regulation of systemic stablecoin issuers.

Our sister publication, Crypto View, is working through these publications in detail (as well as the avalanche of crypto policy statements) but in the meantime we wanted to flag the following key points on the stablecoin regime:

• Revision to a 70/30 backing asset composition: 70% short-term UK government debt and 30% central bank deposits.
• Deposits at the central bank will remain unremunerated and, similarly, the Bank has retained its policy position that systemic stablecoins should not pay interest to coinholders.
• Commercial bank deposits will not be permitted due to financial and operational risks, and the contagion risks this would create between stablecoins and the wider financial sector.
• From holding limits to issuance guardrails. This is perhaps the most consequential change from the consultation where the Bank has dropped the proposed temporary holding limits entirely in favour of a temporary issuance guardrail initially set at £40 billion per systemic stablecoin. The guardrail will be reviewed regularly and removed once the risks to credit provision have been addressed.
• On trust arrangements, the Bank has confirmed there will be two trusts, one to protect coinholders’ holdings and the other to ensure an orderly wind down and return those holdings. HMT has agreed to introduce legislation to give the Bank enabling powers for statutory trusts.

All of this makes particularly interesting reading in light of the earlier report from the Financial Services Regulation Committee which identified a large number of these issues as critical to the future regulation of stablecoins in the UK.

News Flash

• HMT access to banking review. HMT has launched an independent review of access to face-to-face banking services, chaired by former FCA interim Chair Richard Lloyd. The review will assess harm from branch closures, identify affected groups, and report by October 2026. The FS&M Bill will include powers for HMT to act if evidence supports intervention.

• FCA Emerging Technology Horizon Scan. The FCA has published its first external Emerging Technology Horizon Scan, identifying four key trends: the convergence of emerging technologies, personalised intelligence, synthetic crime, and – of particular relevance to Payments View readers – programmable finance (DLT, tokenisation, CBDCs, stablecoins, and smart contracts). We think it’s actually quite interesting; a great holiday read.