The European Banking Authority (EBA), the European Central Bank (ECB), national central banks (NCBs), and national supervisory authorities (NSAs) across the EEA have signed a Memorandum of Understanding (MoU). The MoU aims to enhance cooperation and information sharing to support non-bank payment service providers' (NB-PSPs) access to central bank operated payment systems. The MoU sets out clear principles for collaboration to achieve three clear objectives: (i) to establish cooperation between NSAs and NCBs in the EEA for the exchange of information to support NCBs in their assessment of the compliance of NB-PSPs with requirements for granting access to central bank-operated payment systems in the EU; (ii) to establish procedures in a cross-border scenario for the NCB operating the payment system in the host member state to notify the NSA of the home member state about the NB-PSP' application and the NCB's decision regarding its participation; and (iii) to harmonise the processes and procedures across the EEA for the exchange of information between NSAs and NCBs, to the extent possible, by specifying the types of information to be shared, the timing and means of such exchange.

The European Banking Authority (EBA) has published a letter sent to the European Commission (EC) with the outcome of its EU AI Act mapping exercise. In January 2025, the EBA established a dedicated workstream to map the requirements on high-risk AI systems under the EU AI Act against relevant provisions in EU banking and payments regulation, with a focus on the use of AI for creditworthiness and credit scoring. The EBA confirms that, although the EU AI Act identifies overlaps between some requirements on high-risk AI systems and EU financial sector law and envisages targeted derogations and other ways to address this (such as integration or combination of requirements), it does not envisage such derogations for other requirements on high-risk AI systems (e.g. human oversight, data governance, cybersecurity) which are already widely regulated under EU financial services law.

The EBA highlights that the Digital Operational Resilience Act framework extensively covers the cybersecurity and business continuity requirements set out in the EU AI Act and that the Capital Requirements Regulation and Capital Requirements Directive IV requirements already provide a comprehensive and technology-neutral governance and risk management framework that can be applied to supervising the use of AI tools. The EBA sets out in an annex to its letter, a table identifying how EU financial services law already addresses relevant EU AI Act requirements. The EBA believes the table will be useful to the EC when producing the guidelines under Article 96(1)(e) of the EU AI Act on the interplay between the EU AI Act and EU financial services law and managing any regulatory overlaps.

The UK Financial Conduct Authority (FCA) and the UK Payments Systems Regulator (PSR) have published a joint update on the delivery of commercial variable recurring payments (cVRPs) as part of their open banking work. VRPs are an open banking technology that allow users to securely authorise trusted third parties to manage recurring transactions. The summary report highlights significant progress in 2025, with VRPs now accounting for 16% of open banking transactions, with much of the growth occurring through 'sweeping VRPs'. The FCA has been working with industry to advance VRPs for broader commercial use, in line with the National Payments Vision to build a competitive UK open banking market and accelerate rollout to 'phase 1' use cases. This year, 31 firms came together to establish a new UK Payments Initiative (UKPI) to drive VRP adoption for 'phase 1' use cases, including utilities, financial services, and government payments. Market momentum is growing, with additional players developing VRP schemes and transaction testing already in progress. In relation to UKPI, industry has agreed on a first-phase commercial model and the FCA expects the first live payments under the UKPI scheme will take place in the first quarter of 2026.

By the end of 2026, the FCA will assess industry-led cVRP growth and incorporate lessons from phase 1 into a long-term regulatory framework, developed in collaboration with HM Treasury (HMT). HMT is expected to introduce legislation in 2026 granting the FCA new powers to set open banking rules, and the FCA intends to consult on new rules for the long-term regulatory framework before the end of the year. The framework will be the foundation for expanding cVRPs into e-commerce and wider use cases.

The UK Financial Conduct Authority (FCA) and UK Payments Systems Regulator (PSR) have issued a joint letter to HM Treasury (HMT) (dated 11 November) providing an update on their progress against the 2024 recommendations HMT set for payments regulation and outlining focus areas through to 2026.

Key forward-looking priorities include:

• Co-ordination - the regulators set out how they have been working in an increasingly collaborative way to ease congestion in payments regulation.
• Open banking and open finance – the FCA has established a new department incorporating FCA and PSR capabilities, replacing the Joint Regulatory Oversight Committee (JROC) and streamlining decision-making for open banking and open finance. The FCA is working with industry to establish a future entity for open banking ahead of developing the statutory instrument with HMT and subsequently the long-term regulatory framework for open banking. In addition, the FCA has launched the smart data accelerator, with applications currently open for two prioritised open finance use cases in SME lending and mortgages. The FCA will publish a roadmap for this in early 2026, with regulatory foundations in place during 2027. The FCA is also collaborating with the Department for Business and Trade on cross-sector data sharing.

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The European Banking Authority (EBA) and the European Central bank (ECB) have published their joint 2025 report examining payment fraud trends across the EU/EEA from H1 2022 to H2 2024. The report confirms that strong customer authentication (SCA), mandated under the revised Payment Services Directive since 2020, remains effective in reducing fraud, particularly for card payments. However, overall fraud losses rose to EUR4.2 billion in 2024 (up from EUR3.5bn in 2023). Credit transfer fraud accounted for EUR2.2bn, while card payment fraud reached EUR1.3bn, with losses significantly higher for transactions outside the EEA where SCA is not required. The EBA and ECB stress the need for adaptive security measures and continued monitoring to address evolving fraud risks. For more information, you may like to read our blog post "Key takeaways from the EBA and ECB joint 2025 report on payment fraud".

The UK National Audit Office (NAO) has published its report on the Bank of England's (BoE) Real-Time Gross Settlement (RTGS) renewal programme. The RTGS is a core part of the UK's financial infrastructure, and the Bank of England launched the renewed system in April. The report, accompanied by a summary, examines whether the BoE managed the programme effectively to achieve a new system resilient to future developments and risks, and whether it identified wider learning from the programme. The NAO concludes that the BoE demonstrated good practice in digital transformation and risk management, with delays limited to 18 months and cost increases deemed reasonable given the programme's complexity. With the new RTGS now operational, the BoE plans to improve functionality over the next two to three years and will need to set long-term priorities to maintain and improve the system.

The NAO recommends the BoE:

• Applies lessons learned across other digital and business transformation projects.
• Sets clear plans for ongoing investment and resourcing to keep the RTGS and supporting services up to date.
• Understands and manages the impact of higher levels of change on RTGS users.
• Assesses the effectiveness of its interventions to widen access and reduce barriers, ensuring the best mix is in place.

The European Banking Authority (EBA) has published a single rulebook Q&A relating to the revised Payment Services Directive (PSD2). The Q&A addresses whether, under Article 68(1) of PSD2, a payment service provider (PSP) may impose general spending limits, daily or per transaction, for payment transactions initiated through specific channels (e.g., mobile banking) to mitigate fraud risk. The question also explores whether PSPs can apply different limits for domestic versus cross-border payments within the EU and whether PSPs are obliged to increase such limits upon a payment service user's (PSU) request for regular credit transfers. Additionally, the query considers the interaction between PSD2 and the Instant Payments Regulation (EU) 2024/886, particularly regarding PSU rights to set or modify limits for instant credit transfers in euro.

The Financial Services Regulatory Initiatives Forum has published the ninth edition of the Regulatory Initiatives Grid. This sets out the regulatory pipeline for the next two years, outlining 124 live initiatives which is a 13% reduction since the last grid was published. Key priorities include implementing Basel 3.1 standards, advancing the strong and simple prudential framework and reforms to the prospectus regime and wholesale markets review. Innovation-focused measures cover stablecoin regulation, the national payments vision, and development of a UK captive insurance regime, while consumer-focused reforms include the advice guidance boundary review and regulation of buy now pay later products. The Grid also highlights efforts to streamline regulatory processes, with 45 joint initiatives across sectors, and provides indicative timelines for consultations and implementation through 2027. Separate press releases announcing the Grid have also been published by the UK Financial Conduct Authority and the Bank of England.

The UK Financial Conduct Authority (FCA) has sent a letter to the Prime Minister providing an update on its growth strategy. It confirms delivery of most of the 50 pro-growth measures announced in January and outlines plans for 2026. The plans include finalising rules on stablecoins, setting out the delivery plan for open finance, reforming rules for venture capital and alternative investment fund managers and further speeding up IPO applications. The FCA also cites its plans to further overhaul mortgage rules so more people get on the housing ladder and is preparing for its expanded remit as anti-money laundering supervisor and integration of the UK Payments Systems Regulator. The letter highlights active support for firms digitising, with 31 already testing AI use cases, and commits to enabling tokenisation in asset management to drive efficiency and competition. The FCA also urges swift progress on digital ID to streamline know your customer requirements and calls for faster legislation to maintain reform momentum, including modernising the Consumer Credit Act. Finally, the FCA will use its convening power to galvanise system-wide responses to cross-cutting issues such as financial inclusion and mobilising defence investment to protect national and economic security.

The European Banking Authority (EBA) has published a follow-up peer review report on the authorisation of payment institutions (PIs) and electronic money institutions (EMIs) under the revised Payment Services Directive (PSD2). The review assessed actions taken by 29 national competent authorities (NCAs) following the 2023 report to address recommendations on authorisation processes, implementation of the EBA guidelines on authorisation, governance, AML/CFT controls, and local substance. While most NCAs improved efficiency through clearer guidance, pre-application engagement, and streamlined procedures, authorisation timelines remain highly divergent, ranging from 4-6 months to 27 months in one member state, with a median of 9.5 months (counting from the date of submission of an application). Delays are attributed to incomplete or low-quality applications and the time applicants take to address deficiencies.

While several supervisors have addressed previously identified deficiencies in the implementation of the EBA guidelines, notably on business plan assessments and AML/CFT controls, some gaps remain and in the assessment of local substance, creating risks of regulatory arbitrage. Therefore, despite notable improvements and a general move towards convergence, further efforts are needed. The EBA calls for further convergence to ensure a level playing field and robust supervisory practices across the EU.

The European Commission (EC) has published a Communication to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions on further development of capital market integration and supervision within the Union, announcing a set of major legislative reforms. The package seeks to address obstacles to innovation and barriers to integration resulting from divergent rules, duplicative requirements and inconsistent supervision. The EC proposes a suite of amendments to key EU financial services and capital markets legislation in a package described as a central component of the savings and investments union (SIU), specifically a:

• Regulation which will amend: (i) the European Securities and Markets Authority (ESMA) Regulation; (ii) the European Markets Infrastructure Regulation (EMIR); (iii) the Markets in Financial Instruments Regulation (MIFIR); (iv) the Central Securities Depositories Regulation (CSDR); (v) the Distributed Ledger technology Pilot Regulation (DLTPR); (vi) the Markets in cryptoasset Regulation (MiCAR); and (vi) the Cross-Border Distribution of Funds Regulation (CBDR). It also includes targeted amendments, in line with the changes proposed to the ESMA regulation aimed at making EU supervision more efficient, to: (a) the Central Counterparties Recovery and Resolution Regulation (CCPRRR); (b) the Securities Financing Transactions Regulation (SFTR); (c) the Credit Ratings Agency Regulation (CRAR); (d) the Benchmark Regulation (BMR); (e) the simple, transparent and standardised (STS) securitisation Regulation; (f) the European Green Bond Regulation (EuGB Regulation); (g) the Environmental, Social and Governance (ESG) rating Regulation.

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The UK Financial Conduct Authority (FCA) has published an update on its forthcoming review of the access to cash regime. The regime, introduced under the Financial Services and Markets Act 2023, seeks to maintain responsible provision of cash access services to consumers and businesses. The FCA expects to begin its review in Q4 2026 and publish findings in Q2 2027. While the exact scope and methodology will be determined closer to the time, the review will assess compliance, costs to firms and the regime's effectiveness in preventing gaps in cash access. It will include quantitative analysis and evaluation of indicators such as consumer sentiment and cash coverage data, alongside stakeholder engagement.

The Council of the EU and the European Parliament have announced a provisional political agreement on the EU payments package. While the final texts of the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) are not yet available, press releases indicate that negotiations centred on three key areas: fraud prevention, transparency and open banking. For further details, you may like to read our blog post "European Council and Parliament reach provisional agreement on EU Payments Package".

The UK Financial Conduct Authority (FCA) has published a new webpage announcing the launch of a special stablecoins cohort within its Regulatory Sandbox for firms issuing stablecoins. This will enable UK firms planning to issue stablecoins to test products under the UK's evolving regulatory regime. The cohort supports innovation in financial services and complements projects such as the Digital Securities Sandbox. For a successful application, firms must demonstrate: (i) clear readiness to begin testing; (ii) hold appropriate permissions and resources; (iii) prepare a well-aligned test plan consistent with the recent FCA stablecoin issuance consultation paper CP25/14; and (iv) include as much detail as possible. Applications close on 18 January 2026. Successful participants will be notified by the FCA, and feedback will be provided to unsuccessful applicants.

The European Banking Authority (EBA) has published a fact sheet summarising the findings from its 2025 mapping exercise on the interaction between the EU AI Act (Regulation EU 2024/1689) and existing banking and payments legislation. This includes the Capital Requirements Regulation (575/2013), the Consumer Credit Directive (2008/48/EC), the Mortgage Credit Directive (2014/17/EU) and the Payment Services Directive ((EU) 2015/2366). The EBA's key findings include: (i) no significant contradictions have been found between the AI Act and EU banking and payment legislation; (ii) the AI Act is complementary to EU banking and payment sector legislation, which already provides a comprehensive framework to manage risks. However, some efforts may be required by banks and other financial institutions to integrate the two frameworks effectively; and (iii) the co-existence of multiple authorities supervising financial entities' compliance highlights the importance of supervisory cooperation to ensure effective implementation of the AI Act.

The EBA also concludes that no immediate changes to its guidelines or new EBA guidelines are planned. Instead, the EBA will follow up with actions to contribute to a common supervisory approach to supervisory cooperation and implementation of sectoral requirements alongside AI Act requirements. The EBA will undertake specific activities in 2026–2027 to support the implementation of the AI Act in the EU banking and payments sector by: promoting common supervisory approaches and cooperation among national competent authorities responsible for financial sector supervision and market surveillance authorities; and providing input to the AI office, as appropriate, and participating in discussions of the AI Board Subgroup on Financial Services.

The UK Payments System Regulator (PSR) has published a compliance report on Specific Direction 17 which mandated the implementation of its name checking service, Confirmation of Payee (CoP), by UK payment service providers (PSPs) to prevent misdirected and fraudulent payments. PSPs were divided into two groups subject to different implementation timelines: Group 1 PSPs were required to implement CoP by 31 October 2023; and Group 2 PSPs by 31 October 2024. The report shows compliance is strong, with over 320 organisations now offering CoP checks. While most firms have met deadlines, the PSR opened enforcement investigations into a few non-compliant PSPs, including three Group 2 firms that missed the deadline and one ongoing case from Group 1. Directed firms are reminded of their obligations under General Direction 1 to maintain transparency regarding a PSPs ability to comply with PSR requirements, proactively communicate with the PSR if deadlines are missed or expected to be missed, plan regulatory changes early and ensure compliance before launching new services.

The Financial Stability Board (FSB) has published a letter from the FSB's Chair, Andrew Bailey, addressed to G20 leaders. The letter urges G20 leaders to accelerate efforts to modernise financial regulation while safeguarding stability, citing significant gaps in reform implementation and a challenging economic outlook. The next phase of the FSB's work will look deeper into where full, timely and consistent implementation of global standards, such as Basel III, was not achieved.

The letter highlights the growing influence of non-bank financial intermediaries in global financial markets, now estimated at USD2 trillion globally, and stresses the need for robust monitoring to prevent systemic risks. It also calls for continued attention to national policy barriers to achieve the objectives of the G20 Roadmap for enhancing cross-border payments. With the rise of digital assets, the FSB calls on authorities to carefully consider how frameworks are designed to ensure they are effective, consistent, and supportive of safe innovation and notes that it will be equally important to consider how stablecoins can operate effectively and safely across borders. The FSB's work programme for the year ahead will include a focus on stablecoins and other forms of payment.

The Investment Association and the Investment Management Association of Singapore, in partnership with the UK Financial Conduct Authority (FCA) and Monetary Authority of Singapore (MAS), have released a joint report on challenges and opportunities in tokenised asset markets across the UK and Singapore. The report highlights an "adoption gap" between innovation in digital assets and investor requirements. It introduces a practical operational readiness checklist in section 4, to guide market participants looking to design and launch tokenised financial products.

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The Bank of England (BoE) has published a consultation paper outlining its proposed regulatory framework for sterling-denominated systemic stablecoins. Under the framework, HM Treasury (HMT) will determine which payment systems using stablecoins, and their service providers, are recognised as systemically important. Once designated, these entities will fall within the BoE's remit and be subject to its powers under the Banking Act 2009. The proposed regime does not cover stablecoins used for non-systemic purposes which are not widely used by individuals to make retail or business payments. These activities will remain under the supervision of the UK Financial Conduct Authority (FCA).The consultation builds on feedback to the 2023 discussion paper.

Key proposals include:

• Allowing issuers to hold up to 60% of backing assets in short-term sterling-denominated UK government debt, with the remaining 40% as unremunerated deposits at the BoE. Issuers deemed systemic at launch, or transitioning from the FCA regime, may initially hold up to 95% in short-term UK government debt to support viability during growth.

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The Payments Vision Delivery Committee (PVDC) has published its long-term strategy for the future UK retail payments infrastructure, building on the government's National Payments Vision. The PVDC, comprising HM Treasury, the Bank of England, the UK Financial Conduct Authority (FCA) and the UK Payments Systems Regulator, developed the strategy following the Mansion House 2025 announcement of a new model of public and private sector collaboration.

With user needs at its core, the strategy focuses on five high-level strategic outcomes: (i) greater choice of innovative, cost-effective payment options that meet consumers and business needs; (ii) interoperability across a multi-money ecosystem, including new and existing forms of digital money; (iii) strong protections against fraud and financial crime; (iv) fair, transparent and non-discriminatory access for participants to drive competition and innovation; and (v) operational and financial resilience of the payments ecosystem.

Governance and delivery oversight will be led by the newly established Retail Payments Infrastructure Board, alongside an industry-led Delivery Company responsible for implementing the design. Implementation is expected to span several years. The FCA confirms in a statement which has been published on the same day that the strategy will be followed by the "Payments Forward Plan", which will be a sequenced plan of future payments initiatives.

The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published two reports addressing financial market infrastructures' (FMIs) management of general business risks and losses.

The Level 3 assessment report reviews compliance with PFMI Principle 15 ("general business risk") across 34 FMIs based on work carried out in 2023–24. The report identifies six significant concerns highlighting clear challenges for FMIs' resilience to different types of risk that could result in general business losses. These include: (i) failure to consider general business risk when determining liquid net assets funded by equity (LNAFE); (ii) insufficient resources for recovery and wind-down plans; (iii) lack of additional LNAFE beyond participant default coverage; (iv) absence of recovery plans; (v) gaps in orderly wind-down planning; and (vi) no explicit plan for raising additional equity in case of capital shortfalls. In response, the CPMI and IOSCO has issued a consultative report proposing supplemental guidance to the PFMI. The guidance does not introduce new standards but elaborates on the existing PFMI principles. It clarifies the scope of general business risk and its interaction with other principles, and provides guidance on identifying, monitoring and managing general business risks; determining the minimum amount of LNAFE; and governance and transparency. The guidance also considers the findings from the Level 3 assessment report. The deadline for comments is 6 February 2026.

HM Treasury (HMT) has released its financial inclusion strategy, outlining a comprehensive national plan to remove barriers to financial participation and to build financial resilience. The strategy focuses on six main areas: (i) improving digital inclusion and access to banking through the roll-out of 350 in-person banking hubs and the launch of a pilot scheme enabling the opening of a bank account without standard ID; (ii) supporting savings by delivering regulatory clarity to enable employers to offer workplace savings schemes with confidence and driving uptake of the government's Help to Save scheme; (iii) ensuring the insurance market is supporting the financial wellbeing of households and vulnerable customers; (iv) increasing access to affordable credit; (v) strengthening debt advice provision; and (vi) introducing compulsory financial education in primary schools. HMT will review the strategy's implementation progress two years after publication and provide an update thereafter.

The Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025 has been laid before Parliament, accompanied by an explanatory memorandum. A draft was laid before Parliament in June. The Order amends the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025 (the 2025 Order) which provides for certain buy-now-pay-later (BNPL) agreements to become "regulated deferred payment credit agreements" with effect from 15 July 2026. Under article 3(2) of the 2025 Order, nearly all merchants brokering BNPL products are exempt from the regulatory requirements concerning credit broking by virtue of a new provision (article 36FB) in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). Generally, merchants who introduce customers to regulated credit products are undertaking the regulated activity of credit broking under article 36A of the RAO and must have regulatory approval, unless an exemption applies.

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The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published three draft reports proposing amendments to the European Commission's legislative package on the establishment of the digital euro. These proposals collectively aim to establish a comprehensive legal framework for the issuance, use and coexistence of the digital euro alongside physical cash. The first draft report (COM(2023)0369) proposes amendments to the proposed regulation establishing the digital euro as a central bank digital currency, detailing its governance and operational principles. Accompanying this, the second draft report (COM(2023)0368) proposes limited procedural amendments to the proposed regulation on the provision of digital euro services by payment service providers in Member States whose currency is not the euro. Finally, the third draft report (COM(2023)0364) proposes amendments to the proposed regulation on the legal tender status of euro banknotes and coins. This measure is designed to safeguard the mandatory acceptance of continued use of cash, ensuring it remains a viable payment option alongside the digital euro.

The European Central Bank Governing Council has announced its decision to move on to the next phase of the digital euro project in a letter to Aurore Lalucq, Chair of the European Parliament's ECON Committee. The announcement follows the successful completion of the two-year preparation phase launched in 2023, which laid the groundwork for issuing a digital euro. The digital euro is intended to complement cash by offering a secure, inclusive and resilient public digital payment solution across the euro area. The ECB states the final decision on whether to issue a digital euro, and when, will only be made once the relevant legislation has been adopted, which is expected by 2026. A pilot exercise and initial transactions could begin as early as mid-2027, with the ECB aiming to be technically prepared for a potential first issuance by 2029. Published alongside the announcement were: (i) a report on digital euro user research; (ii) a technical report focusing on the workstream led by the dedicated Euro Retail Payments Board; and (iii) an update from the Rulebook Development Group on the digital euro scheme.

The Bank of England (BoE) has published an update on the ongoing design phase of the digital pound, a proposed form of central bank digital currency intended to complement existing payment methods. While no decision has yet been made on its introduction, the focus over the past year has been on developing a detailed blueprint, supported by design notes and practical experimentation through the Digital Pound Lab. The blueprint is expected to be published in 2026.

This work aims to deepen understanding of how public money could operate within a multi-money system and will inform a joint, evidence-based assessment by the BoE and HM Treasury in 2026. In parallel, payment trends in the UK and internationally will continue to be monitored to support this assessment. If a decision is made to proceed, a digital pound would only be introduced following the passage of primary legislation by the UK Parliament. The BoE will continue targeted experiments and stakeholder engagement to explore what is viable and what may need to change.

The UK Financial Conduct Authority (FCA) and the UK Payment Systems Regulator (PSR) have published a joint response to HM Treasury's consultation on consolidating the PSR's functions within the FCA's legislative framework. Both regulators support the proposed integration, agreeing with the overarching approach to the consolidation, and believe that the proposed model enables a coherent and holistic view of regulatory issues that impact payment systems and payment services. Their response outlines work already completed as well as ongoing efforts to prepare for the transition. In terms of next steps, beyond development of the detailed legislation, and in the longer term, they consider that there may be aspects of the FSMA regime that may be appropriately adapted to payment systems regulation. There may also be further opportunities to review how the developing regime for the regulation of activities involving stablecoins or other crypto-assets fits together with the regulation of systems that use such technology to transfer funds. In the accompanying annex, the PSR and FCA set out their responses to the specific consultation questions. You may also like to read our opinion piece "UK Payment Systems Regulator to be abolished - what's next?" which explores key considerations and potential impact of the transition of the consolidation.

The UK Financial Conduct Authority (FCA) has published its findings from a multi-firm review assessing how UK payment service providers (PSPs) (including banks and other businesses offering payment accounts) detect and respond to romance fraud, a growing financial crime where victims are deceived into sending money to fraudsters who engineer false romantic relationships or friendships. The review covered 60 cases across six firms and the conclusions highlight examples of good practice and areas for improvement. Whilst some firms are leading the way with proactive engagement and compassionate support reflecting best practice, these examples were not consistent across the industry and it is clear that staff play a critical role in interventions. Equally, the review also examined the effectiveness of firms' systems and controls in detecting romance fraud, to avoid missed opportunities to detect suspicious activity, including transactions to overseas jurisdictions, multiple payments over a short period and sudden increases in the value of funds being sent.

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The Bank of England (BoE) has published the terms of participation for its upcoming Synchronisation Lab which will support the testing and refinement of a proposed synchronisation capability for the UK's renewed Real-Time Gross Settlement (RTGS) service, RT2. Synchronisation would allow for atomic settlement in central bank money: the conditional settlement of funds in RT2 against assets on a variety of external asset ledgers, meaning that funds in RT2 will settle if and only if the external asset also settles. The Lab is being launched as a platform to simulate the synchronisation interface enabling prospective synchronisation operators (Lab Participants), to develop and demonstrate viable propositions across multiple use cases.

The Lab is scheduled to launch in Spring 2026 and will run for approximately six months across four six-week testing and development phases. In each phase, Lab Participants will showcase end-to-end synchronised transaction flows and interact with synchronisation users. Lab findings will inform the design and delivery of a potential future live RT2 synchronisation capability. Participation is by invitation by the BoE and based on an application process. Technical onboarding will begin roughly one month before launch. Demonstrations and a final report summarising key learnings will follow the Lab's conclusion.

The European Banking Authority (EBA) has published a report on white labelling, accompanied by a fact sheet. In the report, the EBA considers the use of white labelling as a business model by the firms that are under its mandate, including credit institutions, e-money institutions, payment institutions, non-bank issuers of asset-referenced tokens and non-bank lenders. The report defines white labelling as a business model in which a financial institution (the provider) enters into an agreement with another entity (the partner, who may or may not be a financial institution) to distribute and offer one or more financial products and services under the partner's own brand only. The EBA finds that white labelling is being widely used, with 35% of surveyed banks employing the model to distribute a broad range of financial products and services, both domestically and cross-border, including account and payment services, credit provisioning and open banking services.

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The UK Payment Systems Regulator (PSR) has published consultation paper MR22/2.8 on a methodology for developing a price cap on multilateral interchange fees (MIFs) for UK-EEA card-not-present (CNP) outbound transactions. The PSR's 2024 final report found that interchange fees on UK-EEA CNP outbound transactions had increased to unduly high levels and were detrimental to UK merchants and consumers. The PSR proposes using the Merchant Indifference Test (MIT) as a starting point. The MIT assesses whether a merchant would refuse a card payment if they were certain that a customer who was about to pay at the cash register had an alternative means to pay. The test is passed if accepting the card does not increase the merchant's operating costs, therefore making the merchant indifferent between a card transaction and one using the alternative payment method. The PSR will decide on an appropriate cap based on the results of the MIT and on evidence of the impact of interchange fees on issuers' incentives and on competition between methods of payment.

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The Financial Stability Board (FSB) has published its consolidated progress report on the G20 Roadmap for Enhancing Cross-Border Payments. While notable policy milestones have been achieved since the roadmap's launch in 2020, the report highlights that these efforts have yet to yield meaningful improvements for end-users globally. Key performance indicators for 2025 show only a slight improvement since 2023, with improvements in the speed of wholesale payments and remittances, but challenges persist in cost reduction and transparency of information to end-users. The FSB notes it is unlikely for the global roadmap's targets to be met by 2027. The focus for the coming year will be on strengthening monitoring and supporting implementation of the international policies agreed under the G20 roadmap.

The UK Payments Systems Regulator has published findings of the impact of its authorised push payment (APP) scam reimbursement requirement policy, one year since its implementation. Between October 2024 and June, GBP112 million was reimbursed to victims, with 88% of claimed losses returned, an increase from 66% from the same period in the previous year. Firms resolved 97% of claims within 35 days, and 84% within five business days. Claim volumes fell, indicating improved fraud prevention by firms. However, purchase fraud continues to be a significant issue, accounting for nearly 60% of APP scam cases. The survey also reveals that awareness of the reimbursement policy is low, with 71% of victims unaware of it.

Commission Implementing Regulation 2025/1979 laying down implementing technical standards (ITS) under the Single Euro Payments Area Regulation or SEPA (Regulation (EU) No 260/2012) has been published in the Official Journal of the European Union. The Implementing Regulation introduces harmonised reporting templates, instructions and a methodology for payment service providers (PSPs) to report on charges related to credit transfers, instant credit transfers and payment accounts, as well as the share of rejected instant credit transfer transactions in a given year arising as a result of asset freezes. The Regulation enters into force on 26 October and is directly applicable across all Member States.

The European Banking Authority (EBA) has published its 2026 work programme, setting out its key priorities and planned initiatives. The programme is driven by three overarching priorities: (i) developing a rulebook to foster a resilient and efficient financial single market, with proposals to simplify rules, improve public sector coordination and assess the framework's impact. This includes continuing work on the EU banking package and advancing proposals on the forthcoming revised Payment Services Directive 3, the Payment Services Regulation and the Financial Data Access Act; (ii) strengthening risk assessment capabilities through improved data, methodologies and oversight under the Digital Operational Resilience Act (for critical ICT third-party providers), Markets in Crypto-Assets Regulation (for supervision of crypto-asset issuers) and European Market Infrastructure Regulation (for validation of initial margin models); and (iii) advancing innovation and technological capacity across the financial sector, with a focus on AI and machine learning, including its contribution to the implementation of the EU AI Act. In parallel, the EBA has published a report (EBA/REP/2025/26) proposing ways to streamline the EU's regulatory and supervisory framework, following a comprehensive review earlier this year of four key areas: level 2 and 3 measures, reporting burdens on financial institutions, the EBA's role in the prudential framework and its internal processes. The review resulted in 21 recommendations which are set out in the report.

The Bank of England (BoE) has published its consultation response and policy statement confirming the expansion of mandatory ISO 20022 enhanced data requirements for CHAPS payments, following its 2024 consultation. Following feedback, it confirms that effective from November 2027, mandatory Purpose Code requirements will apply to all CHAPS payments through channels within direct participants' (DPs) control. The new requirements will not extend to payment initiation channels outside DPs' control at this stage, however, the BoE does expect more payments to move into DPs' control as ISO 20022 adoption increases. DPs are expected to communicate CHAPS requirements to all parties to whom they provide CHAPS access and are encouraged to implement systematic controls and customer education programmes to ensure successful adoption. Pay.UK will apply a similar approach for Faster Payments DPs and will continue to collaborate with the BoE to encourage adoption and best usage practices. While changes to the LEI policy was not part of the consultation, the BoE received feedback on its the approach to including LEIs within ISO 20022 payment messages. In response, the BoE describes steps taken to enhance the stakeholder experience in conjunction with other organisations in the annex to the policy statement. The BoE remains committed to providing at least 18 months' notice for future changes and, in line with this, expects to provide an update by May 2026 on LEI and structured remittance expansions.

The European Commission (EC) has published its second report mandated under Article 27 of the Payments Account Directive 2014/92/EU (PAD), on assembling specific payment related data from Member States on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (PABFs). The EC highlights that the differences in data collection methods across Member States and that existing data gaps make it difficult to draw firm conclusions about the extent of PAD's benefits to European consumers, though the report offers some tentative findings. The report covers information relating to 2022 and 2023, as well as complete data for 2021 that was not available at the time of the first report. The report confirms general compliance by payment service providers with Articles 4, 5 and 6, which require the provision of standardised fee information, annual fee statements and consistent terminology in consumer communications. Most Member States also have operational comparison websites as required under Article 7, with websites updated regularly and some offering information through various communication channels and public campaigns, helping to raise consumer awareness.

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The UK Financial Conduct Authority has published its quarterly consultation paper No 49, accompanied by a new webpage, inviting key feedback on proposed amendments to its Handbook.
Key proposals include:

• Broadening the scope of the FCA's Decision Procedure and Penalties Manual on penalties policy to include the Private Intermittent Securities and Capital Exchange System (PISCES).
• Removing most statutory declarations from mutuals registration function forms to reduce the time and expense involved for mutual societies submitting applications to the FCA.

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The Wolfsberg Group has published comprehensive guidance on managing financial crime risks for financial institutions (FIs) that provide banking services to fiat-backed stablecoin issuers. While recognising the legitimate benefits of stablecoins, such as pseudonymity, rapid settlement and global reach, the Group also highlights that these same benefits introduce unique risks. The guidance therefore introduces a risk-based framework for assessing and monitoring relationships with issuers operating in regulated jurisdictions. It notes that although existing financial crime risk management principles remain applicable, existing controls may require adapting to address the specific risks posed by stablecoin issuers. The guidance introduces the relevant terminology used by the Group on stablecoins and describes the typical fiat-based services an FI may offer to a stablecoin issuer, highlighting how financial crime-related controls may require adjustment. It also explains how, under a risk-based approach, an FI may evaluate the issuer's compliance obligations on the blockchain. Ultimately, the Group's view is that the approach to banking a stablecoin issuer mirrors that of any customer relationship: firstly to identify and understand the risks associated with both the customer and the nature of the relationship, as well as evaluate how the issuer manages those risks; secondly to determine whether the issuer's risk profile and mitigation strategies align with its own risk appetite; and finally, the FI should implement a proportionate risk management framework that enables ongoing monitoring of the issuer's behaviour and supports timely corrective action when necessary.

HM Treasury (HMT) has published a consultation paper "A Streamlined Approach to Payment Systems Regulation" seeking views on its proposals on the consolidation of the UK Payment Systems Regulator's (PSR) functions within the UK Financial Conduct Authority (FCA). The move, announced in March as part of the UK government's broader Regulatory Action Plan, aims to simplify the regulatory framework to help support growth, better manage burdens on businesses and minimise overlaps between regulators' responsibilities. Under the proposal, the FCA will assume the PSR's responsibilities, including on promoting competition and innovation, and supporting consumer protection in payment systems. Transitional work is already underway, and the consultation now sets out the government's proposed policy approach.

Key things to note include:

• HMT intends to align the PSR's functions within the FCA's existing framework under the Financial Services and Markets Act 2000 (FSMA 2000), to the extent this is practicable. Where full integration is not feasible, the relevant functions are expected to be set out in a new part of FSMA 2000.

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The BIS Innovation Hub London Centre, in collaboration with the Bank of England, has announced the launch of Project Keystone, an initiative exploring how technology can enhance the analytical use of ISO 20022 data. 93% of payment system operators have either implemented or are preparing to implement ISO 20022. Project Keystone aims to support this transition by offering a standardised data analytics platform focused on ISO 20022 data. The tool comprises two modules: one for managing the complex data structure and storage needs of ISO 20022, and another for conducting data-driven analysis. Keystone is intended to be an off-the-shelf component for payment system operators to integrate into their own systems, enabling enhanced use of enriched payments data. Central banks and other regulatory bodies could leverage this to gain deeper insights into real-time economic activity, monitor system-wide liquidity and enhance participant confidence, including ensuring adherence to the ISO 20022 standard itself.

The UK Payment Systems Regulator (PSR) has published its annual report and accounts for 2024/25, summarising the PSR's progress across its key activities over the year. In March, the UK government announced that the PSR would consolidate into the UK Financial Conduct Authority (FCA) to streamline regulation and enhance efficiency. While legislation is pending, the report highlights the transitional work already underway to support a more streamlined approach. You may like to read our opinion piece "UK Payment Systems Regulator to be abolished - what's next?" which explores key considerations and potential impacts of the transition. The PSR's annual report sets out significant achievements in its work over the past year, including in fraud prevention through the reimbursement requirement for authorised push payment fraud scams, resulting in 99% of victims being reimbursed in the first three months.

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The European Banking Authority has published three single rulebook Q&As relating to Commission Delegated Regulation (EU) 2018/389 supplementing the revised Payment Services Directive 2 (Directive 2015/2366/EU), specifying regulatory technical standards on strong customer authentication (SCA) and secure communication. The Q&As cover: (i) whether payment initiation service providers can access payment status information without encountering obstacles (2024_7261); (ii) the manner in which corporate clients of account servicing payment service providers can use proxy matrices to invoke the services of third party providers (2024_7265); and (iii) whether an application programming interface key can constitute a knowledge element of SCA (2024_7286).

The Bank of England (BoE) has published its 2024/25 annual report for the Real-Time Gross Settlement (RTGS) system and CHAPS, marking the successful completion of the RTGS Renewal Programme with the launch of RT2 in April. RT2 introduces a new core ledger and settlement engine, enhancing resilience, security, and functionality, including ISO 20022 messaging and extended automation. Looking ahead, the BoE is shifting towards an "ongoing programme of change" focused on continuous improvement to further strategic deliverables. This includes the following as set out below.

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The UK Payment Systems Regulator (PSR) has published its decisions to revoke:

• From 27 August, Specific Direction 2, which requires all central infrastructure for Bacs to be competitively procured (and Specific Direction 2a which varied the requirement). This decision stems from work to deliver the National Payments Vision (NPV) and aims to provide the necessary space and certainty for work to deliver the NPV.
• From 25 August, Specific Direction 4, which requires the operator of the LINK payment system to procure any future contracts for central infrastructure services in a competitive manner (and Specific Direction 4a which varied the requirement). This decision aims to ensure that LINK and its members have the regulatory clarity they need to focus on their longer-term sustainability and the delivery of an efficient network, given that due to changes in market conditions, a competitive tender obligation may no longer be an effective way to address the competition issues.

The Bank of England (BoE) has published a new webpage on the national payments vision and the vision engagement group (VEG) of sector representatives supporting delivery of the vision. The webpage on the national payments vision contains an update on the delivery of the next generation UK retail payments infrastructure to date and next steps in 2025, focusing on key deliverables in H2.

• In September: i) The BoE will communicate further on the establishment of the Retail Payments Infrastructure Board (RPIB), and the application process for membership of RPIB; ii) The Bank, HM Treasury, FCA and PSR will engage with VEG members to discuss the Payments Vision Delivery Committee's strategy, which is due to be published later in the autumn.
• In October and November: i) The BoE will appoint members to the RPIB with a view to holding the first meeting of the RPIB in late October; ii) The BoE will also set out an approach to wider stakeholder engagement across the ecosystem for the RPIB beyond 2025, and the processes to deliver an early 2026 RPIB consultation paper; iii) The Payments Vision Delivery Committee plans to publish its strategy for retail payments infrastructure. This will inform the early 2026 RPIB consultation paper.
• In December: The Payments Vision Delivery Committee will publish the Payments Forward Plan by the end of the year.

The UK Financial Conduct Authority (FCA) has published a feedback statement on the design of the Future Entity for UK open banking (FS25/4). The feedback statement responds to the feedback received to the consultation, which was issued by the Joint Regulatory Oversight Committee (JROC). However, in line with the National Payments Vision, JROC has been wound down and the FCA is progressing the further development of open banking. In the feedback statement, the FCA states that subject to legislation the Future Entity will be the primary standard setting body for open banking Application Programming Interfaces (APIs) in the UK. It will set common standards for a minimum level of service and interoperability across open banking services, monitor API performance and compliance with standards (although it will not have enforcement powers), provide directory and certification services and assist in development standards to enable commercial schemes. It is not envisaged that the Future Entity will own or operate commercial schemes where market innovation incentives exist. The FCA expects that the Future Entity and commercial scheme operators will be regulated as interface bodies under the Data (Use and Access) Act. The FCA intends to progress the design of the Future Entity, which is intended to be established by the end of the year.

The UK Financial Conduct Authority (FCA) has published a policy statement (PS25/12) setting out changes to the safeguarding regime for payments and e-money firms. The FCA consulted on the proposals in CP24/20 in September 2024. The changes to the rules are in the Payment and Electronic Money (Safeguarding) Instrument 2025 (FCA 2025/38) which will come into force on 7 May 2026, allowing for an implementation period of nine months (an extension to the originally proposed six months). In addition, the FCA also published the proposed related amendments to its payment services and e-money approach document.

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The Bank of England (BoE) has published a consultation paper outlining Phase 1 of its extension to settlement hours for the UK's renewed Real-Time Gross Settlement system (RT2) and CHAPS. RT2 went live in April. The BoE has concluded that the existing 6am to 6pm window for settlement no longer meets industry needs, which operate on a 24x7 basis. The BoE is proposing to extend CHAPS opening hours in phases, with the goal of near 24x7 settlement for RT2 and CHAPS by the end of the decade.

The BoE's Phase 1 consultation proposes opening CHAPS for settlement from 1:30am on existing business days for urgent and non-urgent settlement of any payment available for settlement, with implementation targeted for the second half of 2027. The consultation also seeks early views on extending the CHAPS contingency window from its current hours of 6pm–8pm to 6pm–10pm, and on introducing RT2 settlement on certain bank holiday weekends. The deadline for responses on the consultation is 21 October.

The BoE plans to publish a policy statement on the 1:30am CHAPS extension in early 2026, as well as a Phase 2 consultation paper seeking views on the evening contingency extension and bank holiday settlement. A policy statement on the latter is also expected next year.

Commission Decision amending Decision 2011/C 253/04 of 29 August 2011 has been published in the Official Journal of the European Union. The amendment, adopted on 25 July, extends the mandate of the Payment Systems Market Expert Group (PSMEG) from 31 December 2025 to 31 December 2030. The PSMEG is comprised of a broad range of payment service providers and users, advising the European Commission on policy development and implementation in the payments sector. The extension reflects the continued need for expert input amid rapid innovation, technological progress and evolving market developments.