The UK payments sector is fast moving with a host of regulatory developments in progress and further changes on the horizon.
After a busy summer 2025, we’ve decided to take stock of key updates and share some thoughts below on useful content, changes and actions firms in the space should be aware of in the months ahead.
This update is prefaced by Chancellor Rachel Reeve’s Mansion House Speech, taking place in July 2025, and the Leeds Reforms package. This signaled the launch of the government’s ambitious Financial Services Growth & Competitiveness Strategy. Amongst other things, this seeks to make the UK the #1 global destination for financial service firms by 2035 – lofty ambitious indeed – there’s continued push for more streamlined 'growth-friendly' regulators, and a world-leading payments ecosystem in the years ahead. There’s further information on the Mansion House Speech, including press release, speech and papers, here.
Earlier in the summer, the Financial Conduct Authority (FCA) ran a Payment Strategy & Consumer Duty webinar to assist firms in embedding the duty into payments journeys, it’s a helpful watch for firms and supplements findings in the FCA’s payments multi-firm review from late 2024. All pairs well with the Q1 2025 Dear CEO letter, in understanding priorities and expectations which remain high on the FCA’s agenda.
Firms will remember the October 2024 'go live' well. As the first anniversary of the Payment System’s Regulator’s (PSR) APP fraud reimbursement requirement approaches, the PSR recently published an update on the impact of the APP fraud reimbursement requirement and its dashboard, covering October 2024 to March 2025 data.
Broadly speaking, it seems firms have engaged well with requirements and there’s no evidence to suggest a spike of claims, as some had feared ahead of implementation. There’s a clear expectation for continued payment service provider collaboration too.
Watch this space as an independent review of the regime is anticipated for October 2025, plus further information on PSR reform to consolidate it into the FCA.
The Leeds Reforms addressed need for FOS modernisation, with reforms focused on improving operations and providing clarity. Consultations remain open until 8 October 2025, with more detail in the HM Treasury paper and the latest FCA consultation. Key focuses include: setting clearer FCA and FOS role clarification, absolute time limits to complaints, determining revisions to fair and reasonable tests and ensuring FOS/FCA interaction in ambiguous scenarios
The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 introduce a minimum 90 day notice period, up from two months, with enhanced explanation duties for firms intending to terminate payment service framework contracts running for indefinite periods, entered on/after 28 April 2026. Firms ought to consider approach to manage this and required updates to terms and conditions and user journeys/internal processes.
The FCA's recent multi-firm review on these topics found no firms fully met expectations in managing enterprise wide risk, liquidity risk, group risk and wind-down planning expectations. A useful source, containing examples and tips covering good and bad practice, for firms determining how to meet regulator expectations.
The FCA recently published its long awaited Policy Statement, finalising plans for substantial reforms to the UK’s safeguarding regime for payments and e-money firms. This is a critical update, which will require a lot of time and attention to ensure operational processes align with new expectations. It takes effect in April 2026.
To help, we’ve prepared a useful summary of regime changes and actions in our recent article, here. Broadly, this sets out new requirements for annual safeguarding audits, monthly safeguarding returns, and enhanced requirements in relation to reconciliation, due diligence, resolution packs. Firms also need to ensure responsibility for safeguarding compliance is allocated to an appropriate senior manager or director.
There’s also ongoing developments that firms in the payments space ought to consider when managing financial crime frameworks, including:
HM Treasury published its MLR reform consultation response in July 2025, outlining targeted updates to clarify and sharpen the regulations. Highlights include clarification and greater detail on enhanced due diligence for complex transactions and involving high-risk third countries, pooled client accounts and in expanding information sharing gateways.
The UK’s latest National Risk Assessment was also published in July 2025, updates show an evolving risk landscape – payments firms face increased scrutiny, with payment and e-money institutions identified for their visibility gaps which can cause criminals to hide amongst legitimate customers; cryptoasset risk is more established as the asset class and related technologies become more accepted; AI risk remains a live concern, due to potential to facilitate fraud and money laundering at scale. Overall, an important document for firms to consider as part of ongoing financial crime framework and risk assessment maintenance.
In June 2025, Financial Action Task Force refreshed its grey list of jurisdictions subject to increased monitoring: Croatia, Mali and Tanzania were removed; whilst Bolivia and the UK Virgin Islands were added. A number of jurisdictions remain under monitoring.
Ashfords’ fintech and financial services regulatory teams regularly support different firms to navigate and effectively prepare for regulatory change. If you’d like to discuss any of the detail in this note and the impact it may have on your business, activities and compliance roadmap, please get in touch with Oliver Woodhouse or Andrew Roberts.
